Start Up TopicsWhat is DPC Motivation to Start DPC vs. Concierge DPC vs. Capitation Pitfalls of DPC Working With Medicare: The Basics Medicare: Opting In or Out Federal And State Regulation Creating a Legal Entity & Obtaining an EIN Writing a Business Plan Finding Your Practice Location What Clinical Services to Offer Financial Considerations Setting Membership Pricing Building A Financially Viable Practice How to Find a DPC Mentor Erasing Self Doubt Selling Your DPC Vision Building Your Team DPC and Insurance DPC and the Underserved
Direct Primary Care (DPC) is a practice model in which physicians and patients work together directly, without interference from third parties. DPC enables a stronger, healthier, more beneficial doctor-patient relationship. Essentially patients pay their physician a set recurring fee in exchange for improved access, longer appointments, and price transparency.
At this time, most use the definition of DPC put forth by Eskew et al in 2015: “A DPC practice must be a primary care practice that (1) charges a periodic fee for services, (2) does not bill any third parties on a fee-for-service basis, and (3) any per-visit charges are less than the monthly equivalent of the periodic fee.” What, exactly, does that mean for patients and physicians? Let’s examine each of those items separately to get a better idea.
As of 2020, roughly 400 physicians commit suicide annually. More than 40% of primary care physicians’ time, by some estimates, is taken up with non-clinical activities. Burnout and moral injury are oft-discussed phenomena regarding the physical and emotional toll practicing medicine has taken on physicians. Put simply: current healthcare constructs fail to provide a therapeutic environment for the patient and physician and, most importantly, for the physician-patient relationship. Direct Primary Care (DPC) is one practice model that focuses on the physician-patient relationship where the incentives of both parties are aligned. The chasm between being an employed physician in a traditional health care setting and going out on your own to open your own small medical practice can seem exceptionally vast. However, many physicians are returning to solo or small group independent practice and are sharing their experiences on how to do so successfully. DPC restores physician autonomy, affords the same and next-day access, and is empowering primary care physicians to remain inspired and empowered.
Direct Primary Care (DPC) and Concierge Medicine are often confused. Both models accept payments directly from their patients, both have smaller panel sizes (allowing for improved relationships with patients), and both tend to advocate for advanced communication between the doctor and patient (via text, email, after-hours calls, virtual visits, etc.). To make matters even more confusing, some practices that follow a DPC model will advertise as “concierge” for brand recognition. So how, then, is one to know the difference?
If you look closely at the standard DPC setup and compare it to the standard Concierge set up, there are a few key differences:
Direct Primary Care patients pay a set fee per month. This can be thought of as the physician receiving a set payment per member per month (“PMPM”) -- a term often associated with capitation. Capitation gained popularity with the rise of HMOs in the 1990s as a payment model which would, theoretically, help curb healthcare costs. With capitation, insurance companies pay physicians a set amount per patient per month. The more care the patient receives, the less money remains for the physician at the end of the month. While DPC and capitation share a set amount of money per patient per month, the payer and underlying psychology set the two models widely apart.
Capitation, in its original form, is rarely seen at this point due to people exploiting the model. Since the payer was insurance, the physician had no fiscal responsibility to the patient and as such only needed to play the “game” according to the rules set by the insurance company. The rules of the game allowed maximization of income by minimization of patient interaction. Patients found themselves shut out by physicians, having an increasingly hard time making appointments or noticing the quality of the physician’s office declining significantly.
DPC fundamentally changes the rules by making the payer the patient rather than a third party. The financial risks and benefits now tie directly to patient care. Should the patient find the physician to not meet their needs, they will go elsewhere, and the physician has no guarantee that another patient will fill their spot. In addition, incentives are aligned in keeping the patient healthy and out of the office.
The capitation model lends itself to abuse. DPC gives little room, if any, for abuse, because the interests of patient and physician are aligned.
While capitation and DPC can be made to sound the same, the fundamental difference, the core of DPC, is the direct relationship, medical and financial, between the patient and physician.
Direct Primary Care (DPC) offers a seemingly perfect solution for physicians and patients; however, it is not perfect. As such, DPC comes with some unique challenges.
MEDICARE is federally run government healthcare for older Americans. MEDICAID is a state-run healthcare system for low-income individuals. Most MEDICARE patients are those over 65 years old but can also include people on disability (don’t forget about that one).
