Union County Direct Primary Care in a nutshell.

Union County is estimated by Milliman to have lost money. The odds that Union County saved 5.3% or more are less than one in twenty. The odds that Union County saved 28% or anything near that are miniscule.


DPC Alliance manifesto steps on its own foot attempting to prove that DPC saves money.

On May 13th, the Direct Primary Alliance published a manifesto: Building the Path to Direct Primary Care. It was signed by every officer and board member of the largest membership organization of direct primary care physicians.

In so many words, it said:

  1. FFS primary care practice is being destroyed, financially, by the Covid-19 pandemic.
  2. DPC is thriving, financially.
  3. DPC has always been great, and has always been superior to FFS.
  4. Because of the pandemic, DPC is now even greater and even more superior to FFS.
  5. DPC will be even greater than it is now and even more superior to FFS than it is now, if we get help from government, insurers, employers, patients and everyone else.
  6. DPC achieves lower overall healthcare spending.
  7. DPC Alliance will help FFS practicitioners transfer to DPC.

In a recent post, I addressed the DPC-PATH’s claims regarding how well, relative to FFS practices, DPC practices were weathering covid-induced financial stress.

Here I turn to DPC-PATH as representing DPC Aliance’s clearest statement yet of the perennial claim by DPC advocates that “Direct pay primary care models provide health care purchasers with a means to achieve lower overall healthcare spending.5 6“.

Ah, yes, the footnotes.

Here’s Footnote 5:

Basu, Sanjay, et al. “Utilization and Cost of an Employer-Sponsored Comprehensive Primary Care Delivery Model.” JAMA Network Open, vol. 3, no. 4, 2020, doi:10.1001/jamanetworkopen.2020.3803.

This was a lengthy, exhaustive study, of a large number of employees of a single employer, and it featured serious efforts at adjusting for demographic factors. The employees were offered the option of receiving primary care through traditional community PCPs or through either one on-site or fifteen near-site employer-sponsored clinics. It may well be the soundest study ever to show success in a primary care cost savings initiative. The study found savings of $167 PMPM, 45%, for those using primarily the on-site, near-site clinics delivery model.

But that delivery model was absolutely not direct primary care. Every employee visit in both the “treatment” group and the “control” group was reimbursed to the providers on a fee for service basis by the employer and/or employee cost sharing (a mix of deductibles, co-pays, and coinsurance).

In other words, what DPC Alliance’s manifesto presented as its first piece of evidence that direct primary care can save money was an article that seemingly demonstrated that of certain FFS-based primary care delivery clinics saved money.

Interestingly, the Basu article on FFS on-site, near-site clinics in DPC-PATH’s footnote 5 more or less steps on the second bit of evidence purported, by DPC Alliance in Footnote 6, to show that DPCs reduce cost. That footnote links to the claimed savings of 28% for a DPC option in the employee health plan of Union County, NC.

Surprise! DPC is offered in Union County through a proudly touted near-site clinic. So, the article presented by DPC-PATH Footnote 5 suggests that the results shown in the article presented by DPC-PATH Footnote 6 can be explained by the location of the Union County clinic rather than the payment model under which the Union County clinic operates.

More importantly, however, the Union County DPC plan is the best studied plan in the entire direct primary care universe. DPC advocates have bragged about it again and again (1k hits for “Union County” and “direct primary care”).

It is also the only DPC plan to date (May 2020) that has received extended, comprehensive, risk-adjusted analysis from an independent team of actuaries. They found that:

… [T]he introduction of a DPC option increased total nonadministrative plan costs for the employer by 1.3% after consideration of the DPC membership fee and other plan design changes for members enrolled in the DPC option.

Pleaase click here for further detail..

Apparently, not even using a near-site clinic could make DPC a money saving proposition for Union County. In fact, I show in a separate post that the DPC option likely increased Union County’s costs for covered employees, not by a mere 1.3%, but by nearly 8%.


dpcreferee’s 2017 op-ed on Union County’s failure to save with DPC proved to be almost spot on.

In February 2017, I sent the op-ed piece below to the Charlotte Observer. It was not selected for publication. But it has been proven accurate in a detailed, independent study by team of health care actuaries from a firm of highly regarded actuaries known widely for its health care work. The study was prepared for the Society of Actuaries. See discussion below my op-ed.

My Op-Ed

Union County, scene of an 1865 dust-up involving General Sherman’s troops, is now the site of a skirmish in the national civil war over health care policy. Katherine Restrepo, Director of Health Policy at North Carolina’s John Locke Foundation, has been calling attention across the South, and in Forbes, to the county’s experience with a health care delivery vehicle known as direct primary care, or DPC.

In the Union County employee health system, all enrollees have insurance to cover most types of medical services other than primary care. For the latter, they have a choice between receiving primary care from hundreds of traditional insurance-based physicians, subject to deductibles and copayments, or receiving primary care exclusively from a small closed panel of physicians at a pre-paid insurance-free direct primary care clinic with no deductibles or copayments. According to its supporters, the primary clinic’s savings in insurance overhead allows its providers more time for patient care, which in turn curbs the need for expensive specialists, emergency rooms, hospitals, and costly medications.

When Union County created a direct primary care option for its employees and their dependents in 2015, a bit under half of them elected the DPC. When compared with the traditional plan, according to Ms. Restrepo, the direct care plan saved the county as much as 28% in medical expenses, an impressive $1500 per insured per year.

With claimed savings like that, she and other small-government advocates are eager to bet the health of every state and local government employee on DPC. They seem particularly eager to promote direct primary care as the core model for Medicaid.

But there are problems.

Unless asked directly, DPC advocates withhold the fact that the enrollees in the direct primary care group are five years younger than those in the traditional care group.  

Age matters though, and it matters a lot. Age-cost curves for health care are steep. In tirades against the Affordable Care Act, many conservatives insist that the costs for 64-year-olds are five times higher than costs for 21-year-olds; that insurance premiums should reflect this 5:1 ratio; and that the 3:1 curve mandated by the Affordable Care Act penalizes the relatively young. 

As an interim step pending ACA repeal, the Trump administration recently floated the idea of moving to an age-premium curve of 3.49:1. On that curve, a five-year gap in age would explain every penny of the difference between the health costs of the two Union County populations. 

The 5:1 curve would imply that offering the direct primary care program actually cost Union County well over $600,000.

