Start Up Topics What 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 UnderservedUnderstanding DPCWhat is Direct Primary Care (DPC)?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.
DPC vs. ConciergeDirect 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:
DPC vs. CapitationDirect 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.
Potential Pitfalls of Direct Primary CareDirect 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.
Legal ConsiderationsWorking with Medicare: The BasicsMEDICARE 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.
Medicare: Opting In or OutDeciding 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.
Federal and State RegulationWhen starting your business, you’ll need to make sure to know what falls under federal versus state regulations in running your DPC practice. FEDERAL CONSIDERATIONS 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 STATE REGULATIONS
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.
Department of Labor Rules and AuditsThe 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:
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.
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:
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
Motivation to StartAs 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.
How to pick a DPC Practice NameChoosing a name for your new DPC clinic may seem trivial but it can be nerve racking for many. Obviously, you want something that sounds catchy and really shares your DPC passion but also is unique. Easy right? Here are some starter tips to get you thinking. First, start brainstorming with your friends and family. Think about why you’re doing DPC? What is your passion? And just so you know, “Screw The System” is not a good name for your clinic. What about your own personal name, is there something there you can use? Like Gold Direct Care or NeuCare. Think about your community or location, is there something there you can use? Like Hometown Direct Care or Bluegrass Wellness. Write ideas down. Say them out loud. Do they sound good out loud? Be careful about initials, Applewood South Sound Clinic would not be good (let me know when you get that). This example also shows that a name can get too long. Consider searching the DPC Alliance directory for names to get some ideas. And if you are really loaded with cash or crunched for time there are crowdsourcing sites like squadhelp.com that you can pay to help you come up with a cool name. Ok, you got a name. You think it’s the total bad mama jama. A huge weight has been lifted off your shoulders, and then you go to search for the name among the thousands of clinics, or purchase the name for a trademark or website, etc, and ARRRRRGGGG. It’s taken. So, that is why I say make a list because the next step is to take the list of all the names you came up with and search out your new name on the ole interwebs. Is your name taken already? Just do a Google search. What pops up? Does your search bring up a list of hate groups in Montana? Well, not good. Does your name mean “loser” in French? Again, not good. Check other search engines too. Next, search your name on the GoDaddy site or another domain purchase site. Can you buy your domain? Just because you don’t see you name come up on a Google search doesn’t me you can buy it. Some names especially some with the words health or care or wellness in them will be premium domains. Is the domain name available and reasonably priced? No debate here on .com or .net or .health domains. Pick one you like and can afford knowing that .com are just way more common. Now check on social media sites like Facebook, twitter, Instagram or LinkedIn? Can you use your name there? You’ll need those later for marketing, though your exact name is not as critical for those. Finally, you should check your Secretary of State’s website for companies in your state with the same or similar name? If you want to have an LLC or similar in your state you need the name to be available. Also, if you have any ambitions to grow you DPC business into an empire maybe you should consider doing a trademark search. It takes a unique name to be trademarked. Along this line, if you may expand locations or add additional services like aesthetics or counseling would your name still fit? You should think bigger than you are right now. Your office name is important but it shouldn’t plague you with regret. We hope these simple tips will help guide you to a great clinic name. Be sure to share you name ideas with your Alliance colleagues and get their reviews too. Now, get busy.
Writing a Business PlanHaving 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!
Practice LocationA 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.
What Clinical Services to OfferOne 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.
Financial ConsiderationsMoney 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!
Setting Membership PricingFirst 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:
Conversely, if you prefer to have older patients in your practice or perhaps you do not see children, you may want to institute a single cost per member, which may be higher than what a younger person would want to pay but lower for the older patients.
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.