There are 3 main parts of Medicare: Part A (traditional hospital coverage), Part B (traditional out-patient coverage, Part C (private Medicare advanced plans run by private insurance companies like BCBS or Humana), and Part D (the drug benefit portion). This is confusing but the good news is opting out of Medicare means you really won’t have to worry about these issues and your Medicare patients can continue to see you and use their Medicare insurance.
This is a common question for us both from patients and physicians, “can DPC docs work with Medicare patients?” Simple answer: 100% yes.
Most DPC docs do opt-out of Medicare (internal link) and when that is done you are still in the Medicare system and retain a PECOS (Patient Enrollment Chain and Ownership System) number which allows you as a physician to order medications, imagining and referrals without any issues from Medicare. Opting out of Medicare does not change your PECOS status at all and nothing changes for your Medicare patients except they pay you directly. You do have to have Medicare patients sign a Medicare agreement with you (see example here). So, DPC works well with Medicare patients as they get more of your time and access as well as use their Medicare for larger medical expenses like insurance should be.
MEDICAID rules vary by state and the ability to contract with Medicaid patients will depend on your individual state’s laws. Check out DPC Frontier for more information on Medicaid.
Deciding how you wish to handle Medicare is a huge step for those entering DPC. There are several excellent resources on how to opt out of Medicare and the consequences of doing so.
The more important discussion here is why and when to opt out of Medicare. In order to offer full-scope DPC for all patients, you must eventually opt out of Medicare. Until you opt out you either cannot see Medicare patients, or you must bill Medicare for your services. Some small loopholes allow for billing Medicare patients for non-covered medical services, which is a tactic utilized by many concierge practices, but if you wish to consider this you must speak with an attorney to ensure you are set up correctly.
Many physicians starting out worry that they will struggle to enroll Medicare patients into their DPC, so they choose to remain opted-in during start-up. However, if your end goal is to be full-DPC, it may not be a great plan long term to do this as you will eventually have to make the transition, and it may be harder to explain the change to established patients than it would have been to enroll Medicare patients directly into DPC from the beginning.
When deciding the right time for you to opt out, one of the major decisions is whether you anticipate moonlighting. Most moonlighting opportunities require you to be opted-in. Medicare does not allow you to opt-in at one location but opt out at another. Thus if moonlighting will be important for you financially, you may choose to delay opting out. (See this Member Only article Moonlighting and Side Hustles for more information)
You should also realize that your opt-out is effective for 2 years and will automatically renew every 2 years unless you apply to be reinstated. Effectively, once you decide to opt-out you should assume you are opted-out for 2 years because opting back in within the 2 years is extremely difficult and rarely successful.
Finally, if you have been credentialed with Medicare as a private entity, you will likely only be able to opt-out once per quarter (Jan 1, April 1, July 1, and Oct 1) so you must plan accordingly. If you miss the deadline, you are stuck until the next quarter and you cannot accept payment from Medicare patients. In some areas, if you have only been credentialed as part of a larger organization, this limitation does not apply to you. And the opt-out process does have some regional variation, so speak with an attorney or DPC mentor near you to help you determine whether these deadlines are likely to apply to you, and how to opt-out in your region.
When starting your business, you’ll need to make sure to know what falls under federal versus state regulations in running your DPC practice.
Medicare and opt-out issues fall under federal regulation. The rules for opt-out or billing Medicare are the same across the country.
OSHA is federally regulated. One thing to note is that if you are a solo micro practice with no employees, you do not have to comply with any OSHA standards. OSHA
Laws vary by state. As of this writing in early 2021, 19 states have “direct billing laws,” 8 states have anti-mark up laws, and 16 states have disclosure laws. “Direct billing” means that the lab is required to directly bill the patient and may not bill the primary care physician (which would be “client billing”). Unfortunately, this often means that the patient receives an inflated bill. In states with disclosure laws, you must alert patients, either on your website or on your billing, that your wholesale costs are available to them upon request. Read more on pathology services on DPC Frontier.
The U.S. Department of Labor (DOL) is a department of the federal government that exists to ensure fair, safe, and healthy working conditions for employees by maintaining and enforcing federal laws regarding minimum hourly wage and overtime pay, protection against employee discrimination and unemployment insurance.
The federal minimum wage is $7.25 per hour effective July 24, 2009. There are also state minimum wage laws and in cases where this differs, the employee is entitled to the higher minimum wage.
