In its recent report from KPI Ninja, Nextera Healthcare bragged unpersuasively about overall costs savings and reduced utilization of downstream care services. But they also bragged about the following utilization figures for a group of 754 members for whose primary care they were paid $580,868 in DPC subscription fees over the equivalent of a ten-month [1] study period:
- 1079 office visits
- 506 of which included additional in-office procedures at no extra cost
- 573 visits with no additional procedure
- 329 telephone visits
- 1868 text message encounters
To determine whether the amount paid represented a plausible value compared to what might have been spent for the same volume of comparable services if obtained through fee for service primary care physicians, we made assumptions that strongly favored Nextera at every point. For example, although the Kaiser Family Foundation compiled studies that showed, on average, that private pay rates for physician services were 143% of Medicare rates, we set our comparison rates at 179% of Medicare, corresponding to the highest value found in any of the studies Kaiser identified.
We applied that adjustment factor to Medicare rates for the services KPI Ninja had enumerated based on the following, extremely generous, correspondences.
- we treated visits to a Nextera clinic in which no additional services were performed as equivalent to “Level 5” Medicare office visit for a group of patients, one-third of whom were new patients (coded 99205) and two-thirds of whom were established patients (coded 99215).
- Level 5 is rarely used for FFS office visits, i.e., about 5% of all visits; it assumes long probing visits, typically 40 minutes or more
- our choice resulted in treating $264 per PCP visit as the FFS cost for a routine Nextera visit
- in preparing its report based on its knowledge of payment rates used by the SVVSD, by contrast, KPI Ninja itself assigned a much lower valuation ($115) to an average PCP visit[2];
- we treated Nextera’s average telephone call as equivalent to Medicare mid-level visits with an established patient (99213)
- these are standard visit rates for problems up to moderate complexity
- 99213 is the code most commonly billed E & M code
- we treated text encounters as the equivalent of Medicare e-visits performed asynchronously via patient portals (G2012)
- these type of visits typically cover exchanges via portal for up to a week and require significant subsequent engagement in response to a patient inquiry
- many of what KPI Ninja scored as “text encounters”, as actually delivered, would likely have fallen short of G2012
- for example, KPI Ninja’s scoring rule would have counted three texts spread beyond 24 hours as two separate “text encounters”; with a spread of up to a week this would have been a single G2012
- similarly, KPI Ninja’s scoring rule counted a simple text to, e.g., request a prescription refill request as a “text encounter”; a G2012 would not have been allowed for such a minimal activity
- we treated those visits to a Nextera clinic in which additional services were performed as the equivalent of visits to an urgent care center costing an extreme $528.00, the equivalent of two level five visits
In short, we bent over backwards to try to find higher cost correspondences to cast Nextera in a good light.
With these profoundly generous assumptions in Nextera’s favor, the private-pay fee-for-service world would still have delivered these or better services – the 40 minute visits, the phone calls, the asynchronous messaging, the in-office tasks like suturing and making arm casts – at less than the amount Nextera received. Computations here.
What’s more there is no data in the KPI Ninja/Nextera report that actually demonstrates that Nextera delivered more primary care to its members than they would have had under the fee for service alternative studied in the report. Over a dozen times in an eighteen page report (falsely claiming major cost savings for Nextera plan members), KPI Ninja expressly attributes spectacular results to Nextera patients receiving a greater quantum of primary care.
But Nextera did not present any measurement of the amount of primary care received by members of the competing FFS plan. And there is good reason to think that non-Nextera patients from the control group used in the Nextera-KPI Ninja report received plenty of primary care. Instead of Nextera membership, the competing plan’s members received other benefits, including a $750 HRA providing first dollar coverage. That’s more than enough to cover the quantum of care Nextera actually delivered.
Face it. Nextera’s brand of primary care is no big deal, not really much above average. Nextera patients average 1.65 primary care office visits per year (versus a national average for all patients including the uninsured of 1.51); they get half a phone call every year, and they send or receive three annual text messages[1]. Taking $839 a year for that level of service is not exactly a big deal.[3] Claiming that this is some kind of patient access breakthrough is a new frontier in nonsense.
Nextera’s CEO is an acknowledged DPC leader and co-founder of the DPC Coalition. Nextera has 100+ physicians in eight states and a bevy of employer group contracts. Sadly, the KPI Ninja study of Nextera is direct primary care, putting its best foot forward.
So, now we know where a decade of direct primary care “data” has arrived.
[1] Although the study period covered claims from a one-year period, KPI Ninja included a large number of part-year members in the studied cohort. The figures they presented reflect a membership that averaged only 10.1 months of membership in the study year. Per annum values, when presented in this post, have been correctly adjusted.
[2] This can be calculated from their claims, at page 16, regarding Nextera member savings on primary care visit coinsurance.
[3] Taking in an amount somewhat in excess of the average value of services delivered might be thought of as necessary to facilitate a direct primary care system that, while having only modest value for a large percentage of members in relatively good health, funds the more substantial needs of members in relatively poor health. This is a valuable type of financial service that can be supported by allowances both for added administrative expenses and for a reasonable profit.
That type of arrangements is usually called “insurance” and, in all jurisdictions similar arrangments have been made subject to the will of the people as expressed in law. Under current “insurance” law, for example, administration and profit amounts are limited to 15% or 20%. But even though direct primary care providers collect and pool monthly fees and use the use the pooled fees to fund variable service levels based on differing medical needs, DPC leaders insist that their clinics are not involved in “insurance”.
That move is calculated to permit DPC clinics to capture the profits, but avoid the regulations. Yet, without regulation, expansion of direct primary care would likely unlock a primary care microcosm of all the health economics problems addressed by contemporary regulation, particularly those relating to adverse selection. pre-existing conditions, and moral hazard.
Also note that paying a fixed known price for a basket of direct primary care services does not provide fully meaningful transparency if the contents of the basket can vary depending on the purchaser’s changing health status. Every holiday season, my local rock and gem club offers a $2.00 mystery bag of rocks; the price is known but the bag is opaque. For a meaningfully transparent transaction you need to know both the price of the container and the identify and quantity to its exact contents.
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DPC Referee 