Direct Primary Care: A Predictable Path Forward for CFOs?

Could health systems ditch traditional high-deductible health plans for direct primary care models?

As healthcare CFOs contend with growing financial pressures—from high-deductible health plans (HDHPs) to rising uncompensated care—many are exploring alternatives to the traditional fee-for-service (FFS) model. One such model gaining traction is Direct Primary Care (DPC), where patients pay a recurring flat fee directly to providers for defined primary care services, bypassing insurers and the complexity of claims-based billing.

A DPC model can fundamentally change a health system’s revenue for the better, according to Hari Prasad, CEO of Yosi Health, a software platform focused on creating an easier way for patient intake. For CFOs, this represents a seismic shift in financial predictability and operational efficiency.

RCM Stabilization & Simplification

With a DPC model, health systems receive consistent monthly or annual payments directly from patients, which can improve cash-flow forecasting.

"Instead of waiting for insurance adjudication and reimbursements, practices receive consistent monthly or annual payments... [DPC is] making cash‐flow forecasting far more reliable," Prasad said.

Additionally, DPC significantly reduces the administrative burden of revenue cycle management, particularly in claims submission, follow-ups, and denials. This can allow finance teams to reallocate resources toward high-acuity billing or other strategic projects.

To make this model actionable, CFOs can consider strategic partnerships with DPC-affiliated primary care groups to stabilize outpatient revenue. Making effective technology investments that support subscription-based billing and patient engagement, and realigning RCM staff toward complex service lines like inpatient and specialty care are also necessary.

Alleviating Uncompensated Care

"As out-of-pocket costs for consumers have grown, given the growth of HDHPs, providers are much more at risk for nonpayment," said Rick Gundling, Senior Vice President at the Healthcare Financial Management Association (HFMA) and a former CFO.

With incoming Medicaid cuts, every CFO is stressed about uncompensated care, especially those at smaller and rural systems. In rural and safety-net hospitals, where bad debt from delayed or deferred care runs high, DPC could offer a proactive solution.

"By offering affordable, transparent flat fees—often well below high insurance-plan deductibles—DPC can encourage timely primary care," says Prasad. This shift could even prevent downstream ER overutilization and reduce costly acute episodes.

For hospitals, this creates an opportunity to reshape service distribution, as many routine visits become ‘in‐house’ subscription services, therefore easing uncompensated care burdens, according to Prasad.

To zoom in on this connection to community ER utilization, CFOs can work with their teams to analyze ER utilization data to identify patients who could be better served through a DPC option. If the model seems viable for their health system, CFOs can then pilot hybrid DPC programs alongside existing coverage models in high-need communities. Lastly, to determine the ROI of these programs, CFOs can quantify savings from reduced ER volume and reallocate resources to population health programs.

DPC may not replace traditional billing models systemwide, but for CFOs seeking financial predictability, to lower bad debt, and create leaner RCM operations, it presents a compelling strategy.

Check back on Monday for Part 2 where we’ll dive into the risks, regulations and patient expectations around direct primary care models, as well as the imperatives of ethics and trust in implementation.