Covered, nonexempt employees must receive overtime pay for hours worked over 40 per workweek at a rate not less than 1 ½ times the regular rate of pay. There is no limit on the number of hours employees over 16 years of age may work per workweek. There is no requirement to give overtime pay on weekends, holidays or regular days of rest unless overtime is worked on those days.
Under the Fair Labor Standards Act (FLSA), in order to provide a set salary, employees must meet the following criteria:
1. The employee must be paid a predetermined and fixed salary that is not subject to reduction based on variations in hours worked.
2. The amount of salary paid must meet a minimum specified amount (“salary level test”). Currently the standard salary level is $684 per week ($35,568 per year). Under the new rule from 2019, the employer may use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level.
3. The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”).
The DOL rules implementing the FLSA specifically categorize LPNs and LVNs as non-exempt, meaning they cannot be salaried and must be paid overtime. RNs may be considered exempt if they are paid at least $684 per week, and they meet the duty requirement for the learned professional exemption. Employers should also familiarize themselves with their local state laws, as they can sometimes differ from the Federal requirements.
In addition, an official poster outlining the requirements of the Fair Labor Standards Act must be displayed at the place of work.
Employers should keep in mind that the U.S. Department of Labor (DOL) can audit employers at any time, although the most common reason for an audit is a complaint from an employee. The DOL has also targeted employers in low-wage industries for wage and hour violations, particularly in the areas of agriculture, day care, food service, garment manufacturing, guard services, health care, hotels and motels, janitorial services and temporary help. By understanding the audit process and following the guidance below, employers will be better prepared for a DOL audit.
The DOL typically provides little advance notice of an audit. However, you can request time to gather records. Typically, the amount of time an employer will have will depend on the auditor.
Contact the auditor to find out specific information about the audit. Key questions to ask are the focus of the investigation (e.g., overtime pay compliance, exempt vs. nonexempt classification, minimum wage compliance), the time period for records the auditor wants to review, and the names of any employees that may be interviewed.
— Gather the records in accordance with guidance provided by the auditor.
— Be prepared to provide documentation related to the company compensation policies and procedures.
— Keep track of exactly what information was provided. Do not provide records other than what the auditor requests.
— Designate a company representative to work with the auditor. Some employers choose to designate their company’s legal counsel; other employers will designate senior managers. The representatives will have the duty to provide documents requested, arrange for any additional records to be provided to the auditor (if necessary) and coordinate employee interviews.
During the audit, be courteous to and cooperative with the auditor. It is a good practice to provide a quiet area for the auditor to work in.
At the end of the audit, ask the auditor to provide a summary of the results of the investigation. This information will help an employer review options for resolutions if any violations are found. If violations are found, employers are encouraged to consult legal counsel before any settlements are reached with the DOL.
To be proactive, employers should consider a self-audit, which consists of the following steps:
— Review job descriptions.
— Understand both federal and state law and ensure the employer is in compliance.
— Ensure that FLSA classifications are correct.
— Keep accurate payroll records.
— Apply policies consistently.
— Make sure all records are complete and work to resolve any inconsistencies.
— Determine how to address any areas of concern identified via the self-audit.
Creating a Legal Entity and Obtaining an EIN
The first official step in opening your practice is to create a legal entity. The regulations surrounding this process vary by state, and it is important to note that even if you are not set on a name, you can choose a name and then later file a “doing business as” (DBA) if you end up choosing a different name. Some opt to do this independently using Legal Zoom or directly with the Secretary of State; others opt to use a lawyer for their entity creation. In Texas, for example, a physician practicing medicine can file their business as a “professional association” (PA) or a “professional limited liability corporation” (PLLC). In other states, a simple LLC is all that is required. Check your state laws for specifics or allow your lawyer or CPA to guide you in what may be required in your state.
Your business type will affect your tax classification. Consider hiring a CPA that understands DPC -- or small business management at a minimum -- to help decide which legal structure is most beneficial for your clinic. The Small Business Administration (SBA) is another highly beneficial resource; you can browse their website or set up a (free!) business coaching session locally.
There are several IRS business structures to choose from.
You’ll want to review the differences between these at length before selecting one. Most DPC practices start as an LLC. Your business structure affects how you pay taxes, raise capital, and even your personal liability. As your business evolves, your structure may change.
