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Hybrid DPC: Transitions & Tradeoffs

By
2020-11-28

As fee-for-service practices struggle under the burden of increased overhead costs, insurance red tape, and endless data entry, Direct Primary Care offers a way out. But although an immediate escape from these burdens is enticing, a hybrid model of FFS and Direct Primary Care may help DPC hopefuls make the switch with a longer timeline and lower risk.

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The First Steps on the Path to DPC

The first step to transitioning from FFS to DPC is getting the organization onboard with the direct care model. Of course, with any change, employees will be concerned about what lies ahead, from compensation structure to job duties. Consequently, it’s important to be able to make a compelling case, showing that you’ve done a comprehensive review of the model, understand the opportunity, and have a plan to move forward.

Here are some things you should work on and be ready to discuss if you wish to pursue a hybrid DPC strategy:

  1. Assess feasibility. Decide which types of patients you will serve based on the specializations of your physician(s), what services you will offer and which ones you won’t, and whether this hybrid approach is long term or being used solely to transition to full DPC.
  2. Assess expenses. This includes rent, utilities, staff payroll, and the cost of operating two diverging methods of care in one facility.
  3. Communicate the opportunity: Set some time aside to explain how the practice will function, and how each employee, not to mention the patients, will benefit from direct primary care.
  4. Establish vendors. Decide which vendors you’ll use for labs, wholesale medications, EHRs, Telemedicine, and billing.
  5. Establish a DPC fee structure. Determine your fee structure, and decide what differences, if any, there will be between the fees for insured versus uninsured patients. Of course, this structure must be both feasible and profitable for the long-term, so keep your budget in mind.
  6. Maintaining your FFS practice. Recognize that the FFS portion of this hybrid practice will likely float the DPC portion until it becomes profitable and sustainable. Although it’s a challenge, the needs of your FFS practice can’t fall by the wayside as you build your DPC practice.

Tip: When planning your hybrid strategy, think about your practice’s status quo. For example, how many additional patients can your staff take on? How much physical space (e.g. exam rooms) do you have? And how much capital do you have to invest in your new business? These factors can help you scale your strategy to be ambitious, but still realistic.

Bridging the Gap: Introducing DPC to Your Organization

The hybrid approach lets physicians continue to operate their FFS practice in parallel with their growing DPC practice, allowing them to steadily prepare for the change. While operating these models simultaneously, physicians can:

  • Introduce FFS patients to the benefits of DPC through one-on-one conversations.
  • Give an extension to FFS patients, such as Medicare or Medicaid patients, and explain how their personal transition will affect them.
  • Hold “town hall” meetings to explain DPC to all existing and prospective patients.
  • Market the new practice through local media.
  • Meet with insurance brokers and local business leaders who may be ready for change.

As DPC membership grows and as the team adapts to the change, leaders can then slowly wind down their FFS practice at a pace that works for the team and the bottom line OR invest additional resources into DPC to expand that side of the business without reducing FFS.

Time and Money: The Benefits of the DPC Hybrid Model

Time is one of the many benefits of transitioning to DPC through a hybrid model. DPC physicians aren’t rushed to meet a certain end or start date. Therefore, they can maximize the extra time by introducing the idea of DPC membership to FFS patients organically, getting feedback, and allaying patients’ concerns about the switch. Ultimately, DPC docs have found that this additional time has helped them to hone the DPC message.

Hybrid DPC practices also benefit from having access to the FFS-sides capital and services such as labs, vaccines, and imaging; and the ability to share common business expenses like benefits, malpractice insurance, rent, and utilities. Some physicians have even found that cost-sharing and access to FFS services makes the case for a permanent hybrid model.

Deciding to Go Hybrid

Whether used as a method of transitioning into a full-time Direct Primary Care practice or to serve as a permanent solution, the hybrid model is worth exploring. This approach offers cost-savings, more preparation and planning time, and access to valuable services, all while allowing physicians to take real strides toward making the switch to DPC.

 

Tags: Hybrid DPC, Launch Advice, Medical Practice Management

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