Furthermore, DPC advocates make no adjustments for prior health experience. For example, patients with multiple health issues of long standing might choose to avoid the direct primary care clinic’s small, closed panel so they can keep an established relationship with their traditional primary care physician; it makes medical sense.

There are rigorous ways of evaluating whether Union County’s costs savings reflect some innate superiority of direct primary care or merely that the relatively healthy preferred a different plan than their less healthy counterparts. Restrepo compares group costs, but fails to carefully assess whether health status differences between the groups might be driving the “savings”.

Let’s not bet the health care of county enrollees, Medicaid recipients, or anyone else on the idea that little Union County won big savings by offering direct primary care. A far safer bet is that Union County’s decision makers managed only to segment their enrollee population by health status, then proclaim an unjustifiable win for a still-unproven health care concept.

An mistaken presumption in my op-ed

The calculations in the op-ed were based on there being a five year age difference between the two groups, my best estimate at the time. Later in 2017, the County advised me that the difference was almost exactly four years. Accordingly, my estimate of net County loss under a 5:1 curve should have been closer to $400,000.

Milliman’s study conclusion

Here’s the core conclusion from the Milliman firm:

[T]he introduction of a DPC option increased total nonadministrative plan costs for the employer by 1.3% after consideration of the DPC membership fee and other plan design changes for members enrolled in the DPC option.

https://www.soa.org/globalassets/assets/files/resources/research-report/2020/direct-primary-care-eval-model.pdf at page 7.

Milliman’s total cost computation was based on estimates monthly DPC of $75 per adult and $40 per child; using those numbers, the 1.3% increase corresponds to $7 per member per month, a net loss to the County of $6,000 vs a claimed savings of about $1.3 million.

Milliman’s typo

As recorded in the quotation just above from page 7 of Milliman report, Milliman found that introduction of a DPC option increased the employer’s expenses by 1.3%. Page 7 is part of the report’s executive summary. In a discussion section at page 46, however, the same report states that the introduction of a DPC option reduced costs by an unstated amount. How can this contradiction be resolved?

The data and computations for computing over all costs are presented in Figure 12 on page 32, its key on pages 33 and 34, and a discussion on 35. These make quite clear that the average ROI estimated by Milliman was indeed a loss of 1.3%. Figure 12 is set out below.

Milliman’s one major error: its estimates of monthly fees were far too low.

Apparently Milliman’s team did not realize that, instead of estimating the month fees, they might have simply looked in the public record. The contract between the County and the provider set monthly fees at $125 per adult and $50 per child. Direct primary care cost Union County, not $7, but $41 per member per month — about $430,000 per year.

The deepest significance of the high DPC fees in Union County is not that the county lost a lot of money. Rather, it is that it took a very large investment to gain the downstream cost reductions, which were largely driven by reduced ED visits. $430,000 a year will easily fund an additional PCP to simply do phone calls and housecalls intended to intercept unnecessary ED visits, effectively attaching a glorified doc-in-the-box to the clinic. In fact, all care in the Union County DPC was provided by Board Certified Family Physicians. Without that extra money, i.e., with a $75/adult budget, it seems doubtful that a DPC clinic could accomplish ED visit reduction at even the modest standard at Union County.


That “DPC is working while FFS is failing financially because of COVID” meme takes a big hit; proof furnished by DPC Alliance.

Reality: while it is may not be a pretty picture, no one has a clear view what the pandemic’s ultimate effects on primary care practices, FFS or DPC, will be.

On May 13th, the Direct Primary Alliance published a manifesto: Building the Path to Direct Primary Care. It was signed by every officer and board member of the largest membership organization of direct primary care physicians.

In so many words, it said:

  1. FFS primary care practice is being destroyed, financially, by the Covid-19 pandemic.
  2. DPC is thriving, financially.
  3. DPC has always been great, and has always been superior to FFS.
  4. Because of the pandemic, DPC is now even greater and even more superior to FFS.
  5. DPC will be even greater than it is now and even more superior to FFS than it is now, if we get help from government, insurers, employers, patients and everyone else.
  6. DPC achieves lower overall healthcare spending.
  7. DPC Alliance will help FFS practicitioners transfer to DPC.

In this blog, I’ve dealt previously with several of these issues, but today’s special attention goes to the new information about financial viability in mid-May 2020 that came to my attention through the DPC-PATH manifesto itself.

For its key financial arguments, the manifesto relies on an end of April survey of primary care practices , including some DPC practices, by the Larry A Green Center. That center highlighted that an astonishing 32% of PCP respondents said they were likely to apply, in May, for SBA/PPP Covid-emergency money. That means a lot of PCPs expected to certify either they have suffered a significant economic harm because of the current emergency (SBA-EIDL) or that a loan is “necessary to support on-going operations”.

The Alliance also linked a breakout focused on DPC practices. 52% of PCP in direct primary care practice responding to the same survey expected to seek such loans.

I don’t think DPC Alliance should be bragging about how much better DPC is weathering a pandemic than FFS with a survey that indicates that DPC docs were 60% more likely to seek emergency assistance this month than their FFS counterparts.

When this survey result was brought to the attention of some DPC Alliance board members, some offered the small size of most DPC practices as an explanation. I was told they feared “doom” and that they applied for government help because of the economic uncertainty coupled to their fear that they would not get government help. Interesting rationale!

But I was also told that it was reckless of me to think that DPC practices who certified to a good faith belief that uncertain economic conditions make their PPP loans necessary actually believed what they certified. Yet, strange as it is for DPC advocates to suggest that some DPC practitioners had committed felonies, one advocate earned “likes” from DPC advocates when he hammered the point home by cheerfully noting that the SBA had announced that PPP loans under $2 million would not be audited.

In fact, the SBA did not announce this non-audit policy until more than two weeks after the Green Center survey. Even then, the policy was carefully explained as intended to relieve the smaller business from the financial burden of audit (not from the consequences of crime- up to $1 million and 30 years). When DPC docs say they needed PPP loans to maintain current operations, I believe the docs and not those who accuse them of committing felonies.

On the other hand, there are clear advantages that DPC practices have had over PPS in weathering, financially, the first few months of the pandemic.

Relative to FFS practices, DPCs are concentrated in states with lower infection rates; there is less shutdown, less lost wages, less social distancing, less risk to office visits, less public panic.