After you choose a structure, you will file for a federal tax ID number (FEIN or EIN). It’s free to apply and simple to do. You will need your EIN before you can apply for a business bank account, credit card, any business licenses, permits, etc. You will also need it when you sign up for vendors such as pharmacy wholesalers and medical supply companies. Do not delay this step
There are several EMRs to choose from now, many geared specifically for DPC practices.
Below are some general questions to get you started in choosing the EMR that's the best fit for you.
Be sure to ask for a demo and also references of current users and recent users who terminated.
Is support response available within 24 hours?
Is the company open to suggestions to improve the EMR?
Is customization allowed?
Are auto-updates available, and without fees?
Is it HIPAA-compliant?
What happens when you want to switch to a different EMR, and costs?
Is it compatible on iOS/ Android / Windows / Chrome/ other platforms?
Is it viewable and fully functional on mobile devices (phones/ tablets)?
Is it cloud-based?
Is it paperless capable? i.e. forms can be filled out online
Can data be easily uploaded to a local storage source (in-house server / hard-drive)?
What is the set-up fee?
Is there a trial period?
Is there a contract term?
What is the cost per user or per patient panel? If cost is based on patient panel size, are inactive patients' charts counted in the patient panel?
Is there a cost to maintain inactive patients' chart (for the required 7 years)?
Which features are built-in and included, and which features integrated with separate vendors and are added costs?
EMRs may have extra costs for these features here, or may integrate with other companies to provide these services:
Is a separate business phone number provided?
Is there an added cost for the phone number?
Are texts/emails/calls imported or uploaded to patients' charts?
Is there a patient portal for secure messaging?
Does it integrate with your practice website for patient self-scheduling?
Can you send and receive faxes?
Can you edit faxes within the EMR?
Is there an added cost or a limit to how many pages can be faxed?
Are lab interfaces uni-directional or bi-directional?
Can your order labs for self-pay as well as insurance?
Does the EMR support mass e-mail or integrate with a mass email service (ie Mailchimp or Active Campaign)?
Which other vendors are integrated?
Does the layout of the patient chart fit your style (i.e. having everything on one page vs. having only the active screen on the page)?
Is it customizable?
How easy is it to search? Is search based on patient criteria or within patient notes?
Is there a built-in telemedicine platform?
Can you message/email/text patients from within the EMR?
Can you schedule a future message/email/text to patient?
Can you track patient results & referrals?
Are there templates, macros, short-cuts, right-click menus or hot keys?
Is free-text allowed?
Is there a lot of clicking or typing required?
Is it better for large/detailed notes or small/simple notes?
Can you import images? Can you draw on them are you import?
Can vitals and labs be graphed?
Can you set patients' preferred pharmacies, specialists, facilities, etc?
Does it support dictation?
Can you unsign/amend notes?
Can you delete documents?
Can you easily reassign documents to other patients (ie if you accidentally assign it to the wrong patient how easy is it to more)?
Are there custom workflows in notes (i.e. if ICD codes are required)?
Are pediatric growth charts integrated and appropriate?
Are medication databases updated regularly?
Is e-prescribing available?
Is e-prescribing available for controlled meds PDMP?
Is there an added cost to e-prescribing?
Can you add compounded medications?
Are supplements fully integrated like prescriptions?
Is there a medication interactions feature?
What is the appearance of the medication list?
If you're dispensing meds, is inventory management integrated?
Are alternative and complimentary treatments in the database?
Encouraging patients to use their patient portals allow patients to schedule appointments, ask for refills, and send secure messages.
Is there a patient portal and is the patient portal user-friendly?
Does the patient portal allow self-scheduling, refill requests, document retrieval & uploads, and secure messaging?
Are patients able to sign forms online (ie patient agreement, surgical consent, etc)?
Can patients upload documents and pictures?
Can patients view appointment summaries?
Can patients enter their own credit card number, pay bills, etc?
Can appointment reminders be texted?
BUSINESS FACTORS: (practice management)
Does it include a billing software? If not what billing software does it integrate with?
Does it include a membership subscription & billing manager?
Can you assign different charges for different groups of patients?
Can you adjust charges at the time of billing or when necessary?
How easy is it to add a one-time charge (like labs/medications)?
Can you create a superbill?
Can you easily print a claim form for patient to submit to insurance?
Can you easily print an invoice for patient to submit to employer?
Does it have built-in inventory management for medications and supplements?
