In this conversation with SoundPractice host Mike Sacopulos, Rob Lamberts, MD, describes the basics of the direct primary care (DPC) model: (1) It is simple. Patients pay the doctor for their care and the doctor does not have to code to submit to insurance companies. The doctor has only one person to please: the patient; (2) It aligns motivations of both doctors and patients. In DPC, the physician is paid the same if the patients are healthy or sick. This means the physician and patient are aligned; they both want the patient to be healthy and avoid going to the doctor; and (3) The payment system is simple and the reliance on technology breaks down complex tasks to greatly reduce cost.
Although this model has many features that stand in stark contrast to “business as usual” in healthcare, the model is not for every physician. In this engaging episode of SoundPractice learn about the pros, the cons, and the pitfalls to avoid in a disruptive model in healthcare.
Mike Sacopulos: My guest today is Dr. Rob Lamberts. Lamberts is Board certified in both internal medicine and pediatrics. For the past decade, he has been involved in the direct primary care model of practice and has been practicing in the Augusta, Georgia area for nearly three decades. Dr. Rob Lamberts, welcome to SoundPractice.
Rob Lamberts, MD: Thank you. It’s good to be here.
Sacopulos: Dr. Lamberts, some years ago you stopped accepting insurance, third-party payments for patient care. How did this come about?
Lamberts: I consider September 30, 2012, as my sobriety date—my date where I stopped taking money from insurance companies. So actually, I’m almost 10 years sober, which is wonderful. I had been practicing regular primary care, fee-for-service primary care, was founder of a practice here in Augusta that started in ’94, and had been doing it for about 18 years, and more and more I was getting burned out and frustrated. And I kept resisting the dichotomy between what was motivated by the payment model and what was motivated by what I felt was the right thing to do. The payment model said, “Spend less time with your people, spend more time with your computer. Spend more time focused on coding and submission of data and less time on problem solving.” The business of medicine became less and less about actually caring for patients in my idea.
So from a business standpoint, the other docs that I was with were wanting to run the business well, which meant, in my view, running away from what I went into medicine for. And so, we had a parting of ways, and I didn’t 100% know what I was going to do. I was writing a lot at that point in time; I had a medical blog that was popular back then, and some of what I was writing was about my journey of dealing with primary care and such. I actually got in contact with a guy named Dave Chase, out of the Northwest, the Seattle area.
Dave had worked with the insurance side of things and got disillusioned by all of that and had come in contact with Garrison Bliss, Erica Bliss, and the very beginning of the direct primary care movement.
I was looking at different models of what I could do. What was I going to do when I left my practice? And I just happened to be talking to Dave and he pushed me in this direction. The idea of going back into primary care with fee-for-service didn’t appeal in the least to me. I could have done VA, I could have worked for a hospital system—that just seemed like more of the same. And then the MDVIP model seemed to be omitting the patients I like the most, which are my elderly folks, my Medicare patients, my Medicaid patients, or the uninsured.
And so Dave talked to me about DPC and the light went off. It was like, “Oh, my gosh, this works perfectly. This fits exactly.” And there were very few practices. I did speak to a couple when they were first starting, but 10 years ago there really weren’t a lot of other doctors doing it. So I kind of had to make a lot of it up myself, but it worked.
Sacopulos: It sounds like it was a bit of an education process for yourself. Tell me about the patients. I mean, this is not a model that maybe they were familiar with at the time. How did you go about telling patients about what you were offering?
Lamberts: Well, I was fortunate, because I was one of the senior partners of the practice. I got a lot of latitude that a lot of doctors don’t get in this type of circumstance. I was able to send out a letter to all of my patients, and then hold a meeting at a local church, where I explained what I was going to do. I wasn’t going to accept insurance anymore. I wasn’t going to accept payments for office visits. It was just going to be a monthly fee, but it wasn’t going to be a high monthly fee. And about 200 patients, out of probably 3000 at that point in time, followed me. Which was disappointing to me at the time, but I don’t think I could have handled more. I think it all worked out very well.
Despite the fact that they thought I was a good doctor and they appreciated me, this idea of not doing things with insurance just felt weird for a lot of people.
And it was new for them. And despite the fact that they thought I was a good doctor and they appreciated me, this idea of not doing things with insurance just felt weird for a lot of people. And so very few of the people who came over to me at the start have ever left. They’ve kept with the program the whole time. But to some extent they were following me because it was me, not because of the model. But since then, I think, a lot of folks have come over.
Sacopulos: Well, let’s fast forward to present days with a pandemic. How’s the direct primary care model dealt with COVID-19?