Building a Financially Viable PracticeSteps toward financial stability include:
Vancenomics 101: Finding Steals and Making DealsHow to Save Money Starting Your Direct Primary Care ClinicPart One: Introduction and Basic Principles If you have a wealthy benefactor, a trust fund, or otherwise have money to spend at your leisure, enjoy the ease of your DPC startup, and please feel free to skip this section, and know that the rest of us are jealous, and we expect you to buy our dinner and drinks at the next DPC conference. We doctors generally have decades of scientific education, but little to no education about business or money. I had ZERO business knowledge, but I knew I had to do DPC so I jumped in, and I learned as I went. The good news is that most of this stuff turns out to be straightforward and common sense. The first thing to know is that you’re going to have to keep your overhead down if you ever want to make money again. Learn it. Know it. Live it. Keep that overhead down. The profound waste that is a problem inside the system will destroy your DPC. One good way to keep your overhead down is to avoid interest payments. That means starting up without a loan if you can. This is possible, but rarely so without major sacrifice. But, starting a clinic doesn’t have to cost a fortune, so look at your situation and see if you can make a no-loan startup a reality. Zoom out as far as you can and make some overarching assessments of your financial situation, and your goals. Then, make yourself a few guiding principles and boundaries, follow them as much as possible, and the solution should p assessments, principles, and solution (yours will be different, of course). resent itself. I’ll demonstrate this by using my own goal,
So that’s how I started a clinic without a loan. But I had equity I could liquidate. The alternative (taking out a loan) is often chosen, sometimes by necessity. This requires income to pay interest on your loan. Assuming you don’t ramp up your clinic overnight, you’re going to find yourself moonlighting all the time to pay for all this, and if your business fails, you’re hosed. I’m not saying there’s anything wrong with this approach, but one of the things that is attractive about DPC is that you no longer work 7 days a week away from your family. If you’re running your new business M-F and moonlighting at nights and on weekends to pay for it while it ramps up, you’re not much better off than you were before. That being said, such pain is temporary, and doing this requires a sacrifice in every case. If that is the sacrifice you must make, then make it. The rough schedule will motivate you to strive all the more to be successful and gain independence in DPC so you can quit the side hustles. There are numerous ways to make money on the side while your DPC clinic ramps up, but that is not the focus of this article. If you’ve got no choice but to go into debt to start your clinic, you’re still much better off starting the clinic on a very strict budget. It is not difficult to spend hundreds of thousands starting a clinic, and then remain a slave to the bank for years and years to pay it off. Get a line of credit, and use only what you have to, because the smaller the loan, the smaller the payments and the more quickly you’ll be able to pay it off and become a profitable business. Including paying my nurse a full salary for ~6 weeks before we opened, I was able to start my clinic for under $30,000, and I’ve heard of others doing it for even less. I made all that back in a few months and was in the black in no time, with no loan and no moonlighting. Don’t forget to live on a tight budget. Income is thin for a while while you ramp up. If you don’t want to burn yourself down working multiple side-jobs, it helps to get yourself out of debt ASAP. Sell fancy cars, buy a used car. If you are paying off a mortgage on a big house, sell it and downsize to something you can pay cash for with the money. Clip coupons and don’t shop at Whole Foods. Then you can live in low-stress peace with your weekends off, with 100% of your time available to give to your own business as you build it and ramp up. When you’ve got a successful DPC clinic and have become financially comfortable in a few years, knock yourself out. Delay gratification. Part 2: Medical Inflation (fake prices in medicine) In medicine, the cost of everything has become hyperinflated. Stupidly hyperinflated. Fake prices going out and fake prices coming in. Maybe this will get better as a result of our efforts in free-market medicine, but until it does, we have to deal with it. The problem we have in DPC is that the over-pricing in medicine has trickled down to the suppliers and wholesalers, too. If they sell an office chair to a business office, the cost is, say $100. But if it’s medical supply, they take the same chair, label it a nurse’s chair, and list it for $350. But can you blame them? If a clinic is charging patients $125 for a $3 CBC, the “medical furniture” place can justifiably gouge the clinic for an office chair. But if you’re in DPC and you sell that CBC for $3, you need to avoid being gouged, so you won’t be forced to pass these costs on to your patients. Part 3 addresses ways to fight medical inflation and fake prices. Part 3: Cost-Savings Pearls 1) Get as much free stuff as you can. Free > Cheap. Of course I’m going to be talking about getting cheap and/or used stuff, but why stop there? Why not go for free stuff? Example: I found a non-profit hospital, and approached the guy in charge of their materials management department. I asked him about surplus stuff--anything they might have--and asked if he would be interested in selling it at low prices to a clinic that was going to be caring for lots of uninsured people, etc. He said that as a non-profit, he couldn’t sell it, but that much of their surplus inventory was going to be thrown away and I could have almost anything I wanted, for