Is there an RX label generator for dispensing?
TEAM & TASK MANAGEMENT
Can you assign tasks and reminders to different staff?
Do tasks have to be linked to a patient, or is there a way to send non-linked generic office tasks?
Can you extract population data?
Is there automatic notifications of screenings or population needs?
Can you upload any handouts you'd like?
Having a good business plan is essential not only for organizing your thoughts but also if you are trying to secure financing from other sources for start-up costs.
The elements to include:
Explain why you care about DPC and your patients, the positive impact on the community, and how your passion will drive your growth and financial estimates.
Don’t forget to reach out to your mentor(s) for advice if needed!
A saying about retail enterprises is to consider “location, location, location.” And the location is that important to your success. Where you decide to open your clinic in terms of city/town is largely up to you. There is no one recipe or one right answer. It is logical to assume that if you move to a community completely new to you and open a practice, your growth will be more challenging. Physicians who have done this have had varied experiences. It also seems logical that if you open a practice in your hometown, growth will come more naturally. This, also, is not always the case.
Lease or Buy (or Free!): For the most part, the best recommendation for an entrepreneurial start-up is to stay as financially lean as possible. What does this mean? Spend as little money as possible and commit to as few ongoing expenses as possible. If you can’t afford it now and you don’t absolutely need it, don’t buy it, lease it or sign a contract for it. The Lean Startup is a great resource on this topic.
One of the benefits of the DPC model for both patients and physicians is the simplicity of the model. Most DPC practices work with local businesses to negotiate cash prices on labs, imaging, counseling, PT, and a host of ancillary services. This improves price transparency and adds benefits to your DPC membership that patients cannot necessarily access on their own. The basic idea here is to add as much value as you reasonably can for your potential members.
Ideas for clinical services to include in your practice model are:
Start with a basic list of services and procedures you are comfortable offering, and add more over time as your time, interest and budget allow. Expanding this list is a great way to add value for your patients while growing and learning professionally.
Money is perhaps the number one consideration after your why that will ensure your DPC success. Prior to giving notice and quitting your present job, you must have a very strong grasp of your personal and professional financial situation.
There are innumerable tools to help with financial planning, and a brief online search will open a world of financial self-help for you to explore.
At the least, you should consider addressing the following:
The general saying for new small businesses is to plan for minimal to no profit for at least three years. This has not necessarily been the case for DPC startups, but in terms of managing money, if you chose to leave an employed position with a secure income and open your own practice, you need to plan for a dramatically different financial future. Stop spending; start saving now!
First and foremost, create a financial plan to help guide you. You might want to talk to a local DPC mentor about their start-up costs and expenses to get a better idea of these numbers in your area. Remember that the lower your overhead and start-up expenses, the less you have to charge and vice versa.
Once you have these numbers in mind you should consider the type of population you want to take care of in your practice.For example, if you prefer to have younger patients or small families with children, you might consider instituting an aged-based membership. This gives a lower cost to younger adults and families with children under 18, who generally feel that they are healthy and only need care on occasion.
An example would be the following:
Some prefer to set one cost for children and one cost for adults to simplify things. For example:
If you are a pediatrician, you may want to consider a higher cost for newborns and infants when you know they will need more well care and lower the cost as they get older. For example:
Some doctors will set a “family rate”. While this can be a good way to gain members and young families, proceed with caution as some very large families may be very time intensive.
Obviously, there is no one right answer with regards to how to charge and every practice is a bit different. Consider your location and population as well. You might be able to charge more if you are in an affluent neighborhood or prefer to attract this population. You might consider charging less if your town's per capita earnings are low or your practice is in a lower-income part of town.
Remember, this is YOUR practice. You can choose to set pricing however you see fit.
Steps toward financial stability include:
A question asked frequently within the DPC community is whether or not you can successfully open a direct primary care practice in your own home. It is a natural question to ask since, in many ways, the DPC model is ‘going back to the future.’ We are trying to recapture the spirit of the old-time family doctors who cared for many of us and our families in generations past. Many of these physicians had offices attached to their homes and were very successful. The question is whether or not that can be done today.
There are a small handful of DPC physicians who are practicing in a home office and are very happy doing so. There are several pros and cons, and many factors to consider before going down this road. We do our best to outline them here.
