Nevada’s Direct Primary Care Crisis

In 2012, Turntable Health opened its doors in downtown Las Vegas with one goal—providing preventive healthcare at a reasonable cost. As a direct primary care (“DPC”) clinic, Turntable Health offered unlimited access to primary care physicians for a monthly fee. Only five years after opening, Turntable permanently closed in January 2017, citing an inability to reconcile its practice with the economic demands of the healthcare industry.  Following Turntable’s lead, an industry forerunner based out of Seattle, Qliance Medical Management, closed in May.  These closures leave medical professionals and patients in Nevada questioning DPC’s viability and, in consequence, its future.

While large-scale DPC providers like Turntable and Qliance are a relatively new concept, small DPC practices have existed for decades.  Under the DPC practice model, physicians offer contracts that allow patients to pay low monthly fees for unlimited access to primary care services, discounted blood work, and prescriptions.  However, DPC memberships do not cover all healthcare needs, including costly hospitalizations, specialist visits, and surgery. For that reason, providers suggest—and federal law requires—that patients hold, at a minimum, high-deductible health plans.  Rather than a standalone healthcare solution, a DPC membership is one part of a comprehensive health plan that encourages patients to build physician relationships and seek preventative care.

Though Turntable Health and Qliance identified themselves as DPC providers, their business plans arguably strayed from standard DPC practices, which are traditionally structured to minimize overhead expenses and focus on quality over quantity, with one to two physicians generally serving under one thousand patients. In contrast, Turntable sought to serve 5,000 clients and provide additional amenities such as yoga, cooking classes, and group therapy, whereas Qliance spread its services over 25 clinics and 13,000 members.  Although not specifically identifying the economic obstacles that led to their closures, Turntable’s and Qliance’s divergence from the traditional DPC model ultimately proved to be unsustainable in Nevada.

As evidenced by Senate Bill 208 (“S.B. 208”), which was proposed during Nevada’s 2017 legislative session, some DPC advocates believe that government regulation creates unreasonable financial challenges—like those Turntable and Qliance may have experienced. To illustrate, under the Affordable Care Act, DPC memberships qualify as primary care services, not health insurance plans.  Therefore, to avoid tax penalties, patients must carry health insurance in addition to their DPC memberships.  Presented as a mechanism to reduce healthcare costs, S.B. 208 stated that DPC membership should fall outside Nevada’s insurance regulation code and defined DPC memberships as healthcare plans.  In theory, S.B. 208 would have freed DPC physicians and patients from state regulation and allowed members to carry cheaper health insurance policies—including catastrophic healthcare plans, which the ACA currently prohibits due to high deductibles, which range from ten to thirty thousand dollars. Ultimately, S.B. 208 gained little traction during this year’s session and died in committee.  In light of the recent closures of Turntable and Qliance as well as ongoing financial constraints facing patients in need of medical care, the Nevada Legislature may revisit the economic issues facing DPC providers during the next legislative session.

Although the recent closures of Turntable and Qliance reduced DPC alternatives, DPC providers such as MedLion Direct Primary Care continue to provide services to Nevada residents.  By contracting with small physician practices, minimizing overhead expenses, and providing quality care, providers believe that DPC will remain a viable option for patients who desire preventative care and expanded access to physicians.  The economic difficulties encountered by Turntable and Qliance, however, serve as a cautionary tale for existing providers and will likely influence the expansion of DPC practices and the range of services they choose to provide.