free. I got a like-new electric exam table, a power procedure table, an autoclave, numerous cabinets, office chairs, waiting room chairs, paper towel dispensers, glove box holders, a scale, a lab-drawing chair, wall-mounted otoscope/ophthalmoscopes, countertops, curtain track, halogen exam lights, physician’s exam stools and so much more. Buying that stuff new would have cost me thousands and that relationship continues to pay dividends even after 6 years. I send him a huge platter of cookies at Christmas. Who cares if the stuff is used? Clean it up, slap a coat of paint on it where necessary, and admire your not-empty bank account! Later when you’re flush with cash, if some of the used stuff is looking tacky, you’re in a better position to replace it with something nicer (don’t buy new even then–see section 3 below). This brings to mind another thing: Make your needs known. Talk to your patients, and tell them you’re looking for a ceiling-mounted surgery light. Tell them you’re trying to find another doctor to join your practice. Tell them you wish you were better at painting when they comment on all the paint on your hands. People respect the heck out of you and what you’re doing for the community and want to be a part of it. They will donate time, stuff, money, and labor to you out of the goodness of their heart. When I was painting my new clinic (3,100 square feet–massive job!), one of my patients and his brother showed up with loads of painting equipment, and painted alongside me for 2 days in a row, just to be nice. A homeschooling family of 12 showed up with their 10 kids and did all my landscaping, as a community service project. A patient of mine who knew I was looking for help told a very strong and experienced electrophysiology nurse practitioner that she had encountered in a neighboring city about our model, and that I was looking for help. She gave him my number, and within a week we’d met and shook hands. He became my partner a year later when the new clinic opened, and we are like brothers now. Talk to people. 2) Get free advice and whenever possible, Figure it out. Don’t forget more than just stuff can be free. Advice can also be free. There are plenty of opportunists who will try to get you to buy services or advice from them, or attend for-profit seminars or boot camps, and they’ll do everything they can to convince you that without their magic small business, marketing, social media, or even DPC knowledge, you’re going to fail. They’ll tell you they can help you build your practice, teach you how to start a business, do your marketing, design your website for you, etc. They’ll even promise you a certain rate of growth, as if they have any control of that! This is all bogus. These services or advice are available elsewhere for free. Just because you’ve never designed a website, marketed a business, set up an internet domain, done the financial books on a business, or whatever it may be doesn’t mean you need to pay some schmuck thousands to do it for you. Figure out how to do it and do it yourself. There are scores of DPC docs out there in numerous online forums, the DPC Alliance, and others, who have gone before you who would gladly give you free advice. Don’t fall for the scams. They’re everywhere--people who want to cash in on your fear and uncertainty, and they’ll grab your energetic leap of faith and suck it dry. 3) Get used stuff, cheap. This is huge. Don’t buy anything new unless you have no other option. Don’t buy surgical instruments from surgical supply stores, because they gouge you hard. Instead, hit up eBay and Craigslist. I used to use hemoclips in my vasectomies, and the clip appliers from supply places were like $150-200 as I recall. I got a like-new brand-name clip applier on eBay for $10. I got a pristine ConMed Hyfrecator for $350 on eBay, which currently sells for something like $1,000 new. Another option is to find clinics/hospitals that are closing, and contact them about buying used stuff. It’s all surplus to them, and hard to sell much of it, so you can cash in. Call your state medical society and ask about clinics that are closing. Keep your eyes out for auctions and go to as many as you can. I’m not just talking about medical auctions. You can find furniture, cabinets, wire storage shelving, wall art, and much much more. I went to an auction at a hotel that had gone out of business. There, I nabbed a big stainless steel wire storage rack, probably worth at least $250 new, for ONE DOLLAR. At the same auction I got a big UPS worth hundreds (to keep computers on in case of power failure) for FIFTY CENTS, a new mini-fridge for $20 that I keep insulin in, and a break room microwave for $3. I went to an auction of a restaurant that was closing and filled the back of my truck with high-quality toilet paper for $20. I went to a Habitat For Humanity Re-Store (this is like Goodwill but for hardware and building supplies) and found 12 gallons of hand sanitizer gel for maybe $15 (worth $360 today on Amazon). You never know what you’ll find, and you might leave empty-handed, but you can save SO much money if you just look around. 4) Get your hands dirty. Manual labor is the most expensive thing you’ll buy if you’re building or renovating anything. In my first small clinic location, the materials for the somewhat extensive renovation were approximately $4,000. My Dad and I spent over 720 hours (combined) over about 6 weeks doing all the work ourselves. At the time, that labor would have cost me well over $15,000, and it might have been shoddy work. Lack of experience is a lousy excuse for not doing this. If you can learn to perform surgery on a human being, you can learn to lay bathroom tile, install a sink, or refinish window trim. Watch a YouTube video and learn how to do the work. It’s not hard, and if you’re willing to invest sweat equity, the dividends will be massive. 