Without a doubt, the first thing to examine is how would having a practice within your own house affect your family? If you have a spouse/significant other, are they on board with this concept? Will working out of your home improve your relationship because you may be home more because you have no commute? Will it hurt it because you have a hard time walking away from work and respecting home/work boundaries? Is your spouse/partner going to work in the practice with you? Some love the idea of just going down the hall to go to work and being able to have lunch in their own kitchen or a nap in their own bed. On the other hand, some prefer clear delineation between home life and work-life to promote balance.
If you have children, how will this affect them? There is a definite advantage to working out of your home if you have young children, especially if both parents work in the practice. It would allow you to check in on the children throughout the day. If a child is home from school sick, it is easy to keep an eye on them without having to take a day off. Older patients often love to see the doctor’s children coming in and out of the office. It promotes a sense of family in your primary care practice. On the flip side, some physicians prefer not to have their children underfoot, and to maintain boundaries between patients and their private lives. If the children tend to be noisy, that can irritate you and the patients. There are also considerations in terms of whether or not you want to have your children potentially interacting with strangers in your front yard. It is also important to have you think about keeping your front yard free of loose toys, bicycles, etc. It detracts from a professional appearance and can create tripping hazards. Also, your pediatric patients might help themselves to play with your children’s toys, which may not be ideal.
The second issue to research is whether or not local town ordinances will permit you to run a medical office out of your home. In our experience, the codes often vary widely from one town to another. In many cases, home offices are allowed by the municipality if they do not take up more than a certain percentage of the house’s square footage (i.e. 20-25%). Some towns might restrict the absolute amount of square footage that is used for the office space. It is not uncommon in cities and suburbs to require that the business have a certain amount of off-street parking, which is usually based on the square footage of the business. There may also be constraints on signage in order to maintain the residential feel of the neighborhood. Some towns also have a cap on how many employees can work in your office who do not reside in the home.
If after doing this research, you find that you would not meet your town’s criteria for being considered a home office within a residential area, you might have to investigate what it would entail to have your property rezoned. Some localities recognize a residential/professional designation, which is ideal for what you would need. It means that a home can be used for either purpose at any time. If your town does not have this option, you might have to look into petitioning to have your property rezoned for business purposes. Depending on whether or not your town hall is business-friendly or not will determine how difficult this process might be. In order to test the water, you might want to speak to your local code enforcement or planning department to see what they require. Some towns will allow a single parcel to be rezoned to accommodate a business, but some would require that a whole group of them convert. The process would require a formal application, meetings with the planning committee and town council, as well as soliciting input from your neighbors regarding their concerns about the proposed zone change. It is sometimes beneficial to discuss the process with an attorney with experience in this area. If you need to go through this process, it can take several weeks or months, so please factor that into your plans.
It is important to check with your homeowner’s insurance company to see if you will need to add a rider to your current policy to allow for a home business. There is a chance that they cannot cover you at all, at which point you would need to talk with a broker about a new policy. This may be an inconvenience, but not the end of the world.
The optimal arrangement for a home office is to have a space that is completely distinct from your living area, with a separate entrance, which is clearly marked so that patients do not go to the wrong door. As a home office, there is a good chance that you will not need to be ADA compliant, but it is still a good idea, if possible, to be as handicapped accessible as possible. You might want to consider a ramp if the door is not at ground level. If your office space needs structural renovations, you may need a permit and certificate of occupancy from your town. You can expect a visit from your local fire department to be sure that you have fire extinguishers, emergency lights, and fire alarms in the areas open to the public. We will not discuss office design or space requirements here because every practice and physician is unique.
The financial advantages to a home office are many. You should talk with your accountant for formal advice because there are many different approaches and each may have its own advantages. Some examples given by one physician who practices out of his home are: it is legitimate for you as a homeowner to charge the practice rent. This will allow you to defray a portion, if not all, of the cost of your mortgage as a business expense. In order to do this, you should have a formal lease. You may be able to pay some of your utility bills as a business expense. You may also be able to declare a portion of your home improvements, landscaping, and other expenses and supplies necessary to maintain a professional appearance to your building. (Please consult your accountant for formal guidance.)