Also, DPC practices do not accept Medicare, and have relatively tiny numbers of elderly patients relative to FFS practices. In average FFS- PCP practice during normal times. about one-quarter of patient visitors are over 65. But it is these elderly and disabled people who, presently, have the strongest incentives to cancel office visits, to postpone routine care, and even to forgo minor sick visits or urgent care. Even in Georgia, the first state to “reopen”, the elderly remain subject to a gubernatorial stay at home order. FFS is taking a current revenue hit on patients who are barely visible in DPC practices.

That DPC providers tend to be located in less infected states and that their patient panels are nearly devoid of seniors means that DPC practices have likely caught a financial break relative to FFS. In terms of long-term policy goals and health care costs, however, DPC has found nothing in its response to the Covid crisis to brag about.

How will DPC practices compare to FFS practices six months or a year from now?

If Covid-19 survivors have a surge of primary care needs, DPC practices could be obliged to deliver more care for previously fixed revenue, but FFS practices are likely to be more able to match rising patient needs to rising revenues.

If social distancing continues to keep the number of in-office visits depressed, the perceived value of what was sold to patients as high-touch medicine will fall and subscribers may insist on lower subscription fees.

If the economy stays in the tank, patients may pay more attention to whether DPC gives good value. DPC would do well if those 85% cost reduction claims were anywhere near valid. But there is extremely little evidence to support the cost-effectiveness brags of DPC providers. Instead, there is solid actuarial evidence that can DPC increases cost.

Reality: while it may not be a pretty picture, no one has clear view what the pandemic’s ultimate effects on primary care practices, FFS or DPC, will be.


Why a policy wonk like Wyden might (and, perhaps, should) kill a DPC/HDHP fix for subscription medicine. Short version.

A 1.8 billion dollar subsidy to support subscription-model contraction of primary care patient panel sizes is a problematic policy in a country when there is a shortage of primary care physicians.

I came to this trying to figure something out. We hear that Ron Wyden kept the DPC/HDHP fix for subscription fees out of the CARES Act. DPC Coalition’ s Jay Keese flatly indicated that this was because Wyden was confused about the relationship between DPC and concierge. Because Wyden is a pretty wonky guy, and his wonkiness extends especially to health care policy, I just don’t believe that his concerns are so simple they can be addressed by explaining that “DPC is not concierge”; I’ll bet he understands the differences as well as anyone.

Differences do not always make the difference. Sometimes the similarities matter more.

It matters not how much DPC and concierge differ on some or even most possible variables, if DPC and concierge are, at the same time, similar on one or more of a set of decisive variables.

Most likely, Wyden’s biggest concern is to avoid using the tax code to support subscription fees that buy, in large part, exclusionary access to PCP services that are in short supply.

700 member patient panels at DPC clinics literally exclude the 701st and all additional patients. If there were plenty of PCPs to go around this fact would be less significant. DPC cannot be sufficiently scaled for everyone, or even most people, to have DPC in any near future. In fact, if every PCP goes to a 700 person panel today, tens of millions who had a PCP yesterday would not have a PCP tomorrow. This is precisely what subscription based small panel DPC shares with concierge practices: more attention for some comes at the price of less attention for others.

Why should taxpayers subsidize that?

One can image basing a possible answer to that question on real data to demonstrate that the cost-or-health effectiveness of DPC creates off-setting value. But, as far as I can tell, and this blog closely follows the barrage of brags by DPC advocates, there is as yet no independent, peer-reviewed study to support the proposition that DPC is cost-effective, not even for its own members. Not one.

Even if what is needed is a larger pool of PCPs, why not directly subsidize primary care practice. A tax fix for subscription fees is a roundabout way of getting that result, and compounds this issue of access inequality with issues of wealth inequality. See this in-progress, longer version of this post.

If one wishes to determine what the law should do about ________,he can approach the question in either of two ways: by definition or by analysis.

Dworkin, Roger B. (1973) “Death in Context,” Indiana Law Journal: Vol. 48 : Iss. 4 , Article 6.
Available at: https://www.repository.law.indiana.edu/ilj/vol48/iss4/6

The article by Roger Dworkin explains why it is problematic to try to solve real problems simply by invoking definitions. In this context, that means it is hard to resolve the issues by saying that “DPC is by definition not the same thing as concierge” Here, the reasons which apply to denying public financial support to concierge practices apply in the same general way, if to a lesser degree, to DPC subscription fees. To solve policy problems, decision makers need to look at broad effects, not mere word formulas.


The “DPC is uniquely able to telemed” train has left the station. Everyone is telemeding now.

October 20, 2019: 500+ word Open Letter to Members of Congress by DPC Coaltion President asking for support and co-sponsorship of the The Primary Care Enhancement Act. Missing words: telehealth, telemedicine, virtual, telephone, phone, text message, text, SMS.

March 26, 2020: DPC Coalition laments exclusion of the bill from CARES despite being sold as “means of expanding virtual care to 23 million more Americans with HDHP/HSA plans.”

Fortunately, all 23 million HDHP members dodged that bullet when a huge swatch of FFS primary care docs (along with DPC docs willing to code) stepped up to virtual care practically overnight.

Have a look at this for example:

In literally a week we have had 50 providers convert to providing a virtual care model that includes phone-visits, e-messaging, and video visits. We’ve seen the mindset shift from considering what we might use telehealth for to what we can’t use telehealth for. In just one week we have transitioned 50 percent of our clinic visits to a virtual format.


It is likely that on a single day or two last week, (3/23 to 3/27) the number of FFS PCPs who learned to telemed exceeded the total number of DPC docs present in country. By April 1, there should be many fold more telemeding FFS docs than telemeding DPC docs. [Indeed, a U.S. Senator from Georgia bet on that a month ago, buying telemedicine-related stock based insider information about the impending disaster. ]


DPC + Cat is not a good substitute for full ACA Medicaid expansion

Adapted from B. Matthews, C. Crafford, and C. Queen, Direct Pay Medical Model at Access Healthcare. Presentations of a course project at Poole College of Management, North Carolina State University, Chapel Hill, NC, August 23 & September 13, 2013.

