Episode 25: The “Netflix Meets Costco” of Primary Care

How would you benefit if your relationship with your doctor was described as “Netflix meets Costco?” Direct Primary Care, or DPC, is a new way of providing primary care that is making good on its promise to help people stay healthier and spend less on healthcare. Dr. Kirby Farnsworth, owner of Simply Direct Health, shares the story of what attracted him to choose DPC over traditional primary care models, how he can provide many medications at or near cost, and why referring physicians love it just as much as patients.


DPC Frontier Mapper – Map of locations of more than 1,200 direct primary care (DPC) practices across 48 states plus Washington, DC: www.dpcfrontier.com/mapper

Simply Direct Health: www.simplydirecthealth.com

Learn more about Direct Primary Care: www.dpcfrontier.com/defined

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Full Transcript

Announcer: It’s time to think differently about healthcare, but how do we keep up? The days of yesterday’s medicine are long gone, and we’re left trying to figure out where to go from here. With all the talk about politics and technology, it can be easy to forget that healthcare is still all about humans, and many of those humans have unbelievable stories to tell.

Here, we leave the policy debates to the other guys and focus instead on the people and ideas that are changing the way we address our health. It’s time to navigate the new landscape of healthcare together, and here’s some amazing stories along the way. Ready for a breath of fresh air? It’s time for your paradigm shift.

Michael: Welcome to the “Paradigm Shift of Health Care” and thank you for listening. I’m Michael Roberts here today with co-host, Jared Johnson and Scott Zeitzer. On today’s episode we’re talking with Dr. Kirby Farnsworth, owner of Simply Direct Health, a direct primary care practice in Peoria, Arizona. Dr. Farnsworth, thank you so much for coming on the show today.

Dr. Farnsworth: Hey, you’re welcome. I’m happy to be here.

Jared: So Dr. Farnsworth, as I’m still learning and experiencing direct primary care, DPC, there’s a couple things I think that stand out just right off the bat to me, and one of them is directly, actually on your website, the way you describe it, which I like this and we can get into this at different parts of the conversation. But there’s a part where you say, “We pride ourselves by not accepting copays. Most in-house procedures are free of charge, at cost medication, labs, and imaging, and extended visits as long as your visit requires.” So this pretty much sounds like, maybe, a patient’s dream in some ways.

So I think we wanna get into just DPC in general, but you have an interesting story yourself. You’re a few years into your journey of opening and managing a DPC practice itself. So what if we wanna kind of start there in terms of telling us the story of how you chose to pursue DPC over other care models?

Dr. Farnsworth: Absolutely. I think a little background with me, I was trained in Vegas, did my medical school there, and then I was…I did my residency over in Houston and I’ve been here in the greater Phoenix area so for about three, three and a half years now. During my early days at Medicare, I wanted to be a family medicine doc and kind of outpatient medicine was really my passion. And it was something I spent about 10 minutes inside the operating room and knew there’s no way on this planet I was ever gonna be a surgeon. It just wasn’t for me.

So when I learned that I wanted to do primary care in an outpatient setting, I really tried to find opportunities early on as to different types of primary care settings. So there’s your conventional run on the mill kinda factory based practice, there’s the concierge practice that’s kind of a high end, there’s urgent care, there’s kinda everything in between. So I was really trying to get a feel of what felt like the right way for me to do primary care.

Defining Direct Primary Care as Compared to Concierge Medicine

Dr. Farnsworth: I spent a little bit of time with the concierge docs and I really, really liked what they were doing because they had so much more time with their patients, and time is a key to all of this. I think time is the key that made me flip, that made me open a direct primary care. I figured it was all about time, time with patients, less time with the administrative haggles and hassles, time with being able to work through problems together. And I really wanted to focus on the time.

However, in a concierge practice, there’s certain populations that are unable to achieve that. And so I was trying to find a goal to take care of the masses and give them time. And that became a huge problem for me to find something that was sustainable to do that. And I figured I had to go back and look. So during my training and residency, I’d be seeing 10, and 12, and 15 patients in a half a day. So 20 and 30 patients a day up to 40 at times, and I couldn’t get any meaningful information or discussion into patients to promote change and to help them take care of themselves. So I was bound, I was stuck, and there’s nothing that I could do as far as the inefficiencies of the system. They prevented me from taking care of people the way that I wanted to.