Frequently, the question is asked about practicing medicine out of your home is about patient boundaries. This generally is not as big an issue as one might suspect. The key to success is to clearly establish boundaries early on. If the office entrance is clearly marked, it is not likely that patients will be knocking on your front door. Patients tend to be extremely respectful of your private time. Occasionally, patients may broach the subject about dropping by to see you after hours but frame it as a joke to feel you out. It may just be a joke, but it is usually best to make it clear, in a friendly way, what your boundaries and expectations of privacy are. It may sometimes be a challenge to enjoy a day off during the week and be in your front yard and have a patient stop by unexpectedly to ask a question, pick up a refill, etc. In most cases, simply letting a patient know that you are enjoying private time and that it would be better if they call before coming over is perfectly fine. The same applies to pharmaceutical representatives. Realistically, the best way to avoid interactions such as this is to not be visible during personal time taken off during your usual business hours. Stay in the back yard, in the house, or away from home.
In summary, there are many things to consider and research before opening your medical practice in a home office. It is a unique situation with many advantages and a few caveats. It may not be a good fit for everyone, but for the right physician and their family, it can be a fantastic arrangement.
One of the greatest benefits of the DPC movement is the collaboration among DPC physicians. Most independent physicians want to help other physicians be successful. Mentorship and the culture of “rising tides raise all ships” has been fundamental to medical education throughout the history of medicine. A good mentor is someone who is enthusiastically willing to share their knowledge and expertise, provides guidance and constructive feedback, and is successful in their own DPC practice.
Resources for Finding a Mentor
Below are two websites which have DPC mappers. Search for DPC clinics in your state and close to you.
Join online DPC social media groups. Use the search option to find posts about the questions that you have. Post your own questions. Use the files tab to access free resources posted by other physicians. Pay it forward by adding your resources as you build them.
You may find a story from an established DPC physician that resonates with you - for example, a transition practice, a part-time practice, specific practice niches. Do you want to build a practice with mainly uninsured? Mainly employees? Mainly pediatrics? All geriatrics? Do you want a micro practice, without employees? A large practice with multiple sites? Lots of procedures? Find doctors who have built a practice like what you want to do, and reach out to them. Email them and ask to set up a phone call/coffee/lunch date to hear more about their practice.
The greatest value of an in-person conference is meeting like-minded physicians and developing relationships that will sustain you in a path less traveled. Virtual conferences are also helpful but it is more difficult to make those connections virtually. Consider signing up for at least one in-person DPC education event.
Do I have what it takes to start a DPC practice?
Entrepreneurs have a vision and are willing to take risks and prepared to work hard. They prefer autonomy over stability. Direct primary care physicians have a persistent passion for patient care. Do you have both? Are you ‘wired’ to be employed? Are you ‘wired’ for autonomy? If a DPC-oriented business offered you a job tomorrow, would that make more sense to you?
Do I still love medicine?
Stop now and answer this question:
Is it time for you to quit medicine altogether or do you still love the work of being a physician but can no longer tolerate your job?
DPC is not the easy path - you will still work hard. It is different in that you are working for yourself and your patient and building something for your future. This inherently restores the autonomy and joy of being a physician, and leads to immense self-growth, and developing new non-clinical skills.
I went to medical school, not business school - how do I start my own business?
Most business owners have not gone to business school either - many may not have gone to college. Running a small business is hard work but not very complicated. If you can become a physician, you can run a business. Check out small business resources from U.S. Small Business Administration.
What do I want my DPC practice to look like?
When deciding what kind of practice to start it is helpful to consider:
In deciding to transition to DPC, it is necessary to have a clear vision for what you want to create and why you want to create it.
Nothing sells better than integrity.
PRACTICE YOUR SELLING PITCH
Selling often seems unfamiliar and uncomfortable for physicians. However, every physician-patient interaction is an exercise in trust and is a type of “selling.” Be authentic, not apologetic.
BECOME COMFORTABLE WITH MONEY - KNOW YOUR WORTH
Any venture worth doing is worth doing with someone else. As you are building your business vision and laying out a plan for your start-up, ask yourself: who is your business team?
When considering DPC, physicians with a domestic partner should involve their partner in the decision to switch. Working together to realize your dreams can bring you closer or apart, depending on how invested your partner is in your DPC dream. Whether you have a partner who can hold down the fort at home, provide income and health insurance, offer design/graphic device, help with keeping the books, do the billing, run your office or just enjoy dinners while you ramble on about all of your ideas and needs, a supportive partner is a critical component to business success.