When Brain Forrest MD, the founder of the Access Healthcare direct primary care clinic, does legislative advocacy at, for example, the United States Senate, he shows the data of the foregoing chart. It’s from a 2013 course project by three NC State post-baccalaureate management students. He advocates pro-DPC legislation, apparently telling policy makers that the NCSU students found that, over a ten year period, Forrest’s patients’ total costs of care were lower than even than the lowest of the selected industrialized countries, and had remained flat at $2200 a year through Forrest’s ten years in direct pay practice.

That $2200 figure is composed from an estimate of the annual fees for subscription members of Forrest’s DPC clinic coupled with a catastrophic coverage insurance policy priced at $1750. After passing through the hands of Forrest’s allies in the public policy arena, this soon became a proposal by the Georgia Public Policy Foundation for an alternative to Medicaid expansion, for about 400,000 low-income Georgia adults, that would provide each of them with a catastrophic coverage insurance policy and a direct primary care subscription. The Foundation prices this “patient-centered” option at between $2000 and $3000 per year, a fiscal conservative’s dream when compared to the $5370 per so-called “expansion adult” projected for 2018 by CMS’s chief actuary.

But even $3000 does not come close to providing adequate funding for the health care needs of the Medicaid expansion population. The Foundation’s model, like Forrest’s claim that his DPC patients pay the lowest amounts in the industrialized world, seemingly rests on a massive error. The calculations Forrest presented reflect a patient population that carried high-deductible catastrophic policies but paid not a penny of cost-sharing for any downstream care. It is absurd to suggest that any typical patient panel will have a similar result.

Some DPC advocates seem to believe that there is some sort of “true catastrophic coverage”, under which anything beyond primary care is a “true catastrophe” for which an insurer will pay all or nearly of the total cost. Such policies do not seem to actually exist. If they did exist, the premiums would likely be quite high, comparable to those of platinum policies on ACA exchanges. In any event, a fantasy of this sort provides a foundation for the delusion that “DPC + a cat” can meet the health care needs of indigents.

To get some idea what health care for indigents might actually cost, we can start with looking at catastrophic policies as they exist, today, in Georgia. A 42 year old (average age for expansion adults) Atlanta resident can have catastrophic coverage for $3200 per year; it comes with a deductible of $8150.

It has an actuarial value of less than 60%; so, annual cost-sharing would average at least $2133 for each covered person. Adding the cost-sharing and the premium, annual expenses for a covered person of average age and with average experience would come to $5333.

Even a $3000 version of the Foundation’s program would be insufficient to pay the premium of a catastrophic coverage policy for an indigent adult of average age. And even with a “cat” policy in hand, and primary care prepaid, an average indigent patient would still need massive financial assistance to meet an average patient share of downstream care costs.

If there were sound evidence that direct primary care can actually produce net cost savings, the care of that average expansion adult might be brought below $5333. Since there is no sound evidence that direct primary care can do that, however, Medicaid expansion at $5370 completely reasonable.

Bonus Segment 1. The cost of DPC+Cat were not flat for ten years.

It is quite unlikely that the costs for Forrest’s patients at Access Healthcare, even just those for DPC fees and catastrophic premiums, stayed constant from 2002 through 2013. Medical cost inflation, per the Bureau of Labor Statistics rose about 50% over that period. An insurance policy comparable to one that cost $1750 in 2013 should have cost only $1167 in 2002.

As to the direct primary care fees at Access Healthcare, the students found that the average member in 2013 had 3.7 clinic visits, for which he would have paid $473. Dr. Forrest himself has published rates for his own practice in 2002 that would have priced 3.7 visits at $285. Forrest’s 2013 fees were actually 65% greater than his 2002 fees; he was raising fees even faster than the general rate of medical cost inflation.

Forrest’s patients’ cost curve flexes upward, like those for every country shown.

Bonus Segment 2. The $1750 premiums in the Forrest calculation reflect the exclusion of those with pre-existing conditions.

The relationship between 2013 catastrophic policies to those in 2020 is less straightforward. Above I used a $3200 policy from 2020; had it existed, the same policy if deflated to a 2013 value (using BLS information as in the previous segment) would have cost about $2600, $900 more than the $1750 in Access Healthcare Calculation.

The difference between the policy pricing is that the 2013 figure of $1750 is pre-ACA and would have been underwritten; risky customers were broadly excluded or, if allowed, were subject to exclusions and waiting periods.

Presumably, a program of healthcare for indigents requires significant parity of access for the individuals at all risk levels. One way or another, the costs of risky indigents has to figure in. Realistic “cat” pricing in 2013 would have been $2600 for a community rated policy, or would have averaged $2600 for a series of underwritten policies covering all ages/risks level in separate pools.

Bonus Segment 3. The United States’ series line in the chart above is not representative of either Forrest’s patients or the Medicaid population.

The charted figures for total healthcare cost of various nations shown above include basic medical care for the particularly expensive aged population, as well as the cost of custodial long term care for those, old or young, who receive it. In the US, these items are paid for in systems that are essentially separate from either the target Medicaid expansion population or Forrest’s patient panel.

Bonus Upshot of Bonuses.

  1. Adjust Forrest’s patients’ cost curve upward so it no longer excludes downstream care costs born by real patients;
  2. Further adjust Forrest’s patients’ cost curve upward so that it includes the cost of catastrophic insurance for the full range of real, non-aged patients, including the risky;
  3. Adjust the curve of the United Sates downward so it reflects the non-Medicare population and excludes long-term care expenses;
  4. Give the correct upward curving form to Forrest’s patients’ cost curve; and
  5. Viola — Forrest’s patients’ cost curve will look a hell of a lot like everyone else’s.

The only bona fide university study of DPC has a message: “There’s no data.”

Health Programs Group, University of Wisconsin School of Medicine and Public Health, Population Health Institute. Direct Primary Care (DPC): Potential Impact on Cost, Quality, Health Outcomes, and Provider Workforce Capacity, A Review of Existing Experience & Questions for Evaluation, October 8, 2019. On-line publication.

The thing speaks for itself, acknowledging potential and noting absence of proof.

Also makes clear that how much my own analyses misses a hell of a lot.

Not more than a quick look at this, for example, made me realize that old comparisons of OOP for DPC primary vs FFS primary – such as the one mentioned in this previous post – were likely to be shifted significantly in more recent years even further in favor of FFS because of the ACA rule barring application of cost-sharing for a list of designated preventative services. Note, too, that the bar applies to high-deductible plans.


Spin doctor says DPC saves 85%. Don’t bet on it.

