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:
- FFS primary care practice is being destroyed, financially, by the Covid-19 pandemic.
- DPC is thriving, financially.
- DPC has always been great, and has always been superior to FFS.
- Because of the pandemic, DPC is now even greater and even more superior to FFS.
- 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.
- DPC achieves lower overall healthcare spending.
- 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 smaller businesses from the financial burden of audit (not from the consequences of crime — fines up to $1 million and 30 years imprisonment). 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 elders 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 remained 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.