“We Can Compete:” Direct Payment Models Present Opportunity for Independent Practices
By Emma Freer

Rising health care costs. Declining outcomes. Restricted patient access to care. Rampant consolidation. Incessant physician payment cuts. Excessive prior authorization. Creeping scope-of-practice attacks.  

Given symptoms like these, the prognosis for the U.S. health care industry often seems grim for physicians and their patients. But different payment models, including direct contracting and value-based care, provide a chance for independent physician practices to regain their place at the industry’s center, from which they can jumpstart the healing process. 

This was the take-home message of a three-person panel discussion, “Preparing Physicians for the Future,” during the Texas Medical Association’s Business of Medicine Conference, previously Fall Conference, on Oct. 5 in Austin. 

Houston anesthesiologist David Mackey, MD, opened the discussion, mapping the migration of surgical and procedural care from hospitals to ambulatory centers.  

“Hospitals, in a lot of ways, are outmoded,” he said. “They’re too inefficient. They’re too big.” 

This migration compounds other financial pressures – including administrative bloat, staffing shortages, inflation, and new price transparency requirements – bearing down on hospitals and exacerbating their risk of closure.  

But, as Dr. Mackey sees it, hospitals’ struggles could represent an opening for physician practices, which are more agile.  

“I don’t think we should be intimidated by hospitals and large integrated medical practices,” he said. “We can compete.”  

For instance, physician practices can consider alternate payment models, like direct contracting and value-based care, which Dr. Mackey said minimize interference from big insurance companies and reduce patient costs – a major consideration in an increasingly competitive health care market.  

“Private practice is … in ascent, not descent,” he said.  

Bud Brooks, chief development officer for Nomi Health, followed, delving into the appeal that direct contracting holds for self-insured employers – and the benefits such arrangements offer to physicians.  

Nomi Health, a direct health care company that derives its name from “No Middlemen,” seeks to establish a private marketplace between physicians and employers – without the cost-driving interference of big insurance companies.  

Mr. Brooks espoused the direct contracting model, which he described as a win-win-win, providing employers price transparency, freeing physicians from administrative hassles like prior authorization and managed care, and granting patients access at no out-of-pocket cost.  

Houston radiologist Cristin Dickerson, MD, closed the discussion by sharing her personal experience with direct contracting. Eager to remain independent and bring down costs for uninsured patients, Dr. Dickinson founded Green Imaging in 2011 to serve the members of self-insured employer groups and self-pay patients.  

“I’m still independent. My radiologists are independent,” she said. “It’s a great way to practice.” 

Dr. Dickerson expanded on different approaches to direct contracting, including subscription-based primary and chronic care models. Like value-based care, both approaches incentivize preventive care by providing physicians with steady – but fixed – payment for each patient subscriber. 

“You can be creative and find models to work in this new market,” she said.   

Private insurance, on the other hand, often leaves physicians chasing down payments that are less than their in-network contract rates. Instead, she said, practices might be surprised by the appetite for direct contracting from self-insured employers and patients, who often feel similarly underserved by their health plans.  

"We can take this [industry] back,” Dr. Dickerson said.  

Panel attendees can self-report earned CME credits from the event – 1.5 AMA PRA Category 1 Credits™, 1.5 ethics credits – on TMA’s website.  

Last Updated On

October 13, 2023

Originally Published On

October 10, 2023

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Emma Freer


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Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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