Transitioning to DPC: Challenges & Strategies

Due to the extensive business planning, project management, and support activities required for a primary care practice to transition to direct primary care (DPC), providers frequently seek external professional services. In this article, we discuss reasons why providers are apprehensive to transition and then we offer a series of recommended steps to help make transition easier.

Practice conversion deterrents typically stem from:

• Worries regarding patient attrition.
• Hiring a new office staff or changing the roles of current staff.
• Concerns about providing more attention to patients and having a manageable work-life balance.
• Potential to work longer hours. Depending on the provider services offered in a concierge model, providers may need to be available for patient care more often than in their current practice.
• Concerns about the new revenue structure.
• Regulatory and compliance challenges.
• Time and effort required to manage the conversion while still seeing patients.

Transition Steps

The deterrents mentioned above can be overcome through good planning and change management. Here are five steps providers should take to increase the likelihood of a successful transition to a concierge medicine practice.

1. Conduct a Market Assessment

Before converting from a traditional primary care practice, providers should conduct a market assessment to determine if their geographic and demographic markets have the potential to sustain a concierge medicine practice. Income, age, sex, and other socioeconomic factors of the potential patient population should be evaluated to get a strong understanding of the market.

An often overlooked part of the assessment is the competitive landscape in the provider’s desired area. Addressing the following questions will help providers understand their competition:

• Are there any existing direct care medical practices operating in the area?
• What customer segments do they target?
• What services and products do they offer?
• How many patients do they serve?
• How satisfied are their patients?
• What is their competitive advantage over other direct care practices?

A well-researched competitive landscape, combined with market demand, will help interested providers determine if a new concierge practice is feasible in their area.

2. Develop a Comprehensive Business Plan with Financial Projections

At the onset of the transition, providers need to formulate a clear business strategy to inform and guide all operations and activities. A comprehensive business plan is essential along with the pricing strategy for the targeted patient volume. Here are some categories to consider when creating your business plan:

• Targeted customer base
• Target number of paneled patients
• Membership services
• Fees
• Marketing strategy
• Acceptance of third-party payer reimbursement
• Operational policies and procedures
• Cash flow and income statement projections

3. Manage All Legal and Regulatory Risks

Direct care medicine exposes providers to different legal and regulatory risks than a traditional practice model. Providers must ensure regulatory compliance when it comes to the membership services that are included in the program fee. If providers continue to accept insurance, they must continue to bill for all payer-covered services incurred by patients and can’t include those covered services in the concierge membership services scope (i.e., double dipping). To accomplish this, providers should identify which documents need to be amended and track the status of these documents until they are all compliant within the new set of concierge medicine regulations.

4. Align Practice Operations and the Business Strategy

Achieving higher levels of patient service and satisfaction in a concierge practice requires operational changes. A concierge provider may need to change how practice schedules are templated, how patient communications are handled, what staff are employed by the practice, what in-office amenities are provided, and what vendors are used to support membership services. We recommend that providers perform a gap analysis, which compares the two practices and identifies the requirements needed to successfully operate a concierge practice.

5. Market to New Patients Strategically, Effectively, and Efficiently

Achieving and maintaining target patient panel volumes is critical to the financial success of a direct care practice, but attracting new patients requires vastly different marketing strategies than a traditional practice employs. Providers need to develop a thoughtful marketing strategy that takes into consideration digital forays (website, search engine optimization, search engine marketing, social media), and traditional avenues (direct mail, radio, print advertisements).