So there had to be another solution, there had to be another way, and as I look back on things it was all about being inefficient. In an outpatient setting there’s two or three employees that are chasing bills, there’s two or three employees in the front office, there’s two or three employees, there’s MAs in the back office taking vitals. Sometimes there’s a scribe that you’re working with to try to move the documentation along, there’s an IT support, there’s 20-plus staff members in an outpatient office, and all that boiled into overhead and inefficiencies. So this concept of direct primary care is basically to remove all of that.

And if you think about it for a minute, it makes a ton of sense. There’s tons of data, there’s tons of information out there that says the average face-to-face encounter with a doctor is about seven minutes, which is ludicrous, in my opinion. I think for us to promote change and to really get people healthy, we need to spend more time with them. But due to this inefficiency or due to this problem that I was seeing, I knew that I couldn’t sustain it. I couldn’t do this in the real world, I couldn’t do this for the next 40 years of my life. There’s no way that I could keep doing this, seeing all these inefficiencies in the healthcare system.

So when I removed myself, kind of thought outside the box in primary care and said, “What are these regulations are holding me back?” I found that most of them were insurance-based, and because of that I said, “Well, what about not using insurance? If these are the regulatory mechanisms in primary care, what if I just remove myself from insurance?” And I opened this concept of direct primary care. Quite simply put, it’s a membership-based model of healthcare where people pay a fixed monthly fee for the membership of coming to my office. Yeah. Fee ranges between $15 and $85 depending on age, and that includes all visits, in-house diagnostics, telecommunications, emails, text messages, phone calls, and also gives you access to wholesale discounts for things like labs, medications, and imaging.

The easiest way to explain that in layman’s terms would probably be a cross between Netflix and Costco. Netflix is that recurring membership fee where sometimes you binge watch, sometimes you forget you have the account, and Costco being a membership-based to give you access to wholesale discounts. So the pairing of those two together is sort of how we’ve converted this model into direct primary care. And we’ve been at it for three-plus years now here in the greater Phoenix area. Really love it. It’s been really, really eye-opening for a lot of people, and our patients are wowed, and it allows us to do the things that we want to. So we really enjoy it. It’s been great.

Benefits to the Provider

Jared: So have you benefited as a provider in the ways that you expected?

Dr. Farnsworth: Absolutely. I think ultimately the biggest keys for me in my office are twofold. One, I can see…I schedule two patients for about an hour, sometimes 45 minutes depending on their issue or complaint, but hour-long appointments. And minimal to no wait time are not only patient satisfaction, but also provider satisfaction. We were able complete a thorough plan of care and actually, in turn, honestly, it allows patients to be seen less frequently because we’re able to take care of multiple issues simultaneously.

And it really gives me a little bit of power back to take care of people not being regulated by prior authorizations or other insurance approvals, or I can practice the way that I feel like I need to and the way that my patients need me to not dependent on a third-party who may or may not know me or my patient. So that benefit has been extremely rewarding and it allows me to set my own schedule, which is the all-powerful entrepreneur goal of a lot of us is that it allows quite a bit of flexibility and it does allow me to care for people the way that I feel like they need to be.

Benefits to the Patient

Jared: Tell us a little bit more about that last part, about taking care of patients the way they need to be and want to be. What are some of the things you’ve noticed like, how patients benefited? And how have you been able to care for them in different ways being a DPC clinic versus some other care model?

Dr. Farnsworth: Good question. I think, for example, when a 5-year-old comes in with an ear infection, extremely common and happens all the time. We actually carry medication in our office, and the medication costs us about $2. So we, in turn, offer that cost savings to the patient. So not only is mom and her three kids, and everybody else looking around, trying to get to my office, but now we can buy this at the pharmacy because we have that medication here in the office. And it’s about 60% cheaper than you get at the pharmacy. So just a very, very simple thing of saving mom a trip is very rewarding on a patient’s behalf. The fact that we still do a little bit of kind of intense care management things like fracture induction, cast management, suturing, biopsies, and those type of procedures, it’s really amazing to see some of the cost savings for patients.

I have a lady that actually is coming in later this afternoon for a skin removal for a skin cancer. Welcome to Phoenix. There’s plenty of sunshine and there’s plenty of skin cancer. She was getting quoted $1,400 from a dermatologist to do the same procedure that we’re gonna do for the pathology included for $60. So to see her save for $1,340 is actually rewarding for me. I think it’s a problem, stereotype, or a stigma, or something out there that healthcare is supposed to be this expensive burden and this problem out there, I think it’s been discussed politically on many different fronts.

