After graduating from medical school, many graduates will complete their internship and residency programs by ultimately, starting or joining a practice affiliated with a healthcare service provider specializing in a specific field.
And to healthcare consumers, the traditional model is seeing a physician while paying a fee-for-service coupled with medical insurance coverage. Ultimately, the consumer’s insurance will reimburse consumers and/or make direct payments to service providers.
However, there is a local physician and entrepreneur who’s challenging this traditional delivery and cost structure model by focusing on a direct primary care strategy in Southwest Detroit.
Dr. Paul Thomas is a Family Medicine physician. A 2013 graduate from Wayne State University’s School of Medicine, Thomas completed his Family Medicine Residency at Oakwood in 2016, and now practices at Plum Health DPC, a Direct Primary Care (DPC) practice in Corktown/Southwest Detroit.
I asked Thomas for his thoughts on starting his own practice, the state of healthcare delivery and how the DPC benefits his patients.
Lee: Why did you decide to start your own practice?
Thomas: I decided to start Plum Health for several reasons. I believe that a better primary care delivery system is needed in order to elevate the health of our community, region, and nation. In short, the Fee-for-Service system that primary care doctors currently use is a one-size-fits-all approach to the unique and complicated health problems that individuals have. By practicing in a Direct Primary Care model, I am able to spend more time with my patients, deliver a higher quality of care, and have greater professional satisfaction.
Lee: What’s unique about it?
Thomas: Plum Health DPC is unique because we offer one-hour visits where we really get to know you, we offer a same-day or next-day guarantee for urgent care needs and we provide wholesale medications, at-cost labs and at-cost imaging services.
Lee: Savings to members?
Thomas: Over the last 3 months, we’ve saved our members more than $10,000 on medications and lab services alone. In addition, all of my patients have my cell phone number and they are encouraged to call, text or email me at anytime.
Lee: Why not affiliate with a major service provider?
Thomas: The existing fee-for-service model for healthcare delivery in this country is broken and we’ve all had bad experiences in this model. In Detroit, the average wait time to schedule an initial primary care visit is 16 days and once we arrive for that visit, we typically wait an hour to see the doctor for 10 minutes.
From the provider perspective, doctors typically carry a panel of 2,400 patients and have to see 1% of their panel each day. This equates to 24 daily visits or 1 visit every 20 minutes. When you add in the documentation mandates from insurance companies, half of that visit time is spent “charting” or checking boxes and manually entering data into an electronic medical record.
These time and documentation constraints really harm the doctor-patient relationship, and lead to poorer health outcomes – patients are limited to only a few questions, screening tests and medication refills are forgotten. Additionally, professional burnout in primary care is a major concern. I did not want to practice in this type of system or environment.
Lee: What is direct primary care and what are the benefits?
Thomas: Direct primary care is a paradigm shift in how we deliver healthcare to individuals. Rather than paying an insurance company to pay your doctor, you can now pay your doctor directly for the primary care services you receive, thus direct primary care.
As a DPC doctor, I want to maximize the value that I provide – that’s why I set up contracts for wholesale medications, at-cost labs, and at-cost imaging services. I don’t mark up these additional services because I want to provide you as much value as possible.
The benefits include having me, your doctor, on speed dial. You can call, text or email me anytime. Because of this greater accessibility, we can address small concerns before they become big problems. We can also spend more time working on lifestyle changes that will make you healthier in the long run.
Lee: There are significant differences in costs for services relative to hospital-based doctors. Give a couple of examples and why such a price disparity?
Thomas: Last month, we had an uninsured patient who needed an MRI of the Cervical Spine for chronic disc disease in his neck. The last time he had this test performed, he paid the insurance-based price of $2,000 for this service. This time, we used our negotiated at-cost pricing at a third-party imaging center and got the test for $368. This is a savings of $1,632 for one test.
As for medications, the most egregious price gouging is with the EpiPen, which costs $600 via Mylan Pharmaceuticals. The epinephrine medication in this device costs about $2 at wholesale, and we are able to make an Epinephrine auto-injector for about $40. Furthermore, it is recommended that you change your epinephrine every 3 months to prevent degradation of the medication. If you were to purchase an EpiPen every 3 months, it would cost you $2,400 for the year. If you were to refill the reusable auto-injector that we give you at Plum Health, your annual cost would be under $50.
When we use our insurance to pay for primary care services, we are less price-sensitive and the costs are inflated. We don’t seem to notice that an MRI was billed at $2,000 or that a medication cost $600, as long as our co-pay is under $100. When we start paying for our basic primary care services with cash, we can leverage free-market principles to get the best prices and the best quality.
Lee: Do you take uninsured patients? Make house calls?
Thomas: The direct primary care model that we use for Plum Health works really well if you are fully insured, under-insured or uninsured. In fact, about 75% of our current members have some form of insurance. They use Plum Health because it is convenient: we guarantee on-time appointments, we draw blood in our office, and dispense medications from our office. This saves folks time and money, as they don’t have to go to a separate draw center or to the pharmacy.
For the 25% of our members without insurance, we can take care of 80 – 90% of their healthcare needs for $49/month. We unequivocally recommend that people have some sort of catastrophic coverage in case of a heart attack, stroke or accident. However, we understand that folks can have extenuating financial circumstances that prevent them from buying a health insurance policy with a $300/month premium.
House calls are available on a case-by-case basis and there is an additional charge based on proximity to the office.
Lee: Essentially, this is a member-based service. What are the associated fees and services provided?
Thomas: Memberships for children are $10/month and adult memberships start at $49/month. This covers unlimited calls, texts, emails and office visits. In addition, members have access to wholesale medications, at-cost labs and at-cost imaging services. Finally, we also use an e-consult platform called Rubicon MD, which allows us to get a second opinion on difficult questions from more than 200 medical specialists and this service is free for members.
Lee: Do you expect demand to increase for member-based/fee services?
Yes, I anticipate demand for direct primary care to grow at a steady rate. The biggest barrier to this growth is public understanding because this is a new, unfamiliar concept. Once people fully understand the value of having a direct primary care doctor working for them, they will no longer stand for long wait times, poor communication, or inflated prices for their healthcare services.
Lee: In your opinion, is this future of health care?
Thomas: I don’t have a crystal ball or a magic wand, only a stethoscope and a blood pressure cuff. But, direct primary care solves so many difficult challenges that the fee-for-service system struggles to address. More time with your doctor? Check. Lower cost and higher quality? Check. Clear and consistent pricing? Check. A strengthening of the doctor-patient relationship? Check.
In a perfect world, more patients would pay for their primary care services directly, as in a DPC model for healthcare. This would allow insurance companies to offer policies that are truly insurance, i.e. policies that cover catastrophic and hospital-based care. This would drive down the cost of these insurance policies and allow Americans to choose how best to spend their money.
This is in contrast to our current system, in which people are mandated to buy an insurance policy that covers everything, from flu shots to ICU care. Because we currently buy everything through a third party system (insurance companies, Medicaid, and Medicare), the prices of even the most basic services are inflated.
Pragmatically, there is likely an 80/20 rule at play: 80% of people are fine with the current fee-for-service system and will suffer through bad service, long wait times, and inflated prices. The 20% of people who control their own healthcare spending will seek out a direct primary care delivery model and will get better service, clear and consistent pricing, and a better relationship with their primary care doctor.
Lee: Other thoughts?