In a May 2018 “Policy Position” for the John Locke Foundation, Kathleen Restrepo wrote the following:

A study conducted by University of North Carolina and North Carolina State University researchers found that patients seeking treatment from Access Healthcare, a direct-care practice located in Apex, North Carolina, spent 85 percent less on total health care spending and enjoyed an average of 35 minutes per visit compared to eight minutes in a nondirect-care practice setting.


Can you imagine that?

Did Restrepo imagine it?

Let’s carefully address her sourcing and find out.

Restrepo misrepresented the provenance of the 85% claim.

If you thought that Restrepo’s hyperlink from the word “study” to an article in a peer-reviewed academic journal would take you to an academic report of the study by a team of academic research professionals, you were wrong. Restrepo’s statement is not your ordinary reference to a piece of peer-reviewed academic research.

Restrepo gives a fourth-hand account of unpublished material by medical students and business school students engaged in course work projects. The published article by Eskew and Klink, to which Restropo provided a rather misleading link, gives a third-hand account of the research Restrepo describes; the second-hand account of that particular research comprised less than three minutes and three powerpoint slides in a meeting presentation by Dr. Brian Forrest.

The business school students’ part of the work was never compiled into a manuscript, although the students made slides and presented them in several closed-to-the public venues (personal communication with Charles Queen, one of three business student authors named by Forrest ). Forrest’s talk also included a thirty second summary of separate work by an unstated number of unidentified medical students.

Along with the identity of the originators of any work referred to, the very fact of publication and the details of publication are, of course, important initial indicators of the credibility of cited research. Even high-school students are taught to fully and accurately represent the provenance of the material they reference. Restrepo knew that the relevant work was enitirely by students (see her earlier policy piece), but eschewed revealing that telling detail to those she sought to influence. More importantly, even though the Restrepo-cited Eskew and Klink article plainly stated that the actual research was unpublished, Restrepo disguised that unpublished research by dressing it in the garb of a peer-reviewed published article.

Restrepo did not accurately convey the content of the article she cited; and that article had not accurately conveyed the content of the source it cited.

High-school students are also taught that they must accurately represent, not just the provenance of claims on which they rely, but also the substance of the material to which they refer. Yet it seems that Restrepo’s fourth-hand account may have failed even to accurately convey what was said in Eskew and Klink’s third-hand account. Eskew and Klink (“EK”) say the study showed that DPC patients “spend 85% less out of pocket for their total cost of care compared with the same level and amount of care in a traditional setting.” Restrepo offers instead that DPC patients “spend 85% less on total health care spending”. These seem to mean quite very different things. Dr. Eskew has confirmed to me that he was referring to primary care cost sharing for insured FFS patients. But primary care costs are only a part of “total health care spending”, referred to by Restrepo.

Perhaps Procrustes could fit Eskew, Klink, and Restrepo on the same page. If so, that page should be the Forrest presentation that Eskew and Klink identified as their source. But neither Restrepo’s fourth-hand account nor Eskew and Klink’s third-hand account accurately reflects Forrest’s representation of what the research team itself had to say about comparative savings cost savings for DPC versus traditional patients.

The 33rd minute of his talk was the only point at which Dr. Forrest referred to comparative cost savings of DPC versus traditional patients as determined by NCSU business students. For this, he showed a slide by those students which made exactly one cost comparsion: that of the employee share of premium for various employer sponsored insurance policies versus the full premium of a catastrophic policy ; the students computed a differential of 33%.

The 18th minute of his talk was the only point at which Forrest referred to any specific work by UNC medical students. There was no slide, but he said this, and this alone: “In fact, some work by some UNC medical students showed that people who were commercially insured actually came out of pocket 7% cheaper for the year when they came to our practice versus ten other local practices that were in the traditional model that were in network.” I have repeatedly asked Dr. Forrest for copies of any reports made these students or that he identify them; he has not answered.

Neither a 7% difference in OOP nor a 33% difference in insurance premiums bears much resemblance to the 85% reductions in whatever it was Eskew, Klink, and/or Restrepo (EKR) had written about. No 85% figure was tied to any student research finding anywhere in Forrest’s presentation. Somehow, the entire EKR trio found themselves in contradiction to the very report that announced the existence of the studies to which they referred!

Nothing could better demonstrate why it is broadly agreed that referrers should carefully examine the material to which they refer. This is precisely why the rules of citation prioritize primary reports of research results. Indeed, even when citation of secondary reports is allowed because, for example, the original source reference was physically unavailable for inspection, these rules nonetheless require full details of the original source.

The value of sharing research by citation turns on accuracy in describing both the provenance and the content of the material cited.

The 85% claim badly needed to be masqueraded as high quality research – because it is literally incredible.

Eskew and Klink’s 2015 article in the Journal of the American Board of Family Medicine declared that unpublished work by post-baccalaureate students who studied a certain direct primary care clinic in 2013 “demonstrated” that the average fee for clinic members was 85% less than the cost-sharing paid by traditionally insured patients for the equivalent care.  The 85% claim is preposterous.

The American Academy of Family Practice and affiliated groups regularly lament that 8% or less of health care costs are spent on primary care, and hold up 12 or 13% as an aspirational model. In 2013, the overwhelming majority of traditionally insured patients were covered by employer sponsored plans. These plans had an average premium of $5884 for a single adult and an actuarial value of about 87.5%, indicating average total health care costs of about $6725. Even if we apply AAFP’s aspirational 13%, the amount spent for primary care by insurers and insureds combined would be less $875. Reducing that by 85%, would mean that the direct primary care practice in question was receiving fees of less than $132 per person per year. That’s not credible.

As the NCSU students showed, however, the average member of the subject DPC practice paid fees of $473 per year.  But, in that case, 85% savings would imply that primary care spending in traditional FFS practices was $3,153, about 47% of total health care costs. That’s AAFP’s aspiration more than tripled. That’s not credible either.

And then there is Katherine Restrepo, who gilded the 85% lily by assigning that huge reduction to total health care costs, not merely primary care costs. That would mean that the DPC patients had total health care costs of $1009 dollars.  Subtracting the $473 they pay for primary care, that leaves $536 dollars for all downstream care.  But for average FFS insured, even the aspirational 13% allocation for primary care leaves 87% for downstream care – $5851. Dividing $536 for downstream care of those DPC patients by $5851 for downstream care for FFS patients suggests that the Apex DPC’s patients saw a truly miraculous 91% reduction in downstream care costs. Nowhere near credible.