And I probably don’t wanna go down that rabbit hole very far, but I can go down a little ways. But this idea that healthcare doesn’t have to be expensive, I think, is so rewarding for patients. They understand that they can come in multiple times for any reason if they feel like they need to, they’ve got somebody on their team, they’ve got somebody in their back pocket, they can text me anytime, they can call and leave messages, and email, communicate, they can get that care that they need to without having to deal with all the other obstacles, such as getting out of work or many different copays in the previous system, or prior authorizations, or their insurance company won’t cover the medicine, or any other procedure that they were able to do on our office that they’d have to be referred out to.

Direct Primary Care Across the U.S.

Michael: Absolutely. Dr. Farnsworth, could you tell us a bit more, I guess, about direct primary care just as a care model kind of across the country? It’s really interesting hearing about how well it seems to be working for you and for your patients, but how much is this idea catching on across the country? Like, we’re based out of New Orleans and, you know, I’m not even aware if we have DPC providers available in our market.

Dr. Farnsworth: Yeah. It’s a relatively new-er movement that is catching fire like crazy. There’s about 1,200 to 1,600 clinics that function this way. The general premise again as a direct primary care concept is that you directly contract with your patients rather than a third-party insurance administrator or something along that line. So this idea is primary care, if we think about 40 years ago before Medicare and even the early phases of insurance, the insurance companies were used… Why do we have insurance? What’s the purpose of not only health insurance, but car insurance or homeowners insurance? It’s to help reduce your risk, it’s a risk mitigation tool for catastrophic events, right? You have your car insurance so that when you get an accident, you have something to cover it, but your car insurance doesn’t pay for your gas or your oil change.

Scott: Correct.

Dr. Farnsworth: Homeowners insurance doesn’t pay to wipe your windows or else it will be super expensive, and we feel, I feel that health insurance is very, very similar. In health insurance, it doesn’t cost me but $1.10 to diagnose someone with strep throat. So why are we paying a premium for a low cost event? For somebody with diabetes, the number one medication that’s prescribed is called Metformin. It costs less than a penny a pill. So for 30 cents a month, why are we paying a high premium for..? Why are we insuring a low risk event?

Now, if you got an appendicitis or if you need a heart surgery, or something like that, sure, that’s why we have this idea of insurance. But I think, over the last 40 years, health insurance has kind of been swallowed up into this covering all health care needs. And so this idea of direct primary care has really taken off in the basic primary care needs because we, as primary care docs, can confidently take care about 70% of what comes into our office. So now if we’re able to do that, it does really lights people’s fire across the country. There’s, like I said, 1,200 to 1,600 of us that say, “Hey, I can take care of 70% of what I need. I don’t have to do with the insurance. Sign me up.”

Scott: Yeah. It’s an interesting thought, that 70%. So I’m assuming that you expect your patients to still have insurance, it would just be a different type of healthcare insurance.

Dr. Farnsworth: That’s the idea. Absolutely. Isn’t it? We hope they don’t ever have to use it just like you hope you don’t have to use your car insurance. “I hope I never have to use my car insurance. I hope I never have to use my health insurance.” But these catastrophic type plans, whether it’s a short-term indemnity plan, a short-term insurance plan, something like one of the other markets out there. I don’t know if I can say that on podcast, but health sharing plans are… There’s all kinds of alternatives to the conventional insurance-based, but definitely high deductible premium, high deductible health plans make the most sense, where, if you got a $6,500 deductible, the odds of you using that in a calendar year are about 3% to 5%, and the odds of using that in a 5-year are even less or a little bit more. But the idea is that you have $6,500 deductible, why not use whatever you can in a primary care setting to prevent that chance, that potential of happening?

Jared: That does lead to kinda what we’re talking about next is the goal with DPC is to incentivize to keep people healthy. That’s what everybody’s hoping for around this. I’ve even had some conversations with other folks talking about, you know, I think a lot of people don’t think of primary care necessarily as the way to achieve that, and so they’re looking to health coaches or they’re looking to whatever other kinds of systems. But direct primary care sounds like it can fill a need that we aren’t used to receiving anymore, aren’t used to seeing fulfilled anymore. So how effective do you think that DPC is at solving this need of keeping patients healthy in general?