5) Renting? Negotiate to get paid for your labor! On top of your labor savings, if you’re renting, you can negotiate the value of your labor against the value of your upcoming rent, since you’re fixing up the owner’s building. In the case of my initial clinic location, the building owner felt that he would be able to rent it for way more after I leave in a couple years (after I completed my dedicated clinic–which I mostly built myself too) because it’s way nicer than it used to be, and that’s worth something to him. We crunched numbers and figured that the value of my labor offsets my rent and utilities for 2 years. So I spent 6 weeks busting my butt fixing up the place, and then I didn't pay a penny of rent or utilities for 2 years. If you’re absolutely unwilling to do manual labor, then barter for it. Find a builder who is getting robbed on his health care, and trade him a year or two of care in exchange for renovating your clinic. And since you’re the one paying him (in medical services) for the work, you can then barter with the landlord for a couple years of rent in exchange for increasing the value and rentability of his or her facility. (See illustration below.) With that smart deal, you get free rent AND free renovation labor. More on bartering coming up. 6) Make your labor a valuable (and free) advertisement. Another neat thing about doing the work myself, is it gave me a huge selling point on social media, where I did all my own (free) advertising. Occasionally I’d post pictures of myself covered in paint or sheetrock mud, patching up walls or a time lapse video I made of me laying flooring. The tagline on every post went something like “If I don’t have to pay somebody to install this floor, neither do my patients. Welcome to Direct Primary Care.” The patients get that. You’re saving them money. That’s effective marketing, it’s true, and it’s free. Plus, patients like having a doctor who’s a real live human being, and your humility, work ethic, and idealism (you’re doing this to save them money) is a valuable selling point. 7) Bartering. This one is a little bit tricky, but has its place. When you trade for goods and services, both parties need to feel like they’re getting a good deal. This never works otherwise. Value is in the eye of the beholder. If you can’t both agree that your deal makes sense to you both, switch back to using money. Josh Umbehr once told me “Both parties can agree on the value of a dollar.” Example: I had a farmer who wanted to trade me about $400 worth of beef for about $1000 worth of membership fees. But my freezer was already full. Obviously, I didn’t like the deal. (Luckily he found out that I could save him over $120 monthly on his meds which more than offset his $100 membership and we didn’t have to keep having the beef negotiation!) But perhaps you could give a housekeeper free membership in exchange for his or her services. When you take a social history and your new patient tells you he’s a computer/IT specialist at your local bank, ask him if he’d ever be interested in trading a month’s membership fee when you need your computer fixed. Probably will only take him 15 minutes, and saves you a bundle--you both win. Bartering is generally a no-money traded affair, but you’re trading goods or services with a monetary value. For this reason, you need to agree on the monetary value of the traded services and keep records for tax purposes- this is something to discuss with your accountant. You can also make bartering arrangements with more than one party as mentioned earlier, and demonstrated in the table and illustration below: 
8) Ask others. You’re not the first person to start a DPC clinic on a dime. When you can’t figure out a cheap way to do something, ask somebody who’s been there before you. Join, then reach out to fellow members of the DPC Alliance, use the DPCA’s University database, etc. There are online groups, discussion forums, and books. Many DPC docs have come up with novel ways to save money. 9) Join a GPO. Group Purchasing Organizations are basically like a discount membership. You pay a fee or buy a product (such as an EMR, for instance) and with it comes discounts at places that sell stuff you might need (medication wholesalers, medical equipment suppliers, wholesale labs/pathology services, etc.). If you can’t get the thing you need anywhere else, and you’re stuck getting it from a supplier, you might as well be part of a GPO so you get a group discount. Along these lines, get Amazon prime. A flat fee gets you free shipping, and often (not always!) you can get things there at lower prices even than your wholesale suppliers, or suppliers in your GPO. Things I sometimes get there include paper towels, business card magnets, certain orthotics/braces, medical supplies for patients (they benefit from my free shipping if they don’t have prime), office supplies, and random odds and ends. 10) Form an informal GPO. Join up with all the DPC docs in your region. Together you can save each other money by buying in bulk and sharing on things like immunizations, medical supplies, things that expire like suture, meds, etc. Other benefits of this kind of arrangement is selling extra stuff. Maybe toward the end of the flu season, you’ve got 20 extra flu shots that are going to expire on you, but a colleague nearby needs some. You can sell it to them at cost, saving them on shipping and you don’t have to eat the cost of the unused vaccinations. Or trade them some flu shots for some suture or lidocaine, etc. Members of our regional DPC Alliance routinely show up to the quarterly meetings with stuff to trade. 11) Combine several methods listed above. Here’s an example of how I got a $1300 high-end laptop computer for $700:
Starting a DPC clinic doesn’t have to be incredibly expensive, but it is if you’re not willing to be creative, look for deals, find mentors, and negotiate wherever possible. Regardless of how you go about it, do it. DPC is incredibly rewarding!