In a separate post, I explain that Restrepo’s suggestion that DPC office visits can be over four times as long as traditional office visits, is equally incredible. For now, keep in mind that Restrepo apparently expects the public to believe that DPC both has vastly lower costs and delivers hugely longer visits.

If you are a doctor choosing a pharmaceutical for your sister, feel free to rely on third-hand and fourth-hand reports of literally incredible results of unpublished pharmaceutical research by Master’s level students, some unnamed. If, instead, you are treating my sister, make sure you’ve paid your malpractice premium.

Please approach the design of healthcare systems that serve our brothers and sisters across the country with some concern for credible evidence.


Spin Doctor: DPC office visits are four times as long as PPS office visits. Don’t believe it.

“A university study found that patients treated in one Apex practice enjoyed average 35-minute office visits, more than four times longer than the average visit in a more typical practice. They also spent 85 percent less money.” 

Kathlerine Restrepo, John Locke Foundation press release of March 22, 2017

As discussed in a prior post, Ms. Restrepo is spinning more than a little bit in sourcing this information to a “university study”. In this post, however, we primarily address the substance rather than the provenance of her claim of four fold increases in patient visit times.

The work to which she refers on visit length is part of an unpublished course project by three post-baccalaureate management students from NC State: Ben Matthews, Chad Crafford, and Charles Queen. Mr. Queen has told me that only the 35-minute figure came from actual field research; the eight minute figure used for comparison came from one or more publications.

It is easy to find printed anecdotes about eight minute primary care appointments, frequently in the form of recollections from a physician explaining his migration to direct primary care. There are also diatribes about how all the time of a visit does not count when the doctor looks at a computer during some of the time during that visit. But there appears to be no published research that demonstrates that eight minutes, or anything approaching it, is the average time spent by the patient with the physician during an appointment at typical primary care practices.

Instead, there is fully documented and broadly accepted survey work from the professionals engaged by the respected Centers for Disease Control that shows that the average primary care visit around the period covered in NCSU work was 23.5 minutes. This measurement is essentially identical to that attributed in the AAFP’s Family Practice Management issue reporting on AAFP’s Family Practice Profile for 2015. That measurement would suggest that appointments at the Apex clinic are a bit under 50% longer than typical primary care visits. That’s still a feather in the Apex practice’s cap; it is also, as we will see, a fairly plausible outcome for an insurance-free practice.

What is not plausible is that any direct primary care clinic, even the one in Apex, actually delivers a four-fold increase in patient visit duration over traditional practices.

DPC advocates place their ability to deliver longer patient visits on their ability to reduce overhead. But how much overhead is there, and how much can it be reduced?

A 2014 quantitatively detailed, peer-reviewed academic study of “Billing and insurance-related administrative costs in United States health care” concluded that billing and insurance-related costs in physician practices amounted to thirteen percent (13%) of gross revenues. This works out to be about 22% of the estimated 60% overhead expenses (see here and here) for family practice physicians. 

So, while a traditional practice would divide $100 of revenue into $60 of overhead and $40 for the practitioner, eliminating all billing and insurance would increase the funds retained by the practitioner from $40 to $53. That would allow an average physician to boost appointment duration by about one-third (1/3).

That boost would bring average patient visit duration above 31 minutes, a number that might reasonably taken as confirming the 35 minute visit duration determined by the NCSU students for the no-insurance clinic in Apex.

Still, pro-DPC activists regularly assign a much higher percentage of overhead to billing and insurance costs; at least one advocate suggests that as much as two-thirds (2/3) of overhead goes to billing and insurance. Let’s look at some possibilities that I’ve developed with the aid of a spreadsheet.

Assuming that half the overhead of a practice can be eliminated, then the amount of funds left for the practitioner would increase from 40 cents to 70 cents on the dollar. Doing so would let the practitioner spend 75% more time with her patients without a loss in revenue. And, while that might be a considerable achievement, it comes nowhere close to quadrupling visit lengths.

Even were it possible to eliminate all overhead, the effort would not generate visits that were four-fold longer.  A practitioner who gets to keep 100 cents on the dollar instead of 40 cents can still only spend two and one-half times as long with her patients.

To spend four times as long with his patients, an average practitioner would have to reduce overhead by 200%. A physician would have to “keep” 160 cents on the dollar to get that result. Instead of the physician paying $32,000 per year for an assistant, the assistant pays $32,000 per year to the physician!

A physician could, one supposes, reach 160 cents on the dollar by increasing patient charges. So keep in mind that Ms. Restrepo asserts that the Apex practice manages, not only to quadruple normal visit times but, to lower patient prices by 85%.


A single-post critique of AEG/WP’s recommendation on direct primary care.

In “Healthcare Innovations in Georgia:Two Recommendations”, the report prepared by the Anderson Economic Group and Wilson Partners (AEG/WP) for the Georgia Public Policy Foundation, the authors clearly explained their computations and made clear the assumptions underlying their report. The report’s authors put a great deal or energy into demonstrating that billion dollar savings could be derived from direct primary care under certain assumptions. After what I believe was careful examination, I concluded that those assumptions were unsupportable.

Here, I summarize my opinions, linking to about twenty individual posts. The posts themselves contain numerous supporting citations and data, as well as access to spreadsheets that can be used as templates for the reader’s own calculations.

AEG/WP made two questionable assumptions about direct primary care fees. One assumption was that appropriate direct primary care would have a fixed monthly fee of $70. My analysis shows that $70 lowballs the fee considerably. A second assumption was that monthly direct primary care fee would remain flat for a decade.; I noted that these fees were likely to track medical cost inflation. I recomputed the possible savings based on using a more accurate monthy fee and the same medical cost inflation number AEG/WP used. And I left in place AEG/WP’s assumption, discussed below, that direct primary cuts 15% off downstream care costs. Correcting only AEG/WPs two assumptions about $70 fees caused the billion dollar purported savings to fall by 85%.