Dr. Farnsworth: Well, I think as you… Again, I spent quite a bit of time in some of the research data points as far as epidemiology and a bunch of those types of journals that talk about how why aren’t patients getting healthier. There’s quite a few different links and podcasts, and other resources that I’d be happy to share with you after the show. But ultimately, people who have a primary care doctor are four times less likely to die of premature causes. And that data is very well written, very well documented, supported. So the fact that you’ve got somebody on your team is in and of itself a huge risk mitigator as far as being healthy. There’s too often that people get shunted to urgent care after urgent care or an insurance plan changes, and so you have three different primary cares or the primary care doc only has two minutes with you and so says, “Hey, you have a cough. Go see a lung doctor. You have a toe, go see a toe doctor. You have a knee, go see a knee doctor.” And the referral system is completely broken because we’ve all been trained and taught in our training to take care of most of these conditions.

We just don’t have the time to do it. And so I think that this allows us to decrease our referrals which, again, lowers the burden, but also develop a trust and develop a relationship with our patients that they can call us for even the little things. Too often we see patients that have a cough, or a congestion, or some issue, a spot on their nose, or a rash, or something that they just wait until they’re either really, really, really sick or go to the ER as a last resort because of all the barriers that they have to get to primary care.

Scott: And…

Dr. Farnsworth: Direct primary care offers a great solution for that.

Scott: Yes. It’s interesting. I don’t know if there is a direct primary care in New Orleans. I ended up actually with a concierge doc. I’m lucky enough to be able to afford it. I remember walking into a GP’s office. I was dressed in a suit, I had my computer bag in my hand, and I’m being seen for the first time. So they’re taking my weight and my height. And they take my height and they’re taking my weight. And like I said, I’m fully dressed with a computer bag and I’m a geek. So I’ve got a computer in there, phone, an iPad.

And I looked at the young woman who is taking my weight and I said, “Are you trying to get my BMI, my body mass index right now?” And she said, “Yes.” And I said, “Well, should I not be holding all these stuff?” And she said, “It doesn’t matter.” And I was like, “All right.” Because I’m kinda like, “Is this the right place for me to be?” I end up in the doctor’s office and someone is taking my blood pressure. And I looked at this particular young lady and I said, “So are you a PA, an MA?” And she goes, “No, I’m the billing person.” And I said, “And you’re taking my blood pressure over, by the way, my suit?”

And so the doc finally comes in and I said, “Look, I don’t think this is gonna work.” I kinda re-went over all this. And I said, “I’m guessing that you’re paid by the patient and that you are essentially working for the hospital, and essentially you’re incentivized to see as many patients as possible. It’s just a guess on my part.” And he’ll ask and he goes, “Yes.” And I said, “So don’t you feel bad, you know, that you’re basing how I am on, you know, my BMI with the computer?” And he said, “You know, you look pretty healthy. So you should be fine,” which was the… This is the exact opposite of what you were just talking about where, “Hey, if I get to see you and talk to you, and I notice that your triglyceride numbers are a little off or whatever, I can sit and talk to you long enough to figure out that maybe you’re having a little bit Jewish pasta or maybe we need to be talking about some changes in eating habits, etc.,” rather than simply saying, “You should go see somebody. You should go see a diabetes specialist.”

Dr. Farnsworth: Absolutely.

Scott: How does it work when you’ve got to refer someone to that specialist? Is that a better hand off to the…you know, from you to say an orthopod? Let’s say you’ve been taking care of a patient for a while, perhaps giving them some sort of nonsteroidal anti-inflammatories, maybe a cortisone injection, etc., you know, at what point… How do you make that decision either to do the referral to, say, a rheumatologist and an orthopod? Just to use that as one path.

Dr. Farnsworth: Yeah. Well, a couple of pretty straightforward examples, I mean, that you give. There’s one…I mean, just two weeks ago what we’ve done is… He had bad knees, had bad knees for a while. We know that he had bad knees. He’s kinda milking all the knees that he could get. So we ended up doing some interventions, some steroid injections, also some PRP, some of that platelet-rich plasma, we’ve done some therapy modalities and weight loss discussion. And we’ve done pretty much the physical therapy assessments up until the point where, you know, we’ve exhausted all of our resources. So at that point we said, I said, “All right. This is the discussion. This is where we’re at the timeline.”

