Do bears sh. . .ake cherries out of trees? Selection pressure is built into DPC choices for any population with a normal deductible.

At last, it dawns on me. Selection bias is baked into virtually every DPC cake.*

Direct primary care usually comes with a significant price and a package of financial incentives revolving around primary care (and, sometimes, around some downstream care). For some, the game may be worth the candle. The incentives, typically the absence of primary care visit cost-sharing and free basic labs and generic drugs, have their best value for those who expect total claims to fall near but still short of their deductibles. These people are relatively low risk.

For those expecting to have total claims that will exceed their deductibles even if they receive the incentives, the dollar value of those incentives is sharply reduced — usually to a coinsurance percentage of the claims value of the incentive. These people have risks levels that range run from a bit below average risk to well above average risk.

The least healthy people have the highest claims. At a next level, and all the way up to the stratosphere, are insured patients expecting to hit their mOOP in an upcoming year. For a typical employer contract, however, these people are not necessarily extreme; for an employee with a $2000 deductible and a $4000 mOOP, this represents a $12,000 claims year. That’s not even a single knee replacement at the lowest cash price surgery center. For these, DPC’s financial incentives have essentially zero financial value.

Higher risk patients have significantly less incentives to elect direct primary care. DPC patient panels are enriched for low risk patients while higher risk patients tend to go elsewhere.

Financial considerations apart, the higher risk patients are also likely to be the ones least interested in replacing established relationship with particular PCPs with primary care from a narrow panel DPC practice. A second reason why DPC patient panels are enriched for low risk patients while higher risk patients tend to go elsewhere.

The upshot: Virtually any employer-option DPC clinic can trot out unadjusted claims data that shows employers having lower PMPMs for DPC patients than for FFS patients. After risk adjustment, however, not so much.

*I recently came across an employer health benefit system that included both a DPC option and cost-sharing features that apparently mitigated selection bias somewhat. But note, in that program, employees who chose to retain relationships with PCPs not affiliated with the DPC clinic paid up to $1250 per year for that privilege. Layouts of that order seem likely to correlate with either profound health impairments or advanced age. I have learned that the non-DPC population at that employer is, on average, two years older than the DPC population. On a standard age-cost curve of ~4.6 to 1, every penny of the difference between the groups can be full accounted for.

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