The most central assumption in the AEG/WP analysis is that direct primary care reduces the cost of downstream health insurance by 15%. Direct primary care needs to show significant reduction in downstream care costs to justify the fact that even $70 direct primary care monthly fees would exceed expected fee-for-service primary care payments — by about $350 per year in the individual market. While the AEG/WP’s 15% assumption corresponds to a downstream care cost savings in the vicinity of $660 per year, there is no clear evidence to show that direct primary care can even cover its own $350 annual upcharge,

I noted that AEG/WP supported its 15% assumption only by referring to undisclosed research internal to its own team. I noted that the marketplace had already demonstrated skepticism about similar claims. I noted that a DPC practice founded by one of the authors of the AEG/WP reports authors had made similar claims, without producing supporting data. I further noted that selection bias had infected the best documented argument that direct primary care reduced downstream costs.

I contacted AEG/WP and learned the 15% assumption was based on three reports, available on the internet, about different DPC clinics. I was able, therefore, to carefully examine the information available to AEG/WP. In a single post, I addressed the experience of two clinics, which together were both the two largest and the two most current examples used by AEG/WP; I concluded that these both examples failed to address selection bias adequately.

The third example, the Nextera clinic, deserved its own posts. Their report noted obvious selection bias, while revealing modest evidence that Nextera cuts cost for some of its patients. But the data set was skimpy and contaminated by results for fee for service patients. The patient data that showed downstream cost reductions for patients served by Nextera included both significant numbers who paid only Nextera’s fixed monthly fee and significant numbers who paid Nextera only on a per visit basis. This may be an adequate method for measuring the positive value of Nextera. It is hardly sufficient as a yardstick for the positive downstream value of fixed-fee direct primary care. In a separate post, I noted that Nextera’s experience showed only a $72 PMPM overall claims cost reduction, an amount that would barely exceed the $70 monthly fee.

I pointed out that even if the foregoing criticisms of the source data on which the AEG/WP relied were in error, their further assertion that the 15% assumption is a conservative one is incorrect.

I also pointed out that AEG/WP’s source material for the 15% assumption consisted only of marketing information, and I suggested that a few brags from a few DPC companies is not a sound basis for public policy decisions.

I spoke with the actuary who was on the AEG/WP team; he made clear that his role did not include validating the 15% assumption.

I noted that the AEG/WP sourced low monthly fees to a set of direct primary care providers who had sharply lower fees than the providers to whom AEG/WP sourced its claim of downstream cost reduction. I suggested that an analyst seeking to establish cost-effectiveness would be well-advised to draw both cost data and effectiveness data from the same sources.

Not a penny of the savings in the AEG/WP report can be achieved unless direct primary care will significantly reduce downstream care costs. There is no sound evidence in the sources on which the AEG/WP authors relied that direct primary care can even manage to cover its own added cost, even if direct primary care were priced at $70 and would stay at the level for a decade.

1/13/2020 Update. See this post for some cost-adjusted data that suggests that direct primary care has net positive effects. My crude analysis suggesting that DPC might have worked, at least a little, maybe once, has since been firmly contradicted by actuarial evidence.

Here’s a chronological list of posts relating to AEG/WP’s “Healthcare Innovations”.

DPC advocates: an undoubtedly small number of individuals can be as high as 23,000,000.

Summer 2019

DPC advocates argue against a $1.8 budget score for their pet DPC/HPHP/HSA fix. They argue the impact is zero, and they cite a study by The Moran Company that says:

The number of individuals presently barred from HSA participation solely by reason of DPC enrollment is undoubtedly small.

March 2020

DPC Coalition glumly reports that their DPC/HDHP/HSA fix was not included in the CARES act, even though:

We were successful in getting our [HSA fix] bill included in the original Senate Finance Committee draft of the [CARES] legislation as a means of expanding virtual care to 23 million more Americans with HDHP/HSA plans.

DPC: “Unlike FFS, we’re keeping our doors open, except when they’re not.”

Ahem, indeed!

The thrust of the vox.com article cited by Dr. Edwards is that primary care physicians are losing in-person visits and telemedicine visits return fewer dollars. It’s key sentence: “Doctors and other health care providers have seen a precipitous drop in the routine visits they depend on for revenue, and experts fear many offices will have to close.”

But the same pandemic constraints that have lead FFS docs away from in-person medicine have served to make the reality of FFS practivce and DPC practice more similar, not less.

How often do we hear DPC advocates and their fellow travelers mention that some of the rest of us confuse “insurance” with “access”? From a patient’s perspective, the current “access” problem is the result of social distancing, not payment model.

DPC docs have long relied heavily on patients perceiving exceptional value in frequent, lengthy, face to face visits. That perception paves the way for charging hefty fees on a subscription basis, month after month, visits or no visits, so that in-depth service is there more-or-less on demand. When DPC shifts its mix away from in person visits, patient perception of DPC value will surely fall.

Notwithstanding the difference in payment model, revenue of both FFS and DPC medicine will reflect a similar, pandemic-constrained mix of in-person visits and telemedicine. I can’t imagine what makes Dr. Edwards think DPC revenues will not take comparable hit, if slightly delayed, to those in traditional practice.

Consider too that the most distressed FFS practices cited in the Vox piece are small, independent practices – the smallest of which are probably close to the average size of a typical DOC clinic.

Moreover, a great many DPC patients receive their care through employer-clinic contracts. The DPC practices holding these contracts are likely to receive an immediate revenue hit as employees are laid off. See, e.g., this contract between Paladina, one of the largest DPC providers and Union County, NC, a county dependent on a % sales tax.

Similarly, DPC practices generally decline accept Medicaid. But it is estimated that between one-third and one-half of all who lose employer coverage will become enrolled in Medicaid. Many of those paying for DPC out of their own pocket will both lose the income they need to pay their DPC and will be able to join Medicaid plans with minimal out-of-pocket costs.

DPC and the pandemic: more capable than FFS? Or less?

DPC advocates are talking a lot these days about how a pandemic shows the superiority of direct primary care.

Today, I learned this.

Along with individualized medicine and the flexibility of fewer patients, however, comes one negative side effect: as Dr. Donohoe puts it, “the biggest roadblock to more people doing Direct Care pediatrics is the vaccine issue.” Children need vaccines, and, while vaccines aren’t an issue for most insurance-based pediatrics practices, many Direct Care doctors run into difficulties due to the high overhead costs that vaccines require


Then, too, some DPC clinics found themselves too thinly capitalized to provide COVID-testing for their uninsured patients even though federal legislation provided that coverage without cost-sharing even for the uninsured. At the same time, any DPC patients who had ordinary (or even high-deductible) insurance were eligible for free testing through their insurance plan and outside the DPC, even as many DPC clinics were treating appointments for COVID-testing as a billable extra not covered by the subscription charge.

