A growing primary-care physician shortage combined with an increase in primary-care visits generated by the Affordable Care Act has some physicians here, such as Dr. Cody Ellefsen, looking at an alternative business model, called direct primary care.

In April, Ellefsen opened his own primary care practice, called Alliance Primary Health Care, based on the DPC model. He is the practice’s sole employee, operating out of exam rooms in the same building as the Neuropath NW Health & Wellness Center, located at 203 E. Dalke, near Providence Holy Family Hospital on Spokane’s North Side.  

Direct primary care practices charge patients a monthly fee, or retainer, which covers all or most primary care services. 

“This type of practice is a cost-effective, ACA-compliant option for health care access for patients or businesses looking to decrease their current cost of health care,” says Ellefsen. “We don’t deal with insurance. Rather, we contract directly with the patient or an employer for patient care.”

Ellefsen says Alliance’s retainer covers preventive care, chronic disease management, annual physicals, urgent care, and simple procedures. 

“I share some equipment with another clinic in that same space, but essentially it’s just me, no other employees,” he says. 

Alliance’s monthly membership fee per adult is $65. Children are $10 per month, per child with one enrolled parent, or $25 if enrolled as an individual. The maximum membership fee is $150 for a family. 

Membership isn’t tax deductible, as the retainer fee isn’t yet defined as a medical expense in most states. However, medication or lab expenses through the clinic may be reimbursed through a health savings account plan.

 Because some services aren’t covered by a retainer, DPC practices such as Alliance usually suggest patients buy a high-deductible policy to cover emergencies. 

“Emergencies would be things like fractures, heart attacks, or stroke,” says Ellefsen. “For those types of things, I can provide an evaluation and forward the patient to emergency if necessary.”

Alliance also offers to assist patients looking for affordable insurance providers. 

“I work with an insurance agent who is familiar with the DPC model, who can help patients change their insurance or get set up with affordable options to partner with the model,” says Ellefsen. 

Patients covered through Medicare also can join Alliance, as long as they sign a waiver declaring neither they nor Ellefsen will bill Medicare directly for any services. Medicare still will cover any laboratory testing, imaging, medications, or hospitalizations prescribed by Alliance’s office, Ellefsen says.

So far, Ellefsen says, he has kept Alliance’s membership small, with only about 600 patients.

“There are a few hybrid practices in that area that offer direct care options,” says Ellefsen. “However there is only one other I know of that is a dedicated primary care practice.”

Dr. Donald F. Condon, a Spokane-based primary care physician in practice for more than 35 years, told the Journal last November that he planned to transition in January of this year to a new business model offering Spokane patients primary health care for a flat annual fee of $1,350 to $1,500, rather than billing insurance companies for care.

Ellefsen is a Spokane-area native who earned a bachelor’s degree in sports medicine from Brigham Young University. From there, he attended the Arizona College of Osteopathic Medicine, completing his internship and residency at Family Medicine Spokane in 2009. Prior to starting his own practice, Ellefsen was part of a traditional primary care practice with Columbia Medical Associates in north Spokane, which he says employed four providers and 8 to 10 additional office staff at that location. 

Ellefsen says he feels direct primary-care practices appeal to patients because they are convenient and affordable.

“Patients with access to good primary care go to the emergency room less, and have more time with their physician,” he says. This type of practice most benefits small businesses and patients who are paying out of pocket for private insurance, he says.

Ellefsen says he spends about an hour with new patients on their first visit and averages 30 minutes per visit with most established patients. 

“I’m only in the office when I have patients to be seen, and I don’t take walk-ins,” he says. “Most direct primary-care practices see one patient per hundred in their patient panel per day.”

Ellefsen claims businesses also save money by sponsoring their employees. 

“In my model, by covering their employees, businesses can lower their costs by up to 3o percent,” he asserts.

Ellefsen says Alliance also partners with a pharmaceutical distributor to save patients money on prescriptions and has a contract with Quest Diagnostics for reduced lab work fees. 

“I have had patients save enough money in prescriptions to cover their membership fees,” he says. 

Ellefsen says it was partly frustration with the traditional model of fee-for-service insurance billing that got him thinking about starting his own practice based on direct primary care.

 “I was extremely busy, working through lunch and taking home work at night,” Ellefsen says. “My patients barely had any access to me, and that began to lose its appeal.”

This past March, the Association of American Medical Colleges predicted a significant shortage in primary-care physicians and an overall shortage of physicians by 2025.