Lamberts: One of the problems was that in-office volumes dropped dramatically for a lot of offices, and the system wasn’t set up to deal with visits that were not in the classic, you come in the office, I spend time with you, I code for problems, and all the rest. The classic fee-for-service model, primary care doctors took an enormous hit. A lot of them were going for the loans, the funding, the PPP or whatever it is that came out at that point in time. We saw no drop, because our model says you can come into the office, but we’ll handle most of our visits via text messaging or phone call or video visits. And we just shifted to all video visits for a period of time.
If somebody had to come in, we would have the door shut and just bring one patient in at a time. I still did in-office visits, but those first days were kind of crazy, and everybody knows it was a little scary. When you have a membership model, you look at the “churn rate,” which is essentially, what percentage of your patients are leaving you each month? And what we saw was that that churn rate dropped to near zero, very few patients. If you can have a doctor who you can reach via text message or phone call, and not have to worry about a lot of the pandemic, it’s almost as if DPC was set up for dealing with this. We didn’t miss a beat, and incomes went up for most direct care doctors.
Sacopulos: What percentage of your patients carry traditional health insurance?
Lamberts: That’s interesting, because when I first started out, it was definitely heavily, maybe 70%, were uninsured. But it was an interesting time, because that’s when the Affordable Care Act, Obamacare came out, back 10 years ago. I was just starting, and the Affordable Care Act comes, and so then we kind of went back toward insurance, and then the Affordable Care Act did about as much as it could and then it receded. But now I would say about 30% to 40% of my folks are uninsured. Most of those are small business–type people who are either employed by small businesses or who own small businesses. And so that number has gone back.
My business partner, Ed Boland, he started three years ago, and he has more uninsured folks as well. But, again, it is not uninsured as in not working, it’s more uninsured in that traditional health insurance is still too expensive, especially for small businesses.
Sacopulos: Do you have privileges at the local hospital? If any of your patients are admitted, would you see them in a hospital setting?
Lamberts: I do not see them, but I will say that I pretty much stopped doing that when I was in my old practice, certainly adult patients. The only patients that I would potentially see in the hospital, admitting privilege-wise, were my pediatric population, where I would do newborns and such. And that volume dropped so dramatically, because the truth is pediatrics is a little harder to do with direct care. I’m starting to build that population back up, but initially it was like most of them had Medicaid, but we have PeachCare, which is kind of a Medicaid-ish program. The program’s based on Medicaid for the gap between insured and poor.
Most kids have coverage of some sort. When I was predominantly uninsured, very few pediatrics patients came over, but that number’s actually been going up quite a bit, which has been good.
The thing is that with people who were in the hospital, what they are realizing is that hospitalist care is so disconnected, it’s such a different silo from the care that you get outside of the hospital, that they’re essentially disconnected. And that disconnect creates a real quality gap. That disconnect between the care that I’ve been giving for a patient for 10 years, and then they go into the hospital, and the 10 years that I’ve given to this patient and worked on these problems trying to keep them out of the hospital gets completely ignored by the hospitalist.
We will talk to the patients while they’re in the hospital and give them advice and tell them what to tell their doctors, or even if they go into the emergency room. Eventually, I would love to have a big enough practice that I would be able to have my own hospitalists that understood and saw this as a continuum of care, not as just these siloes of care, which I think is really harmful to people. I think it ends up giving poorer care, because it ignores all the rest of the things that other people have been doing.
Sacopulos: You’ve got my vote, Dr. Lamberts, on that. Now, tell me, this is a nut and bolts type of question, do you use an electronic medical records system in your office?
Lamberts: Of course. In fact, back in 1997 is when I started using electronic medical records, if you don’t count in Indianapolis, where I actually used the electronic medical record system there from 1990 to ’94. I’ve been doing electronic medical records forever, but, yes, we use Elation, which is a cloud-based system, that doesn’t focus on billing, which is what we like. We like the fact that it has a clinical-first approach.
In fact, that was actually one of my biggest challenges 10 years ago, because I looked at electronic medical record systems and most of them were not clinically oriented. Because it was about E&M coding and about all of the Meaningful Use criteria at that point in time, and the MIPS and the MERS and all the other types of things, data that you were submitting.
That’s the product of medicine that healthcare is all about. And I was opted out of Medicare, so I had no interest in any of that stuff. The EMR systems were terrible. They were just terrible, clinically. And I actually made my own EMR initially, I was so much a geek. I made my own EMR system off of a FileMaker Pro database and built it, and used it for about three or four years. And then finally found one that was good enough to be able to use from a clinical standpoint.
Sacopulos: How does the billing or collections side of the practice work? This is an area of medicine that usually is monopolized by insurance companies taking premiums, right?
Lamberts: Right.
Sacopulos: And then paying it out to practices. But it seems to me that with hundreds of people, you may have a collection issue.
Lamberts: I don’t have a collection issue. We use a company called Hint, but really it’s a subscription model. So you just essentially say, “You pay us monthly and that’s how you are able to stay a patient in the practice.” And one of the keys, early on, I was thinking, “Well, maybe you do it, if you sign up for a year, you get a discount,” and all the other types of stuff. What I realized is that created way more complications than anything.
