Direct Care: The Membership-Based Practice
Mark Swanson, ND
Practice Building/The Expert Report
Practice Made Perfect
Direct Care is transforming private medical practices across the country. Think of it as healthcare revisited, a refresh button on the doctor-patient relationship and the way healthcare is delivered. Its advocates say that it makes healthcare simpler, more affordable and everyone a lot happier. The advantages and rewards are many, and drawbacks few. Practitioners and patients share equally in its benefits. It’s a win-win in this sense. Is this becoming the perfect practice?
So what exactly is direct care? Is it a good “fit” for NDs? Can it truly transform their own medical practices? Importantly, will patients be happier and more satisfied as part of a direct care practice? To find out, I interviewed Michael Lubin from Hint Health, an emerging leader in direct care management. He and the company also happen to be strong supporters of naturopathic and functional medicine (FM).
Welcome, Michael! What is your current position?
ML: Vice President of Sales and Business Development at Hint Health.
What changes are happening in the way healthcare is paid for in the US?
ML: One of the most fundamental shifts occurring over the past decade is the shift to high-deductible health plans. This trend is designed to shift financial risk and responsibility from insurance companies and employers to patients. The result is that patients are increasingly required to pay out of pocket for healthcare services outside of catastrophic situations.
How might the new US administration impact this trend?
ML: The new administration has stated that they want to accelerate this trend and continue to put more buying power and healthcare service purchase decision making in the hands of consumers. They intend to do this by removing the Individual Mandate that requires Americans to purchase health insurance, and by making it easier and more affordable for people to buy high-deductible health plans that are truly catastrophic-only plans that require people to directly shoulder many of their day to day healthcare costs. They intend to offset some of that increase in healthcare cost burden by expanding access to Health Savings Accounts, whereby people can use pre-tax money to pay for healthcare services. We are seeing this develop in real-time. We’ll just have to see how it turns out.
What is direct care?
ML: Direct care is a rapidly emerging medical practice model that distinguishes itself from the traditional fee-for-service model in a few key ways. The most distinguishing feature of a direct care practice is the way in which patients pay for services. Patients of direct care practices pay a recurring membership fee versus paying a fee-for-service. Most direct care practices do not accept or bill insurance and instead only accept payment directly from patients and, increasingly, employers.
How does it affect patient load and access to care?
ML: Direct care practices tend to have smaller numbers of patient ‘members’ in comparison to traditional fee-for-service practices. Direct care providers greatly expand access to their healthcare services shifting from office visits to a balance of remote care and office visits to take care of patients.
Where did direct care originate and come from?
ML: Membership-based practices became popular in the US with the rise of so-called concierge medicine about 20 years ago. Unlike concierge medicine, which tends to cater mainly to higher income patients, direct care membership fees tend to be much lower, enabling patients of all economic levels to join and access the practice. Many refer to direct care as ‘concierge for the masses’.
“Concierge for the masses.” I like that affordability description. Sounds like this may be a perfect fit for many naturopathic practices.
ML: Yes, absolutely!
What medical specialties are gravitating to the direct care model?
ML: The direct care model is predominantly found in the primary care specialties, but it is starting to emerge in several other sub-specialties including cardiology, gynecology, mental health specialties, and complementary and alternative healthcare disciplines that have historically been predominantly cash pay. The common element across these disciplines that make them a fit with the direct care model is their focus on building enduring relationships with patients, versus providing episodes of care.
(“Building enduring relationships with patients.” This is precisely how many NDs describe their practices and patients today. For me personally, this was a powerful part of my medical school training at Bastyr University, hearing the great mentors, Dr Bastyr and Dr Mitchell, share about their devoted patient relationships. It was an amazing inspiration! Knowing that the direct care model promotes this is great news.)
Why is it growing in popularity among both practitioners and patients?
ML: Direct care is proving to be a very popular and effective alternative to the traditional fee-for-service practice model for several reasons.
