I’m going to say something controversial: the DPC community’s obsession with “purity” is missing the point. After two decades designing health care financial models, negotiating payer & vendor contracts, and building compliance frameworks, I’ve learned that most alternative payment models don’t fail because they’re impure. They fail because someone forgot to do the math.
When $1 million can’t save a bad idea
The University of Houston medical school launched a direct primary care (DPC) clinic in 2021 with a $1 million grant. Thirteen months later, it was gone. The post-mortem focused on “purity,” whether it was really DPC, whether the physicians had autonomy, and whether the model was compromised by bureaucracy.
Here’s what no one asked: why put a membership-based practice in a heavily Medicaid and uninsured area? A basic financial model would have revealed this before they spent their first dollar:
- Sustainable DPC revenue: $75-$100 per member per month
- Sliding fee in low-income areas: ~$25-$30 per month
- Resulting gap: ~70 percent revenue deficit
You can have the purest DPC model in the world, but if your target population can’t afford membership fees, your model will fail. Not because of ideology, but because of arithmetic. That community didn’t need a DPC clinic. It needed an FQHC with grant funding and sliding-scale fees. The failure wasn’t philosophical; it was a fundamental market mismatch any operational strategist could have flagged in week one.
A peer-reviewed study later published in The Journal of the American Board of Family Medicine confirmed what many overlooked. The University of Houston’s academic DPC clinic did reach socially vulnerable patients, but it ultimately closed due to inflation, staffing ratios, and the inability to secure employer-based partnerships, not because of ideology. The authors explicitly noted that financial sustainability, not philosophical purity, determined the outcome. In other words, the numbers, not the narrative, ended the clinic.
When practices fail due to inadequate capital, poor market fit, or lack of operational planning, the solution isn’t more ideological commitment. It’s providing the financial modeling, compliance frameworks, and strategic expertise that address those gaps.
The narrative that doesn’t hold up
Some in the DPC community often insist that “institutions and health systems can’t do DPC right.”
Really? Let’s look at the data.
CHI Health, part of one of the largest nonprofit systems in the country, launched a pure DPC program in 2017. Eight years later, they operate six locations serving 5,000 members with 20 percent lower costs than PPO plans and higher satisfaction scores. Johns Hopkins runs multiple alternative payment models simultaneously: a concierge program, an employee DPC plan, and a high-risk primary care program that cut emergency visits by 60 percent and saved $11 million.
The difference between Houston’s failure and CHI Health’s success wasn’t ideology. It was matching the model to a market that could sustain it.
Why compliance matters, and why it doesn’t
I get brought into physician conversations because attorneys can tell you what’s legally permissible, but not what’s operationally sustainable. That’s where compliance meets reality.
Take state DPC laws. More than 30 states have legislation defining direct primary care. In Texas, the statute explicitly prohibits billing insurance while operating as DPC. If you want to charge membership fees and bill insurance in Texas, you’re not running “hybrid DPC”; you’re running a concierge practice.
The distinction isn’t philosophical; it’s legal.
When a physician says they want a “hybrid DPC,” my consulting process starts with fundamentals: Does your state have DPC legislation? If so, what does it permit? Then the strategic question: Is this a 12-month transition to pure DPC with a clear exit from insurance, or a permanent dual-revenue model? Those aren’t philosophical questions; they’re compliance and operational necessities. The answers determine everything from what you can legally call your practice to how you structure member agreements.
Too often, physicians agonize over whether their model is “pure” enough for the DPC community while ignoring the actual compliance risks that could shut them down. They debate philosophy while missing Stark Law implications, fee-splitting rules, and anti-kickback exposure.
When legal doesn’t mean smart
A physician once asked me to review a wellness program where he wanted to be the sole provider authorizing all prescriptions, rather than having the nurse practitioners also prescribe. His attorneys told him this was legal.
During our consultation, I asked about the types of medications. When he mentioned they were compounded prescriptions, I had a different concern: “Let’s take a look at the volume projections.”
After reviewing the logs and projections, the issue became clear. When one provider signs off on hundreds of compounded prescriptions per month, that pattern eventually flags regulatory attention, regardless of legality.
Legal doesn’t always mean smart.
That’s operational compliance, building something that can withstand scrutiny, scale sustainably, and survive in the real world.
What actually works
Here’s what two decades in health care operations have taught me:
- Pure DPC works: When the market can afford membership fees.
- Concierge medicine works: For patients who want premium access and can pay $4,000-$10,000 annually on top of insurance.
- 12-month transition models work: When physicians are committed to going pure DPC (with membership growth targets, payer exits, and clear accountability).
- Indefinite hybrids fail: Because they lack commitment, communication, and direction.
- Market mismatches always fail: No matter how pure your model or perfect your compliance.
You cannot subscription-model your way out of poverty.
The real conversation we should be having
Instead of arguing about purity, let’s talk about execution.
Instead of dismissing institutional models, let’s study what makes CHI Health successful.
Instead of assuming hybrid means uncommitted, let’s distinguish between bridges with clear endpoints and permanent fence-sitting.
The DPC market is projected to grow from $59.5 billion in 2024 to $92.9 billion by 2034. Employers are exploring direct contracting. Over 2,600 DPC practices are operating nationwide. The movement is scaling, and it’s time for the conversation to scale with it.
The best idea in the world fails if it’s built on bad math or blind ideology.
The rules of medicine shouldn’t confine innovation, but neither should ideology blind us to operational reality.
Dana Y. Lujan is a health care strategist and operator with more than twenty years of experience across payers, providers, and health systems. She is the founder of Wellthlinks, a consulting firm that helps employers and providers redesign care models through concierge and direct primary care. Lujan has led multi-state network development, payer contracting, financial modeling, and compliance initiatives that strengthen provider sustainability and employer value. She previously served as president of the Nevada chapter of HFMA and is pursuing a JD to expand her expertise in health care law and compliance. An active author on Medium, where she writes on health care innovation, direct primary care, concierge medicine, employer contracting, and compliance, she also has forthcoming publications in KevinMD, MedCity News, and BenefitsPRO. Additional professional updates can be found on LinkedIn and Instagram.