Considerations for a MicropracticeIf you don't want to wear ALL the hats, then having a micropractice is not for you. A micropractice clinic essentially has no staff; you are the receptionist, data entry clerk, biller, contract reviewer, inventory & supply manager, nurse, MA, office manager...and physician. WHY So why would you consider having a micropractice? You're just starting out To save on payroll & tax To avoid HR issues & have complete control and compliance on office policies To communicate with patients directly and succinctly To have more flexibility i.e. having a part-time schedule, have a telemedicine-heavy practice You're financially OK with a smallish patient panel HOW Follow STARTING A DPC PRACTICE CHECKLIST SPECIAL CONSIDERATIONS for the Micropractice: It's very important to set patient expectations up front about your available hours and how patients may communicate with you. Will you allow non-secure emails & texts? Have this in your patient Agreement and / or a welcome FAQ handout. OFFICE HOURS Based on personal or family needs, do you want 2 hr lunches/ admin time? a half-day off? extended early morning or late evening hours? OFFICE SPACE How much space do you actually need? Do you want the public to know (on your website or social media) that you have no staff? Install extra security features in your clinic & surroundings. GROUP MEMBERSHIPS On-boarding new members of a group is more time intensive initially. EFFICIENCY Automate. Automate. Automate. Maximize tech tools to your benefit Get a robust EMR system with integrated fax & eRX and patient portal. Patient portal self service includes scheduling, bill pay, encounter summaries, refill requests, documents, secure messaging. ADMIN DUTIES Create admin duties for front & back office staff (should you later hire for these positions), and how often they need to be done. Block recurrent times on the schedule for these duties. EXTRA SERVICES You may or not want to provide and fit these into your schedule, without assistance: Housecalls Medication dispensing Phlebotomy PFT / diagnostic testing/ POCUS Aesthetics ROLES to OUTSOURCE, or not Housekeeper Landscaper Bookkeeper Contract reviews Marketing WHEN IS IT TIME TO TRANSITION? Set your criteria to close your panel or add staff or a partner, i.e. when you're unable to respond to patients' needs within 48-72 hrs? Or you find someone you can depend on 100% to hire. VARIATIONS on the Micropractice: micropractice with a Virtual Assistant micropractice in a group practice (physicians only and no staff)
Opening a DPC Practice in Your HomeA 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.
CHOOSING AN EMRThere 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. EMR SUPPORT
EMR PLATFORM
COSTS
INTEGRATIONS
PHYSICIAN FACTORS:
PATIENT FACTORS:
BUSINESS FACTORS: (practice management)
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.
Social Media: 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. DPC Conferences: 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.
Questions:
Erasing Self DoubtDo 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:
Selling Your DPC VisionVISION 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.
INTEGRITY 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
Building Your TeamAny 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? DOMESTIC PARTNER 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.
DPC and InsuranceAlthough 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:
CONVENTIONAL INSURANCE: 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. MEDICATIONS: 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. MANAGED CARE/HMO 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.
MEDICAID: 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. MEDICARE: 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.
DPC and the UnderservedAs 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
UNINSURED/UNDOCUMENTED
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