I was able to contact the orthopedist personally and I reached out to their office. He called me back. We communicated, told them about who’s coming and this is what we’ve done, this it what we’ve tried, and this is what we need to do. I had a plan for him and they said, “All right. Well, before he gets here I need you to do these,” preoperative things that we can do, EKGs. They’re included in our membership. Sometimes x-rays, repeat x-rays. We have contracts in the local community to offer x-rays for $40 cash and also lab work. For example, some bleeding…make sure they’re not anemic or make sure there’s not any bleeding disorders. We got those for the patient for about $12 that otherwise would have cost them about $150. So we had kinda tuned up the patient for his referral and so when the actual surgery did happen, he followed up with me about three days later and would follow definitely close the communication loop or sometimes they get lost in the mix.

I think the fact that we don’t refer necessarily as much for some of those needs that we’re able to track down our referrals and follow up with how things went on a much more efficient basis, and we’re able to get a lot of things done preemptively at an extreme cost savings so the patient didn’t have to go multiple visits to get the preoperative clearance that they were looking for.

In rheumatology, for example, lots and lots of blood tests. If you go to a rheumatologist, they’re gonna order a slew of blood test because of all these different autoimmune conditions that exist that could cause arthritic pains and joint pains, and muscle pains, and all the other pains that we experience. And again, our labs are about 60% to 80% discounted from a conventional cash rate because we do direct client billing, which is a different conversation that we can have if you’d like.

It’s streamlined a lot of those lab evaluations and saved multiple visits from a specialist. So, essentially, we tune up the patient for a referral, send them to the referral, and then we take care of them after the referral. It’s not send you to the orthopedist and follow up with them indefinitely or send you to a rheumatologist and follow up with them indefinitely. It’s a pointed effort where we can get them back in our clinic as soon as we can to take care of the…

Scott: Dr. Farnsworth, it’s funny, you know, when you do a podcast and everybody is listening to this, you would not see Michael and I shaking our heads at each other when you were quoting these prices of 12 bucks, 5 bucks, whatever, for all these tests that, obviously, need to take place. But all of us as patients realize like, there’s no way, you know, that a Tylenol would cost this much money, you know. Anybody who has ever seen a hospital bill and you could see like, acetaminophen, 325 milligrams, $25, and it’s like, “How did that happen?” It’s like, “Well…”

So I’m just fascinated by this and I’m actually heartened to know that, like, I’m literally in my own head gone, I wonder if there’s any direct primary care people in New Orleans and then I’ve got family in Tucson. I wonder if there’s a DPC out there in Tucson because it’s…

Dr. Farnsworth: There are both. There’s a map that has a list of all 1,200 of us. It’s called the dpcfrontier.com/mapper. Dr. Phil Eskew put that together about six years ago and it’s being added to on a daily basis.

Scott: You know, we’ll put that link in there, you know, on our podcast page so that people can take a look at that. There’s a lot of different modalities to take better care. There are a lot of different ways that we’re all attacking this, and this certainly seems like a way that this could work very, very well. It seems nuance to me. What’s the difference between, say, a “concierge” style doc and a DPC, direct primary care doc?

Dr. Farnsworth: I think Dr. Ryan Newhoff [SP] probably said it best. He refers himself as the concierge for the masses. The concept of concierge medicine routinely includes a one-time rather large fee to buy in to the practice, so to speak, and most concierge docs will still process insurance claims. And that’s a big part of the difference between that and a direct primary care. Well, their numbers are still somewhat low. So you can allow more time and availability for your provider, as well as for yourself. As a patient, the actual premise of direct primary care is the absolute opposite of concierge medicine in that respect. Our goal is cost savings and availability. The bulk of my patients, I’ve got over 600 in my office and I would say 75% of them make at the median or less per year based on where we’re at from a demographic standpoint.

So my counter to concierge medicine is on almost the antithesis. Well, we still have options for healthcare in that space and that’s great. I think with children’s rates at $15 a month, an adult’s rate is $65 to $85 a month, that, by definition, is the opposite of some of these concierge plans.

Michael: Absolutely. That’s really fascinating, Dr. Farnsworth. Thank you so much for being on the show. I feel that we could keep asking more questions for quite some time, but thank you again for being on the show. I think this is really fascinating. Just for all of us that were in healthcare, we get so siloed into, like, fulfilling a specific portion of that process that it’s really important for us to keep learning what the other aspects of healthcare are. So again, thank you for being on the show and for everybody that’s listening, thank you so much for your time today.

Dr. Farnsworth: Yeah. My pleasure. Thank you.

Announcer: Thanks again for tuning in to the “Paradigm Shift of Healthcare.” This program is brought to you by P3 Inbound, marketing for ortho, spine, and neuro practices. Subscribe on iTunes, Google Play, or anywhere you listen to podcasts.