I’ve commented elsewhere that much of the “we’re good for pandemics” bragging being done by DPC advocates ultimately rested on the value to DPC physicians and their lucky patients of small patient panels. I’ve noted that even in ordinary times, a shortage of primary care physicians means that greater access for some comes at the expense of lesser access for others; that resource allocation problem is a public health issue and ethical issue in its own right.

Add a pandemic and the key role of testing and vaccination to a now-aggravated resource allocation issue, and one can start to build a argument that direct primary care is in a uniquely POOR posture for a near future dominated by COVID-19.

Survivors of COVID-19 could well have a markedly unpredictable range of significant sequelae of unpredictable intensity and duration; the number of survivors is unpredicatable. Pricing the primary care needs of such survivors into a subscription model involves a very high measure of risk, while the overwhelming majority of DPC practices have low capitalization. Fee-for-service payment models are likely to prove significantly more flexible than subscription models in helping physicians meet these unknowns.

Early DPC brags about how superior to FFS it was during an emergent pandemic focused on telemedicine. But within a week or two, FFS practices largely closed that gap. At the same time, social distancing has left DPC practices no longer well-positioned to return to their longer-standing emphasis on how small panels result in lengthy in-person visits. But with FFS telemedicine moving toward a par with DPC telemedicine, FFS docs will themselves be able to increase in-person visit times.

An officer of DPC Alliance posted this brag/unbrag sequence on April 27, 2020.

More about @Dr_A_Edwards’s twitter post here.

Is there any advantage left for DPC? Well, it will remain true that squeezing out a good measure of insurance/billing overhead could result in DPC being more cost-effective than an insurance dependent counterpart. But this leads us back to this blog’s on-going attempt to assess the DPC community’s on-going claims of cost-effectiveness. And on THAT score, despite a surfeit of DPC advocate brags, there is still no independent investigation that shows that DPC delivers any value at all.

To the contrary, there is a constant flow of extravagant claims that are easily debunked. Here’s one, about two years old, that a DPC advocate, Lee Gross, MD, re-flogged as recently as yesterday. It claims potential 86% savings for a family of four over ten years by combining direct primary care with a short-term, limited benefit wrap-around plan.

To realize those savings though, all four patients would have to go for a decade without exceeding the limitations of the plan. And one can glean a sense of how likely that is simply by looking at the premium the article assumes for the plan’s wraparound coverage: $2136 per year for a family of four for all downstream care. That’s low, even for these plans, despite their being underwritten, excluding pre-existing conditions, and often having benefit caps. And these plans do not guarantee renewal, so however low a first year premium might be for a family in perfect health, the likelihood of any family seeing a full decade of clean-slate pricing is about zero. For a family of average health, 86% savings is nowhere near credible.

In fact, about two month before the article claiming 86% savings, Consumer Reports published a broad analysis of short-term plans and warned against using them on an extended basis. Moreover, that article pointed out that an average annual premium for these plans was $3,096 for a family of four – 45% higher than Gross claimed.

I suspect that for the next few years, DPC advocates will press forward with internally generated data. Independent academics or other analysts with the chops to mount careful, serious study of health care finance and cost-effectiveness will find that the pandemic has generated matters for study that are both more interesting and more pressing.

There may or may not be major reorganization in regard to delivery of health care in general and primary care in particular. If direct primary care has all along been everything that its advocates claim, it will be simply sad if DPC is excluded from that upheaval simply because DPC’s own advocates failed to marshal credible evidence.

I am no lover of insurance companies. Maybe that’s why I’ve always thought that direct primary care had significant potential for realizing its promise. Instead of developing and publishing meaningful evidence of effectiveness (particularly evidence with appropriate measures to account for selection bias), however, DPC advocates have spent years relying on brags ranging from thin, unvetted internal studies downward to complete and utter bullshit. That failure by DPC’s advocates may well cause them — and the rest of use — to miss the window for important primary care reform.

Or maybe not. DPC Alliance leaders have recently touted one of their own as some sort of data maven poised to prove how great DPC performance will has been and will be.

I guess we’ll see.

A personal favorite: a tweet by a DPC marketing director saying , “Every dollar spent on direct primary care now saves $13.”

DPC warns Congress: our patients are at financial risk; please spend $1.8B. DPC warns its patients? Nah.

Scene One. November 2019. In an open letter to Congress, the President of the Direct Primary Care Coalition explains that, under current law, payment of subscription fees to a DPC makes an individual ineligible to contribute to an HSA. Calls for passage of a legislative fix.

Scene Two. March 2020. Discussing exclusion of the DPC/HSA fix from the CARES Act of 2020 in an March 2020 webinar, the Executive Director of the Direct Primary Care Coalition advises attending DPC practitioners that they have no responsibility for advising their patients of any tax consequences that might befall them if they subscribe to DPC. Calls for DPC docs to advocate for a fix, presumably by giving their patients’ legislators the very information they do not find themselves obliged to give to their patients.

Scene Three. Flashback, months before November 2019 and, flashforward, into the present (6/2/2020). Website of a Founding Member/Board Member of the DPC Alliance:

Are DirectAccess’s monthly fees eligible for HSA or FSA reimbursement?​”

Yes, our fees are generally reimbursable. This is one smart method of paying for your health care needs with pre-tax dollars.”


In fact, that precise misrepresentation appears in an FAQ section of a website template designed for DPC clinics across multiple states. Moreover, a number of individual DPC clinics actively recommend their patients to get an HSA, like this this one for example by yet another Founding Member of DPC Alliance:

As a patient of Forest DPC, will I still need health insurance?

Yes. We recommend that our clients continue to carry a medical plan and a health savings account, thereby ensuring financial help should hospitalization or referral to a specialist be necessary.


And, while there are other DPC clinic websites that are significantly less misleading, I’ve looked at nearly a hundred of them and seen not one that directly warns patients that purchasing a DPC subscription puts their HSA at risk.

Scene Four. June 2020. DPC Alliance continues the push for the DPC/HSA legislative fix to conform tax law so that in the future it will conform to these past and present misrepresentations of the law.