In my previous article, I examined why direct primary care (DPC) practices fail, focusing on financial modeling, compliance risks, and the gap between what’s legal and what’s sustainable. But there’s a more fundamental issue that precedes all of those concerns: market-model fit.

The direct primary care community loves to debate panel size, membership pricing, and model purity. We dissect what went wrong when practices fail. We blame insufficient commitment, poor financial planning, or straying from the “true” DPC model.

What we don’t ask is the question that could save thousands of physicians from expensive failures: Should you be doing DPC in this market at all?

I’ve advised dozens of physicians who realized too late that their zip code, not their model, was their biggest constraint.

You can have perfect financials, pure DPC ideology, and impeccable compliance, and still fail spectacularly if you’re trying to sell $90/month memberships in a market where the median household struggles to afford groceries.

The cautionary tale nobody discusses

The University of Houston DPC clinic received $1 million in funding and closed after just 13 months. The post-mortem focused on model purity and operational missteps.

Here’s what almost no one discussed: They built it in Southwest Houston where the uninsured rate is 45 percent, five times the national average, and nearly one in three people live below the federal poverty level. Basic arithmetic showed a massive revenue deficit before they ever opened their doors.

They asked, “Are we doing DPC right?” when they should have asked, “Can this market support DPC at all?”

That clinic didn’t fail because the idea was wrong. It failed because the math was ignored.

The five questions you must answer before launching

I’ve spent 2 decades designing health care financial models. I’ve watched physicians ignore market reality because they fell in love with an idea. Before you write your resignation letter and launch your dream DPC practice, answer these five questions with actual data, not optimism:

What percentage of your target market can actually afford your membership fee

Pull census data for your zip codes. If you’re charging $90/month for DPC, you need households with enough discretionary income to absorb that cost. A household earning $50,000/year with kids probably can’t.

If only 30 percent of your geographic area has the income level to support your pricing, you’re starting with a dramatically smaller addressable market than you think.

What’s the payer mix in your target area

High Medicaid penetration means you’re competing with “free” coverage. Check CMS data and local practices. If Medicaid exceeds 40 percent, your model needs serious reconsideration or employer sponsorship.

How many DPC practices already exist in your market

First-mover advantage is real in DPC. The physician who opened 3 years ago already captured the early adopters. Search DPC Frontier, local medical societies, and Google. Map every DPC and concierge practice within 20 miles. If there are already four established practices, you’re fighting for scraps.

Better yet, take a walk around the office you’re thinking about starting and drive the community. I call it location recon (not all DPC and concierge practices show up on Google).

Can you realistically reach 300+ members within 18 months

Most DPC practices need 300-400 members to break even. Do the conversion math: How many people in your network? What’s your realistic conversion rate? Model conservatively.

Is there employer appetite for DPC partnerships in your area

This might be your escape hatch. Employer-sponsored DPC removes the individual affordability barrier. Research local employers. Are they self-insured and motivated to reduce costs? Don’t assume, validate.

When the market pushes you toward concierge

If your analysis shows median household incomes above $120K, high commercial insurance, and low Medicaid rates, you might be planning the wrong model.

DPC at $50-150/month appeals to cost-conscious professionals. Concierge medicine at $200-500/month appeals to executives who value premium access and expect to use their insurance.

Or consider tiered pricing: different service levels for different income brackets. You can be accessible AND profitable. Match your model to your market demographics, not your ideology.

I’ve watched physicians in affluent suburbs launch DPC at $90/month when their market would support $350/month concierge fees. They left revenue on the table by choosing ideology over market match.

The inconvenient truth

Sometimes the answer is no. Your market cannot support a traditional membership-based DPC practice. Not because you lack talent or commitment, because the demographics don’t align with the model.

That’s not failure. That’s business intelligence.

I’ve seen practices navigate challenging markets by staying flexible. The best DPC physician I witnessed completely understood his market constraints, kept his viable insurance contract, created a DPC membership option for uninsured individuals, and pursued employer partnerships. He’s profitable, sustainable, and sleeps at night.

The DPC purists called him a sellout. He called it paying his mortgage.

What’s next

Even $60/month “affordable” DPC faces hidden challenges in lower-income markets. In Part 2, I’ll explore the behavioral economics that explains why successful practices in these markets had to fundamentally change their business model to scale.

The bottom line

Do the market analysis with actual demographics, payer mix, competition, and conservative assumptions, not fantasy projections.

If the math works, build something great. If it doesn’t, you have options: hybrid models, employer partnerships, concierge medicine, or geographic relocation.

Don’t ignore the math and hope passion overcomes market reality. The DPC model works (in the right markets, with the right math).

Ask the question nobody wants to ask: Can your market actually support your chosen model?

Because the most successful practice is the one that’s still open in 5 years. And business sustainability is the most radical form of patient advocacy.

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.