How “Direct Primary Care” Works For Patients, Providers, And Payers

In my endless quest for delivery models that provide patients with easy access to high-quality and affordable primary care, I am driving through the Austin, TX suburb of Leander looking for a clinic operated by Frontier Direct Care.

The first thing I notice is that it’s very hard to find. Waze directs me to its address in a small strip center, but my destination appears to be occupied by a bar & grill. I nervously call Frontier’s founder and CEO, Bibb Beale, who has agreed to meet me there and show me around. Fortunately, he picks up and assures me that the clinic is there, just behind the bar & grill. Checking again, I find the inconspicuous clinic, which has no external signage. It says “Frontier Direct Care” in small letters on one of the double-entry doors and “Leander ISD” on the other.

The second remarkable thing I notice, walking in, is that there is no receptionist and no patients in the attractive but very quiet waiting room. Bibb explains that the reason for this is that the clinic is entirely dedicated to Leander Independent School District (ISD) employees (thus there is no need for it to be in a more visible retail location), and that approximately 13% of the 6,400 employees covered by their health plans have opted for this health benefit thus far—even though the clinic only opened a few months ago.

Beale says that the clinic has eight physicians and advanced practice providers, so each provider would have a maximum of 800 patients in their panel (about 100 today) if all of Leander ISD’s covered employees enrolled. Compare this to 1,500-2,500 patients in most traditional primary care practice panels. Frontier patients make in-person appointments online (they also initiate virtual appointments), and their dedicated provider meets them when they arrive, so no receptionist is required.

“How is it possible to provide this level of white glove care?” I ask. He tells me that it is because they don’t take insurance or the related cost of processing claims, which are estimated to consume 10-15% of all healthcare-related expenses. Instead, they contract directly with Leander ISD (and other employers, and in other markets), which pays them a monthly per-employee fee to provide essentially unlimited primary care services to their employees who don’t have to worry about deductibles, co-pays, coinsurance, and other out-of-pocket costs.

The result is that patient satisfaction is very high (94 Net Promoter Score); providers like it because they have small patient panels, can spend more time with their patients, and don’t have to spend any time on insurance-related administrative tasks (making it easy to recruit and retain, which is a huge benefit given widespread healthcare staffing challenges); and Leander ISD likes it because they have satisfied employees who are getting better and less expensive healthcare.

DPC Profile

This is the still-young but rapidly growing Direct Primary Care (DPC) model. It is different from also fast-growing “Concierge” practices, in which providers shrink their patient panels and charge annual fees for preferential access but still largely depend on insurance reimbursements.

The number of DPC practices has grown from about 500 in 2015 to more than 1,400 today, and annual membership growth—including both individual and employer-sponsored memberships—is estimated to be 30-40%.

According to a 2024 study by the American Academy of Family Physicians (AAFP), about 9% of their members are practicing in a DPC today. 84 percent of DPC practices don’t accept any form of insurance; monthly membership fees average $50-$100 for individuals and $100 or more for families; and two-thirds of DPC practices participate in employer-based contracts (while Frontier’s Leander clinic is dedicated to a single client, they and other DPC providers frequently have multiple clients’ employees sharing a clinic).

98 percent of the AAFP study physician respondents said they felt that the quality of care provided to patients was better in a DPC clinic than in conventional practices, and overwhelming numbers of the respondents felt that practicing in a DPC clinic improved professional and personal satisfaction (97%), their ability to practice medicine (94%), and their patient relationships (94%).

How DPC Saves Money

The value proposition for employees, patients, and providers is not hard to understand, but how does DPC save money for employers in an era when employee benefit costs have been rising at a 5-6% rate and frequently are the fastest-growing line items in employer budgets?

First, because DPC provides comprehensive primary care (the absence of which has been shown to be a key driver of healthcare costs) with a focus on preventive care, which frequently is not a priority for providers who accept insurance because insurance generally does not reimburse adequately for it. In any case, many providers don’t have time to deliver preventive care because they are running so hard with large patient panels to maximize visit volume in order to be financially viable.

In addition, since patients being treated in DPC practices don’t have to worry about deductibles, co-pays, and coinsurance, they are less likely to delay or skip important visits related to chronic conditions and other health issues that can turn into serious and expensive medical problems if not caught early and managed effectively. Research also shows that DPC patients are less likely to use more expensive forms of care, including ERs and specialists.

Furthermore, the healthier employees that DPC enables through regular care from a dedicated and unhurried provider are more likely to be productive (increased presenteeism) and less likely to skip work (reduced absenteeism). Their ability to make appointments with little or no waiting increases productivity by reducing time away from worksites. Finally, offering DPC can be a differentiator in a tight labor market, and satisfied employees are less likely to leave their employers, reducing costly turnover.

Beyond Primary Care

Employees who elect DPC for their primary care frequently couple it with High-Deductible Health Plans and other forms of insurance, so they are covered in case they need more complex care and/or high-cost drugs. However, some DPC providers—including Frontier—also help patients and their employers in these areas .

Many DPC providers negotiate directly with prescription drug manufacturers and wholesalers, or work with Amazon Pharmacy, Good Rx, and other third parties to give their patients access to generic and other common medications at prices that are significantly less than what they would pay at retail pharmacies. Generic antibiotics and steroids, for example, sometimes cost DPC patients $5.00, or even less, and are dispensed at their clinics or shipped directly to their homes. DPC providers also negotiate discounted rates with local pharmacies, labs, and imaging centers as part of bundled service agreements.

In addition, Frontier and other DPC providers also negotiate cash discounts for high-cost specialty drugs, specialist care, and hospital-based acute care. If these prices are less than what their employer clients would otherwise expect to pay through a Pharmacy Benefit Manager (PBM) or insurance company-operated Third-Party Administrator (TPA), clients reimburse their DPC partners outside of monthly fee arrangements, including small mark-ups. This is yet another way DPC providers help employers save money while providing access to high-quality care for their employees.

It was hard to find Frontier’s Direct Primary Care clinic, but I’m glad I did. No single healthcare delivery model works for everyone, but increasing access to primary care is critical to improving population health and reducing costs, and it’s hard to find models that work for patients, providers, and payers. Direct Primary Care qualifies in this regard, and it deserves an increasingly prominent role in our nation’s healthcare delivery system.