In a typical primary care physician practice, it’s not uncommon for health insurance and other overhead expenses to swallow the majority of every dollar spent on care. An alternative practice model known as direct primary care, however, puts the majority spent in the practice back into patient care, says Dr. Jon Van Der Veer. 

In January, Van Der Veer opened Exemplar Care in West Des Moines. His goal is to build a direct primary care practice that will serve several hundred self-paying individuals as well as group members of a number of small businesses. 

Under the model, which is often referred to as a “cousin of concierge care,” patients pay a flat fee for unlimited visits and access to the doctor, and also pay the doctor directly for any medical procedures, labs and prescriptions, at prices negotiated by the physician. In contrast with most concierge care models, however, direct primary care practices and their patients don’t file any claims with health insurance companies.  

“This is trying to get health care back to where it was 40 years ago [when patients paid their doctor directly],” he said. “So this isn’t a new model — it’s a recycled model.”

The negotiated lab, procedure and drug rates that Van Der Veer passes along to his patients are typically the same rates that Medicaid would pay. For instance, an MRI with contrast might have a list price of $1,900, but Van Der Veer is able to pass on his negotiated rate of $348. He posts all of his rates — which he said are negotiable — on his website as well. 

Exemplar doesn’t yet make referrals to specialists, but Van Der Veer said that he plans to do that in the future. 

A national network of direct primary care clinics, MDVIP, has also attracted two Greater Des Moines physicians — Dr. Fred Marsh in Ankeny and Dr. Jeffrey Lenz in West Des Moines — who each have established independent MDVIP-affiliated practices. Marsh opened the first MDVIP clinic in Iowa in April 2018. 

“As a third-generation family physician, I’ve witnessed the erosion of the doctor-patient relationship in traditional high-volume primary care practices,” Marsh said in a news release when he launched the practice. “With a smaller practice, I have more time to partner closely with my patients on setting goals and creating a customized wellness plan that guides them to a healthier, more active lifestyle.” 

Based in Boca Raton, Fla., MDVIP has approximately 950 physicians across the country who offer a direct primary care practice, cumulatively serving more than 300,000 patients, according to the company’s website. Both Marsh and Lenz declined to be interviewed for the article. 

According to the Direct Primary Care Coalition, an advocacy group, 27 states have enacted laws setting guidelines for direct primary care practices. Iowa’s law was enacted last year with passage of House File 2356.  

Among the requirements of that legislation is that direct primary care physicians are required to inform patients in writing that the fees paid do not cover major procedures or illnesses, and that patients should have at least a high-deductible health insurance plan. 

It’s a different way of thinking about health insurance, Van Der Veer said. 

“If you think of health coverage as more comparable to auto insurance, your auto insurance doesn’t pay for your oil changes or tire rotations — it covers the big expenses if you have an accident,” he said.  

Direct primary care practices such as Exemplar are able to negotiate competitive rates because rather than using insurance, each physician is on the hook for the procedure or medicine cost, which the physician then collects from the patient. “So part of it is me saying, ‘I’m backing this through my practice,’ ” Van Der Veer said. “Actually, I didn’t expect that good of a deal. And when I got it, I was pretty darn happy.”  

He dispenses medications directly from his clinic, rather than through a pharmacy. A common antidepressant, Lexapro, for instance, has a list price of $11 per tablet, but he gets it at 4 cents per tablet, the cost of which he passes on to his patients.  

Van Der Veer was formerly the regional medical officer for CareMore Health’s Iowa operation, which treated Medicaid patients as a sister company of Amerigroup. Before that, he was vice president of medical affairs for Greene County Medical Center in Jefferson. He started his career as an internist with UnityPoint Health. 

“Part of my work with CareMore was researching different kinds of care models, and in doing so I stumbled upon the direct patient care model,” he said. He has patterned his practice on one operated by Atlas MD in Wichita, Kan., which provides a startup bundle that includes an electronic health record system. 

The [electronic health record] is the only part of it they charge for,” Van Der Veer said. “It’s just their belief that it’s a different, more patient-centric way to practice medicine. They know that it’s not a panacea that fixes everything, but for a lot of what ails health care it’s a step in the right direction.” 

His initial goal was to sign on 15 patients in his first year, and he actually reached 30 patients in his first five months. But he’s also negotiating with various employers that could boost his patient count to several hundred very quickly. 

His corporate rate is $50 per month, per member, and employers can opt whether they want to pay their employees’ costs for lab fees and medications. 

“The neat thing about the way the [legislation] is set up is that they set up the billing [for their employees], but then they step out of the way and it’s back to just the patient and the physician,” he said. “I think having such a tight labor market, people are curious whether there are some benefits to be gained by not having to have discussions about copays, and get some of that stuff cut.” 

As a physician, Van Der Veer has found that the additional time he is able to spend with each of his patients enables him to be a better advocate for their health. 

For instance, he saw a patient who had what appeared to be carpal tunnel syndrome in his wrist – but to be safe he suggested to the patient that he get a nerve conduction study through a neurologist to make sure it wasn’t a more serious condition. 

That led to Van Der Veer seeking an MRI of his spine, which showed that the patient had a huge herniated disc that needed immediate surgery. “If I hadn’t pushed to get this done, he might not have gotten this serious condition taken care of until three weeks later, which could have resulted in paralysis,” he said. 

Could more patients bring too many administrative duties and crowd out time for patients? 

“That’s why I set my [goal] for between 500 and 800 patients,” he said. “Let’s say I hit 400 patients and it’s not sustainable. Then I would bring on an administrative assistant. Right now I do my own blood draws, but at some point in the future I hope to bring on a nurse or CNA to do some of that stuff; they’re just better at it than I am.” 

He’s found that patients are often as enthusiastic about direct primary care as he is. 

“If we talk about diet and exercise at your visit, I can actually put a note on the [electronic health record] to ping you in a week to see how it’s going. And so I can build in some of these follow-ups real-time and have some real conversations and be texting back and forth about stuff. That’s been really neat.”