What we do is we say, “Look, if people are on time, they’re a member of the practice.” That’s how they renew their monthly membership. If they don’t pay, they’ve got 30 days of grace to pay, but they’ll be reminded that they’re past due. If they’re over 30 days, then up to 60, then they’re in a period of time where they have to pay us back for what they haven’t paid us to get back on, and we’ll have a little extra fee. And then if they’re over 60 days, we won’t be their doctors anymore.
It’s fairly simple to control that, and say, “Okay, you’re past due, we’re not going to refill medicines. We’re not going to do all the other stuff.” And if somebody just makes a mistake or whatever, then we don’t care. They just pay us back and keep doing it. If you look at our 90 days accounts receivable, it’s usually less than $500 90 days accounts receivable. And in fact, our 60 days, a lot of times is less than a $100, which is unbelievably good for a business.
But it’s automatically withdrawn from their credit card and a certain amount of people will send in checks or even come in and pay cash on a regular basis or a cashier’s check or whatever. Fine, whatever way, it doesn’t really matter.
But that’s the key, that we do it by month, and then people will drop off. And then if they have to sign up again, well, then they have to go through the signup process again and pay the signup fee, which is a little extra. Again, it’s not like we’re charging that much. We’re charging on average, probably $50 to $60 per month for a person. And so people would be surprised, people are like, “Well, this doesn’t work well for the poor people.” We have Medicaid patients. In fact, I think, if you say something’s $50 a month, very few people out there can’t afford $50 a month or can’t scrape it together.
But the good thing is that, let’s say, we’re taking care of a family and the mom or dad lose a job or they just can’t pay. And they say, “We have to stop because we can’t afford it for the whole family.” And we say, “Look, I’ll tell you what, for the next three months, while you’re getting on your feet again, we’ll charge you 20 bucks a month.” They are very grateful. We don’t have to apologize to an insurance company for not collecting what we should. It’s our business, we can run it whatever way we want, and then people are going to be loyal.
Sacopulos: Sure. So on your website, it looks as though the monthly fee is determined by the metric of age. Are there any other metrics, let’s say, I have some preexisting condition, would that be factored into my monthly fee?
Lamberts: Not at all. And there’s that discussion within the direct care community of whether or not to do that, but I know very few who do that. It’s usually just by age. It’s more economics, the way that I look at it is this: the majority of people in their 20s are not going to tolerate paying $50, $75 per month. What we want to do is get these healthy people who are paying maybe $40 a month, and they could tolerate that from a monthly fee standpoint. But if you’ve raised it too high, then you’re eliminating those people who are not going to utilize your services. You really want to find that sweet spot where you get a lot of people out there who are not utilizing you a lot, maybe once a year or twice a year or whatever, and they’re still paying you on a monthly basis.
It’s just an economic calculation that you do, when you’re trying to find that sweet spot. We tend to run a little bit lower, but especially in the lower age brackets, and as somebody is in their 60s or 70s, they have enough health problems that they’re very much wanting to have a doctor who is available to them, not just for if they catch a sinus infection or whatever, but to help manage their high blood pressure, order the bone densities and all the rest of those types of things. It’s a lot easier for people who are in the Medicare population.
Sacopulos: One of the interesting things that your practice does is help negotiate reduced fees for services and medication. How wide is that net?
Lamberts: It’s great. It’s one of the most fun things to do because what we do is, first off, we’ll go to a lab. We negotiate the client billing price, which is for a CBC is four dollars or for a metabolic profile is three dollars. And so instead of upcharging and making a profit off of that, we just keep the price very close to that fee. So they come in and get their labs done, and their labs cost them $10 for a CBC, lipid profile, A1C, and a CMP. And they’re like, “$10, I don’t know if I can afford that.” And we can get wholesale generic medications. And so we can get blood pressure pills or cholesterol medicines for two dollars a month or a dollar a month, or antibiotics for two dollars. It’s significantly cheaper than most of the GoodRx prices and such, a lot cheaper.
The business proposition is this: we could upcharge those things. But there are two things that factor in here: number one, we’re never going to make anything close to what we make on the monthly fees. The monthly fees are where everything is at. It’s really not worth marking it up. But the other thing is that I’ll routinely have patients who, when they first come in, they’re on like four different medicines or five different medicines. And we ask them how much they’re paying a month, and they’re paying $60, $70 a month. And through our practice, they paid $10 a month.
Well, then from their standpoint, the business proposition is easy, “I’m barely paying for this doctor, because I’m paying $50 a month and I’m saving $40. So the net cost for me is $10 a month. And I get a doctor I can send text messages to, who can be seen the same day, almost every time. Who will spend a half hour with me in the office, if I need to. And it’s a win.” And the only other thing that it’s the psychology of, “I just got a bargain.”