- It helps them fundamentally change their practice operating model to shift significantly more time and attention on patients and away from administrative burdens.
- It allows them to directly serve the needs of their patients versus the requirements of insurance companies.
- It provides greater autonomy by allowing providers to use their best judgement to meet their patient’s needs.
- It enables the development of a deeper, more trusting patient relationship.
- It gives them the time and space to solve patient problems and practice within their full scope of practice, versus referring to sub-specialties.
- It eliminates mal-incentives to provide too much or unnecessary care.
- It removes disincentives to engage their healthcare providers and participate and follow through with care plans.
- It can significantly lower total out of pocket healthcare expenditures by providing more ubiquitous access to lower-cost healthcare services providers.
- It allows the patient to develop deeper, more trusting relationship with providers.
- It makes accessing healthcare significantly more convenient.
- It delivers a much higher value return on their healthcare dollar investment.
What problems does the direct care model solve?
ML: Direct care expands access to healthcare services via a payment model that allows providers to grant access that can’t effectively be done in the fee-for-service model; it reduces patient costs by allowing patients consumer healthcare service on a near unlimited basis; and, it improves patient compliance, and thus healthcare outcomes, by eliminating and aligning incentives between patients and providers.
Can we expect the direct care model to grow?
ML: The number of providers creating or converting to the direct care model is growing rapidly as both providers and patients develop an understanding of the benefits and advantages of the model. There is also a powerful reactive trend by physicians who increasingly want to move away from the administrative costs and burdens of insurance-based payment model to the direct care model.
This is great information! It’s encouraging that the direct care model is indeed a “good fit” for the naturopathic profession and functional medicine specialties. Are you “ramping up” in these segments?
ML: We are just starting to do work on a large scale with ND and FM providers and provider organizations who are excited to introduce the direct care model to their patients and employer clients. Providers are embracing the model because they see it as a payment innovation that can improve patient compliance and outcomes. They also see it as a way to more effectively support their business model, which requires scheduling more time with each patient.
What are some challenges?
ML: Designing and instituting the direct care model with NDs and FM-oriented providers can be more complex, given larger patient costs for testing, supplements and other therapies, and patient-specific care plan design.
Are there solutions on the horizon – such as direct care businesses and leading laboratories coming together in new strategic relationships that would help lower the out-of-pocket costs of comprehensive FM testing and panels?
ML: We are always looking to the horizon, and continuously developing new partnerships and programs designed to help providers bring low-cost, high-quality care to their patients and employer clients.
Are there resources available to NDs who are interested in learning more about how the direct care model might apply to their practice?
ML: The Evolution of Medicine recently created an educational program, in partnership with Hint Health, called the Membership Practice Builder Program that is specifically designed to help FM providers, including NDs, structure and customize membership-based programs for their practice vision. Details can be found at https://goevomed.com/mpb.
Dr Swanson’s Closing Comments
Thanks, Michael, for contributing your highly valued expertise and knowledge base to this Expert Report! I’m predicting that direct care will bring a tidal wave of change to our profession and will continue to be an important ongoing topic in the news and across aligned specialties. You’ve captured its core essence here and communicated the key components, including its advantages for our practitioners and readers who may be considering adopting a direct care membership practice. For patients, especially, it was very good to hear you bring this message directly to them, as many are avid readers of the NDNR. This is an exciting time in health care management and delivery and the direct care membership practice model has emerged at the forefront.
Mark Swanson, ND, writes “The Expert Report” column, which is featured in NDNR. Dr Swanson is Chief Medical Officer at Pure Encapsulations, Inc, and for more than 20 years has been the company’s senior medical advisor. He is a former associate editor for the American Journal of Naturopathic Medicine, national product director, and consultant to the nutritional supplement industry. He is a pioneer graduate of Bastyr University, 1984. Dr Swanson maintains his private practice, specializing in functional-naturopathic medicine, in Sequim, Washington. Contact: [email protected]