Why more clinics are choosing a concierge or direct primary care model
When considering the rising cost of healthcare—including increasing monthly premiums, copays, and deductibles—it can be surprising to learn that some primary care clinics are now asking patients to pay a monthly membership fee. The primary reason many clinics are adopting this model is due to rising costs of care coupled with decreasing insurance reimbursement.
The Gist:
Healthcare is getting more expensive, and insurance companies are paying clinics less money than before. Clinics have many costs, like paying staff, buying supplies, and keeping the office running. Even though insurance is supposed to pay most of the visit, clinics often do not get the full payment—or any payment at all. This lack of payment is also affecting patients, as doctors may have to see more patients each day, leading to shorter visits and less time to talk. Patients with certain insurance types may also have to wait months to be seen, making it harder to stay healthy and manage medical problems. Ultimately, these financial challenges are pushing clinics to find alternative ways to stay open and make ends meet.
Worth The Read:
The Insurance Submission Process
When determining the cost of a single office visit, there are three primary components that must be considered:
The work itself: This includes the provider’s time, effort, and medical decision-making involved in the visit.
Practice expenses: These are the costs associated with running a clinic, including equipment (exam tables, otoscopes, blood pressure cuffs), disposable supplies (gloves, wipes, exam table paper), rent, staff salaries, utilities, internet, and the electronic medical record system.
Malpractice insurance: The cost required to maintain appropriate liability coverage.
Each office visit is assigned a “fee schedule,” which is the amount a clinic requests from insurance companies to cover these costs. The price varies depending on the type of visit—for example, an annual physical differs from managing chronic conditions like diabetes or hypertension, which also differ from treating an acute issue such as an ear infection.
For many insurance plans, the expectation is that insurance will cover approximately 80% of the visit cost, while the patient is responsible for the remaining 20%. However, that 80% is not guaranteed to be paid to the clinic. In some cases, only a portion is reimbursed—or none at all. Increasingly, insurance companies are denying claims and requiring clinics to submit appeals, which involves revising documentation and resubmitting billing in hopes of receiving payment.
This process has become the norm rather than the exception, often requiring multiple rounds of denials and appeals before any reimbursement is received. Even after this effort, it is common for claims to remain unpaid. In these cases, clinics must either bill the patient for the outstanding balance or, more commonly, accept the loss of payment.
The billing process itself has also become increasingly complex. Insurance companies use different billing and diagnosis codes, maintain varying documentation requirements, and may even use automated systems to review claims. Even when providers submit accurate and appropriate diagnoses, claims may still be denied. Navigating these requirements—while ensuring proper documentation and resubmitting claims—is both time-consuming and frustrating, especially when only a small portion of the requested payment is ultimately reimbursed.
The Financial Burden To Medical Practices
According to the American Medical Association (AMA), in the 20 years between 2001 and 2021 physician payment rates increased by only 11%, while medical practice expenses rose by 39% during that same time period. More recently, in 2025 Medicare reduced reimbursement rates by an additional 2.8% despite ongoing inflation and rising operational costs. That same year, the inflation rate increased by 2.7%, resulting in nearly a 5% financial loss for healthcare clinics while performing the same work.
Healthcare workers have been advocating for change for years. Rep. Greg Murphy, MD (R–North Carolina), has noted that caring for patients with Medicare and state-funded insurance is often done out of compassion rather than financial benefit. This is a short clip of him in 2024 discussing the cost of care prior to the additional insurance reimbursement cuts in 2025.
https://www.youtube.com/watch?v=inUrkiP5Aps
As Medicare and Medicaid adjust reimbursement rates, private insurance companies often follow suit, adopting similar changes over time. As a result, reductions in reimbursement extend across the broader healthcare system.
With the continued rise in operational costs and ongoing decreases in reimbursement, it is becoming increasingly difficult for primary care clinics to remain financially sustainable. This financial strain has forced many practices to close or seek alternative revenue models. As a result, some clinics have transitioned to membership-based care models.
This shift is not driven by greed—it is driven by the need for sustainability and survival within an increasingly challenging healthcare environment.
Burden To The Patient
Patients are noticing the impact of these changes in the quality of care they receive. Many report that office visits feel significantly shorter. Clinics have found that seeing more patients in a day can help offset financial losses from lower insurance reimbursement. For example, if the goal is to generate $500 in a day to cover the cost of providing care, it may have previously required seeing 10 patients. With declining reimbursement, providers may now need to see double or even triple that volume to meet the same goal. This inevitably leads to less time spent with each patient.
Communication has also been affected. Patients often report delays when calling or messaging their clinic, sometimes waiting days or even weeks for a response, if they receive one at all. This is largely because services such as phone calls and patient portal messages (e.g., MyChart) are typically not reimbursed by insurance and therefore may not be prioritized. Additionally, providers are spending increasing amounts of time managing insurance appeals, which further reduces the time available to respond to patients.In the past, clinics often limited the number of patients with certain insurance plans due to historically low reimbursement rates. Now, the situation has become more restrictive. Not only are some clinics unable to accept certain insurance plans—further limiting access to care—but many are also reducing how frequently they can see these patients. There used to be no cap on the number of these patients seen per day, but that is no longer the case. In order to keep up with the financial losses associated with these plans, clinics may only be able to see one patient with a particular insurance per day. This means that patients may not be able to get in for an appointment for more than six months, leading to poorer health outcomes. Many of my medically complex patients require visits once a month or every three months to keep their conditions stable. If they have the “wrong” insurance, this may mean they are only seen once or twice per year. Ultimately, this increases the risk of negative health outcomes for the patient.
In the past, clinics often limited the number of patients with certain insurance plans due to historically low reimbursement rates. Now, the situation has become more restrictive. Not only are some clinics unable to accept certain insurance plans—further limiting access to care—but many are also reducing how frequently they can see these patients. There used to be no cap on the number of these patients seen per day, but that is no longer the case. In order to keep up with the financial losses associated with these plans, clinics may only be able to see one patient with a particular insurance per day. This means that patients may not be able to get in for an appointment for more than six months, leading to poorer health outcomes. Many of my medically complex patients require visits once a month or every three months to keep their conditions stable. If they have the “wrong” insurance, this may mean they are only seen once or twice per year. Ultimately, this increases the risk of negative health outcomes for the patient.
Ultimately, as healthcare costs rise and insurance payments fall, clinics are struggling to stay open, and patients are feeling the effects through shorter visits, delayed responses, and limited access to care. This discrepancy is forcing clinics to find new ways to stay open, including charging monthly fees.
