Pioneering flat-fee primary care provider closes five clinics
US medical centres' model of offering direct primary care for a modest, monthly flat fee outside the usual insurance payment, is under threat, following the demise of Seattle-based Qliance. Founded in 2007 and backed by Jeff Bezos and Michael Dell, its model reduced costs and hospitalisations. However, by the start of this year, Qliance had lost some major clients, and its patient numbers had dwindled from 35,000 to 13,000. Five of its clinics closed on 15 June. While many doctors complain of insurance companies' intrusion into patient care and billing hassles, some say direct primary care should be paid for within the insurance framework.
In recent years, a small but growing number of practices embraced a buffet approach to primary care, offering patients unlimited services for a modest flat fee instead of billing them a la carte for every office visit and test. But after a pioneering practice shut its doors earlier this month, some question whether "direct primary care," as it's called, can succeed.

Many doctors and patients say they like the arrangement. Direct primary care practices typically don't accept insurance, which frees physicians from treatment preapprovals and claims paperwork. They say that allows them more time and energy for their patients. Patients can consult with their doctor or a nurse practitioner as often they need to, typically for around $100 a month. (Some employers buy the service for their workers.) Patients need to carry a regular insurance plan for hospitalization, specialists and other services. In the long run, the result should be better patient health and lower health care costs overall.

But some health care experts are concerned that the set-up encourages the "worried well" to get more care than they need. They describe unlimited primary care as a blunt instrument that doesn't necessarily improve the odds that patients will get evidence-based services that improve their health. Others argue it's important to find a way to provide cost-effective primary care within the health insurance context, not outside it.

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Although only a sliver of practices do direct primary care, the number is on the rise, said Shawn Martin, a senior vice president at the American Academy of Family Physicians. He puts the figure at about 3 percent.

Seattle-based Qliance, founded in 2007, was an early leader in this type of care. With startup funding from high-profile investors Jeff Bezos and Michael Dell, by 2015 the company was serving 35,000 patients at several clinics in the Seattle area, including individuals, workers at companies like Expedia and Comcast and Medicaid patients through a contract with the state's Medicaid insurer. The company said medical claims for Qliance patients were 20 percent lower than those of other patients because Qliance members went to the emergency room less often, were hospitalized less frequently and saw fewer specialists, among other things.

By early 2017, though, Qliance was faltering. The company had lost some large employer clients, and its patient base had shrunk to 13,000. On June 15, it closed five of its clinics. Dr. Erika Bliss, the company's CEO, said that in general the market is reluctant to pay what it takes for primary care to flourish, and in some cases payers were resistant to rewarding the company, even when Qliance exceeded targets on quality and savings. She will continue to operate one site that provides occupational health for Seattle firefighters.

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"The bottom line is it's not for free," she said. "You can't do this for $25 [per person] per month. If we start doing it for $50 to $100 per month then we can start doing serious primary care."

The closure took January Gens by surprise. A Qliance patient for a couple of years, Gens, 45, had worked with her primary care doctor there to manage crippling pain from endometriosis. The $79 monthly fee was worth every penny, she thought. She had been able to reduce the dosage of some of her medications and was awaiting a referral to start physical therapy when she learned that Qliance was shutting down. Now she's not sure what she'll do.

"I had felt very lucky to have found Qliance, to know I had a doctor and could always be seen when needed without causing more damage to the family budget," Gens said. "Now it's just gone."

Patients who have chronic conditions that need ongoing management may benefit from direct primary care, said Dr. A. Mark Fendrick, an internist who directs the University of Michigan's Center for Value-Based Insurance Design.

But for people who are generally healthy and without symptoms that need to be diagnosed, "unlimited primary care is no guarantee that the services that are provided will improve the health of those people," he said.

As an example, Fendrick noted that the annual checkup, one of the most popular primary care services, isn't clinically helpful for most people, according to the Choosing Wisely initiative, a program of the ABIM Foundation that identifies overused and unnecessary medical services.

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An examination of research related to direct primary care practices found that they charged patients an average $77.38 per month. "Concierge" medical practices are similar to direct primary care, but their monthly fees are typically higher -- averaging $182.76 -- and they generally bill insurers for their services, the study found. However, the study, published in the November-December 2015 issue of the Journal of the American Board of Family Medicine, concluded that there was a paucity of data related to the quality of care provided by these practices.

Some analysts say that while they're sympathetic to doctors' frustration with large numbers of patients, insurance companies' intrusion into patient care and billing hassles, the answer isn't to turn their backs on insurance.

"I think absolutely this type of care could be done inside insurance, but it means we have to learn how to pay within the system for the things that doctors should be doing and are doing in direct primary care," said Robert Berenson, a fellow at the Urban Institute.

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As things stand now, the direct-care model can create difficulties for some patients. Take the situation where someone goes to his direct primary care provider for an earache, but antibiotics don't work and he needs to be referred to an ear, nose and throat specialist. That patient, who likely has a high-deductible plan to provide non-primary care services, will probably be on the hook financially for the entire cost of care provided by the specialist rather than insurance paying a share.

Qliance's Bliss scoffs at the idea that patients may get stuck paying more out-of-pocket if they have direct primary care. Most people these days have high-deductible health plans, she said. "The reality is that unless you have Medicaid, you are on the hook no matter what."

Offering unlimited primary care inside the insurance system is no guarantee of success in any case. One such experiment, a subsidiary of UnitedHealthcare called Harken Health with clinics in the Chicago and Atlanta areas, announced it will shut down at the end of the year.

The company confirmed that it would phase out membership at the end of the year but didn't respond to a request for further comment.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

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