Proponents of alternative payment models hope the pandemic will drive adoption of value-based arrangements down the line, as the financial pressures facing fee-for-service primary care practices have highlighted the shortcomings of paying for volume.
There's a dichotomy between fee-for-service practices, which have been staring at potential financial ruin since March, and those in alternative payment models, whose finances are in some ways insulated from the worst of the pandemic's economic repercussions.
Primary care practices in the U.S. could lose more than $15 billion this year, according to a study published in Health Affairs late June, as visits plummeted in March amid widespread stay-at-home orders. Though volume is ticking back up, many experts believe patients will continue to avoid non-essential in-office visits as COVID-19 cases rise in the U.S.
But several practices in the direct primary care (DPC) model, where patients pay a subscription fee to a practice for a wide swath of primary care services and insurance is not accepted, tell Healthcare Dive their finances have been relatively unchanged since the pandemic began. Many hope the pandemic will entice more independent doctors to enroll in DPC.
Family physician Michael Ciampi converted his South Portland, Maine practice to DPC in 2014, after 11 years in fee for service, and now has about 650 members.
Ciampi Family Practice has had almost no decrease in income, even when it had to dramatically cut hours to comply with Maine's emergency orders in March, taking them from roughly a dozen daily in-office visits to between zero and three on average.
"If we'd been in fee-for-service, I have very little doubt we would have gone bankrupt," Ciampi told Healthcare Dive. "You can't run a fee-for-service practice seeing three people a day."
Fee-for-service still dominates the healthcare landscape. Only about one in three healthcare payments are in alternative payment models, according to the Health Care Payment Learning & Action Network (LAN), though that proportion is forecast to grow.
Fans of DPC before the pandemic touted the model's ability to free physicians to focus on care while bypassing traditional health insurance, though some customers also buy a high deductible plan for emergencies.
In the past decade, the DPC model has grown from just a handful of practices to over 1,000 in 49 states, covering an estimated 500,000 patients, according to advocacy group the Direct Primary Care Coalition.
Some health systems, large employers and even payers have stepped into the primary care arena, looking for ways to increase low-cost preventive care and up outcomes down the line.
CMS introduced a direct primary care model last year, with monthly capitated payments and a range of risk-sharing options for providers, modeled on its accountable care organization programs. ACOs, which operate on risk, have been ringing alarm bells during COVID-19 about the effects of the unforeseen emergency on their patient outcomes and, correspondingly, their bottom lines.
However, the subscription-based practices — which eschew insurance altogether — aren't completely insulated from the deleterious and pervasive effects of COVID-19 on the U.S. economy.
The unemployment rate lowered slightly in June to a little over 11%, down from a record high of 14.7% in April as millions of Americans were laid off or furloughed. The growing number of out-of-work patients has led some to cancel DPC memberships, slightly depressing revenue for the primary care docs.
Jeff Gold's 700-patient DPC practice in Marblehead, Massachusetts did see a slight COVID-19 dip in membership — down 10% at the height of the downturn as some patients lost their jobs and nixed their subscriptions.
But compared to FFS practices, which reported volumes disappearing almost completely in March and April, that's barely a hit. And since income is the same whether they see patients face-to-face, over a video screen or not at all: "We haven't really had to change anything," Gold told Healthcare Dive, noting his practice has actually seen an increase in membership requests since the pandemic began.
And doctors in the model hope providers will see it as a viable alternative to FFS as they look for ways to solidify non-visit-based revenue in the future, and see the benefits in decoupling from insurance companies and the overhead they entail.
"Not that I'd want the pandemic to be the walking advertisement for direct primary care," Gold said. "But in a lot of ways, it was."