LOCAL INDEPENDENT PHYSICIANS
Seek out like-minded entrepreneurial independent physicians of all specialties. Most are intrigued by the Direct Primary Care model and are eager to work with our cash-paying patients as less billing means less overhead. You may develop a local network of supportive specialists, not only with patient care but also with physician entrepreneurship, which can sustain you through difficult or lonely times.
LOCAL BUSINESS NETWORKING GROUPS
There are business networking groups that can be very helpful in introducing you and your business to your local business community. Be prepared to join as a member and go to meetings and events to network with other small business owners. Be aware that networking takes TIME and many conversations but eventually as you and your DPC model become well known and trusted, you will begin to get referrals.
Other members of your team worth considering include:
LOCAL AND NATIONAL DPC PHYSICIANS
Call or email your local established DPC physicians. Most will be happy to hear from you and help you along the way. Some are less interested in being part of a wider DPC community - don’t take it personally! The national DPC community is full of physicians willing to help you get off the ground. Check out the DPC Alliance member directory, send an email, and ask for help. See How to Find Your DPC Mentor for suggestions.
Although Direct Primary Care physicians do not accept or bill insurance, patients can still opt to use insurance for ancillary services. Most insurance products will still recognize and accept an order from out-of-network physicians (ie DPC physicians). Exceptions include:
This means that if a patient chooses to, they can utilize their insurance for:
Many insurances require per-certification or prior authorization for certain imaging or medications. Suggestion: when ordering what may be an expensive test/medication, give the patient an order/prescription and ask them to check with their insurance if/how this will be covered. You may need to give billing or CPT codes for some insurances (which drags you back to your system days once in a while and makes you appreciate the daily simplicity of your DPC life!).
HIGH DEDUCTIBLE PLANS:
It is often less expensive for the patient to pay cash for the test if they have a high deductible, which saves them money, and your time. It is worth having this discussion with your patient:
“I’d like to order an MRI of your knee. What is your insurance plan and what is your deductible? How much of your deductible have you met this year?”
Usual answer: “I don’t know my deductible, and I don’t know how much I have met”.
Empower the patient - give them some homework and a cost-saving carrot to entice them to do it.
“Well, I don’t anticipate this is going to need an expensive surgery and you are generally healthy. MRI of the knee would cost you around $400 at this location. If you go through your insurance with a high deductible that you have not met, it may cost around $3000-4000. It is your choice which way you would like to proceed.”
End result: Patient learns more about how their insurance works, they have been part of the cost-saving solution and feel empowered by that, and you have written an MRI order for a cash pay location without time wasted on precertification. WIN WIN WIN.
You may consider the same tactic with medication dispensing.
“Your medication costs $10/months through our pharmacy and $13/month paying cash with GoodRx. Why don’t we send the first month to the pharmacy, let them run your insurance and see which option is most cost-effective.”
The more your patients understand about the cost savings and the different options that they have, the more that they become invested in the Direct Primary Care model and are likely to spread the word, marketing for you.
This one gets tricky. You must be upfront with an HMO patient. You cannot write referrals for them and they need to have an In-network PCP to do that. Some DPC physicians develop relationships with local HMO network physicians who are happy to see their patients for referrals and take a backseat while collecting the monthly capitation (with less work). Others are not. Here are some options if you decide to take HMO patients.
Although Medicaid can be an exception, this is state-dependent. In some states, it is illegal for Medicaid patients to pay cash to see a doctor. In other states, Medicaid has an “ordering and referring provider” status that the physician can apply for which would enable Medicaid to honor their medication and imaging orders. As this is state-specific, the best advice would be the check with physicians practicing in your state or check dpcfrontier.com for state-by-state regulations.
See State and Federal Regulations here.
It is illegal to be a medicare provider and charge cash for services that Medicare covers (Medicare fraud). Please see Working with Medicare - The Basics, and Medicare: Opting In or Out for more details.
As a cost-reducing model, DPC intuitively helps those who have a hard time affording care in the current model; yet to many who are involved in healthcare policy, the idea of paying the physician directly sounds like an added cost to patients and detrimental to a group often collectively called “the poor”. Within this group, there are a few subgroups to identify to help show how DPC can be beneficial to "the poor."
HEAVY UTILIZERS - Patients requiring frequent visits
WORKING CLASS - patients that cannot afford insurance and do not qualify for government subsidies or safety net insurance.
GOVERNMENT INSURANCE - Medicare, Tricare, and Medicaid eligible patients