I don’t know if there are very many circumstances within healthcare where somebody walks away feeling like they got a bargain, and yet that’s what we can give them, that feeling of getting a bargain. Most of the time you feel like you’re being ripped off. They’ll say, “Well, what’s the catch?” “Well, the catch is, you just keep paying me every month. And I’m not going to apologize for that,” but I’m trying to make it worthwhile.
Sacopulos: It seems to me you’re collecting money to provide future service, which may or may not be necessary, that somewhat sounds like insurance to me. Are you regulated by the state of Georgia as an insurance carrier?
Lamberts: We are not. Back 10 years ago, that was a concern. We had to do separate little things saying, “Well, if you came in more than six times a month, then there would be a $20 fee” or something like that, that would put us out of that insurance mode. Now, most states have recognized the direct primary care model and say, “Now, it’s not insurance. It is care.”
It’s really not for future services, essentially people are paying for access. Access is the commodity that we’re giving them, access to me, access to my nursing staff, access to whatever they need. I had a family where the kid was a little bit sick and, in that intermediate worrisome mode, she texts me at like four o’clock on Sunday afternoon, and I’ll usually look at those. Most of them are people just asking for medicine refills, so we’ll just wait till Monday for that.
But this was one I asked questions, and they were so grateful to be able to have a doctor they could text message with on a Sunday night. That’s what the monthly fee really is going towards. It’s going towards having access to me, having access to my nursing staff, who is wonderful. That’s what you’re paying for. Not in case I need it. No, no, you have access now. And if you don’t use it, well, that’s your thing, but that’s really what we’re charging the monthly fee for.
Sacopulos: Dr. Lamberts, our time here is closing out, but I imagine that in our audience today are a number of people that are contemplating what you did. Can you maybe tell them some things to look forward to or look out for as they move into a direct primary care model of practice?
Lamberts: Ten years ago, I had to basically make it up, even making up my own medical record system. Nowadays, there are businesses out there catering solely to direct primary care. It has become a force, not a big one, yet, but it’s starting to be a movement.
The first thing I would say is take advantage of all the other docs that have done it. There’s the Direct Primary Care Alliance (DPCA). There’s Hint Health, which is having a summit next week in Colorado, that I’m going to be going to, where they are just talking about innovative ways to grow the DPC movement and you can network with other clinicians who are doing it.
And I would say also that most of us have this philosophy, that a rising tide lifts all boats. We want more DPC doctors. I’ve had folks coming through my office and seeing it working in real life, but it’s a good business model. We actually went and talked to the residents here at Augusta University. The lifestyle, that feeling of being on a hamster wheel, I just remember that feeling of burnout and despair.
The experience that I have, that my nurses have, and that my patients have is all way higher than the experience that you would have in a typical primary care practice.
I’ve never seen more than 15 patients in a day, and I have a very mature, full direct primary care practice. My patients feel like they’re getting my full attention, and they’re so appreciative. The experience that I have, that my nurses have, and that my patients have is all way higher than the experience that you would have in a typical primary care practice. It’s just better. I can give better care. Some would criticize, “Well, but you’re only seeing 800 patients.” And the answer is, “Yeah, that’s true, as opposed to the 3000 that I saw in my old practice,” although that’s a debatable number, but the answer is, I didn’t really give them access. I didn’t really give them care. If I’m offering really good care to 800 people or offering crappy care to 3000 people, I think I’ll take the former.
My hope is that this will draw people back into primary care, because primary care has been poorly paid compared to other specialties. And people will go into dermatology or radiology or whatever, which I personally find really boring. Why would anybody go into dermatology or radiology? Because all you’re doing is one thing again and again and again, as opposed to me, where anything can walk in the door and I’m problem solving, and I get to hold the hands of people and give them hugs and build these long-term relationships. It’s why I went into medicine.
My advice is: go visit direct primary care practices. There are probably some in your area. I almost guarantee you, they will be delighted to talk to you and to help you. We’re actually starting a business, in the Augusta area, with the goal of growing direct care practices throughout our area and building up a larger base of DPC practitioners. And that’ll give us the ability to make contracts with businesses and do all this other stuff. So the business model is growing and growing the more people that do it.
I think we’re all starting to think this way and saying, “Let’s offer this wonderful practice opportunity to practitioners coming out of residency, or the 50-something docs who are totally burned out who need something, kind of like I did 10 years ago.” It’s a winner.
Sacopulos: My guest has been Dr. Lamberts. Doctor, thank you so much for your time.
This article is a transcription of a podcast posted on September 7, 2022 at www.soundpracticepodcast.com/e/dr-rob-lamberts-and-a-direct-primary-care-dpc-practice/ posted. This transcript of their discussion has been edited for clarity and length.