Compliance and Cybersecurity Requirements Stall DPC Growth Beyond Five Physicians

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Direct primary care (DPC) practices face significant barriers to growth, according to a national survey led by family physician Kenneth Qiu, M.D. The research reveals that many single-physician DPC practices operate without any administrative staff, and practices often plateau at around five physicians due to escalating compliance, staffing, and cybersecurity requirements.

Survey Findings on Direct Primary Care Practices

The survey, conducted by the Direct Primary Care Medical Home Alliance, collected data from practices across 49 states. Average DPC pricing was found to be near $98 per month, with full patient panels ranging from 400 to 700 individuals. The study estimates approximately 3,600 DPC practices exist nationwide. Qiu emphasized that many of the circulating statistics about DPC had previously lacked empirical backing, prompting the need for rigorous data collection.

Richard Payerchin, senior editor at Medical Economics, interviewed Qiu about the findings and the broader implications for the industry. Qiu, who founded EuDoc in Richmond, Virginia, highlighted that a third of single-physician DPC practices have no staff at all. This minimal staffing model works for small operations but becomes untenable as practices grow, according to Qiu. The survey also revealed widespread variation in pricing and panel sizes, highlighting the decentralized nature of the DPC sector.

Challenges in Scaling DPC Practices

As DPC practices expand beyond a few physicians, regulatory and administrative complexities increase sharply. Qiu noted that certain compliance obligations and paperwork requirements automatically trigger at specific employee thresholds, forcing practices to hire specialized personnel such as legal advisors, accountants, and IT security experts. Cybersecurity demands grow proportionally with practice size, adding further financial and operational burdens. Many practices, Qiu explained, reach a growth ceiling around five physicians because the costs of scaling outweigh the benefits.

Building a patient panel presents another hurdle. New DPC practices often start with a small number of patients, gradually expanding through referrals and marketing. However, physicians may moonlight in traditional healthcare roles while building their DPC panels, a practice complicated by Medicare’s billing rules. These rules penalize physicians who bill Medicare while also providing cash-based care, creating a disincentive for dual practice models. Qiu described this as a regulatory barrier that slows the growth of independent DPC operations.

Regulatory and Structural Barriers to Expansion

The survey identified several systemic issues limiting DPC adoption. Certificate-of-need laws, which restrict healthcare service expansion in some states, were cited as obstacles to practice growth. Additionally, the inability to apply cash payments toward patients’ insurance deductibles reduces the financial appeal of DPC for some consumers. Qiu argued that reforming these regulations could unlock greater access to the model.