Rediscover Your Purpose When You Embrace Direct Primary Care

Transcription PNC Podcast Episode 416

Rediscover Your Purpose When You Embrace Direct Primary Care

- Interview with Dr. Paul Thomas

John: I'm trying to learn more about direct primary care. So I'm really pleased to welcome my guest today, since he has written two books on the topic of DPC. So the first one is direct primary care, the cure for our broken healthcare system. And the second is called startup DPC, how to start and grow your direct primary care practice. So he's perfect guest for this topic. So Dr. Paul Thomas, welcome to the PNC podcast.

Dr. Paul Thomas: John, thanks so much for having me on. It's a pleasure to be here.

John: I wish I had met you 30 years ago, but I guess you wouldn't be in DPC then.

Dr. Paul Thomas: I would have been eight years old.

John: No, okay, I'm not going to tell you how old I am. But boy, this just sounds like I do a podcast about non-clinical careers, although I get in a lot of sort of unconventional careers for physicians that take just get rid of the stress and the burnout and so forth. A few years ago, I would say DPC is really unconventional, but I mean, it's now, it's becoming viable as an alternative. that's really wanted to talk to you because this is just awesome. And I want my audience to know about it. So tell us a little bit about yourself, your clinical background, and at some point in there, because you did it right out of residency, you discovered DPC. That's kind of where we can start.

Dr. Paul Thomas: Yeah, great. Went to Wayne State School of Medicine, largest single campus med school in America. And when I was 17, I started volunteering at Cass Clinic, which was run by medical students at Wayne State. When I was 17, I was like, I want to be a Wayne State med student. You know, I want to work with these students and deliver care to homeless folks and uninsured folks and elderly folks in the community in Cass Corridor, one of the poorest communities in the metro area, and help people with their healthcare needs. And we got to spend an hour with these folks, or 30 minutes, and we did physicals for the halfway houses that they were staying in.

And I just had this wonderful experience, and I matriculated into med school at Wayne State. And we also did these medical relief efforts to Peru and Haiti and Venezuela and all over the world. And so we bought thousands of dollars in meds, and we would take care of 500 people with all those meds over a one week trip.

And those two experiences really cemented that idea that you can take care of 500 people, a thousand people with a really low cost. And it doesn't have to be so expensive and so complicated. So when I finished my residency, I started my own direct primary care practice.

In residency, I wrote my business plan. In my third year residency, I did a one month direct primary care rotation that I wrote the curriculum myself and showed my program director and asked, hey, is it okay if I do this curriculum? And she signed off on it.

I got her blessing. I drove out to Denver to spend some time with Clint Flanagan. I drove out to Wichita, Kansas to spend some time with Josh Umber. I learned from some of the best DPC doctors in the country. I took the best of what they're doing to my hometown of Detroit and started serving people with $10 a month medicine for kids and $50 a month medicine for adults. And I've grown a lot from there.

John: Very nice. Were you attending some of those meetings while you were in residency or did that must have because to do the business plan, I assume you're kind of picking their brain?

Dr. Paul Thomas: Yeah, I went to a family medicine conference, Michigan Academy of Family Physicians Conference. I saw Dr. Flanagan speak there. But when I was writing a business plan, I reached out to my friend who started a suit company in Detroit called 1701 Bespoke. Go check them out. But I was like, hey, how do you write a business plan? He's like, oh, it should take you about four hours or eight hours if you're super detail oriented, just like writing a term paper.

And here's this template that I used and I used his template and wrote a business plan. And I did that as part of my practice management rotation in residency. So I think September of my third year in residency, I did practice management rotation.

It was all around fee-for-service medicine, but I used that time to plan what my direct primary care practice would look like. And then in March, I did my DPC elective rotation that I wrote for myself and read a lot of books, listened to podcasts like this and visited two successful DPC docs.

John: All right, just we're at a very high level. I mean, some of the practical things are you have to have a place to practice and you might need staff, although I suppose you could open a DPC by yourself.

Dr. Paul Thomas: I'm all about that minimum viable product. The MVP. And for me, when I started my practice in November, 2016, so about nine years ago, I made house calls.

John: Okay.

Dr. Paul Thomas: And then I didn't have a medical assistant. And then in January, I had like 30 people who had signed up for the service. So then I leased out an office. I subleased a technical office room, not a medical office from a school for digital technology that operated out of a former police precinct in Southwest Detroit. Talking about non-conventional.

And then I started seeing patients one at a time and I had a contact list. I saved a bunch of business cards from a lot of networking events. I just invited people into my space and said, let me give you a tour of Plum Health. And they came over and about 50% of the people that came through converted into members. And at the end of the year, I had about 125 people signed up and then about two and a half years in, I had about 575 people signed up.

John: At some point, you started doing some of the other things that come along with DPC. I've heard about, for example, discounted meds and range for lab tests and maybe even image analysis. When did all that stuff begin?

Dr. Paul Thomas: Yeah, I say I built the plane as I was taking off on the runway. And so the first month I had at-cost meds and at-cost labs.

John: Because you knew all about that from the other people you've talked to and so on.

Dr. Paul Thomas: Yeah, some mentorship. And when I joined Atlas EMR, they have a GPO which gets you into the wholesale meds. And then I asked Dr. Josh for his price list for the labs. And then I went to Quest and I asked for those prices and they laughed at me. But then I kept asking and kept asking and kept asking until I got a reasonable price for our lab. We had a CMP for $6. We had a CBC for $4 and a TSH for six bucks, et cetera. And then in three months, I bought an EKG machine. In four months, I bought a pulmonary function test machine or PFT machine and on and on. I just added to the clinic day after day, month after month to make it better and better. And now we have pretty much a full service primary care office.

John: All right, now, did I see something that you went from like just yourself to like four or let's say your primary location, I'm thinking in terms of locations, that you went last year from one to like four or five locations?

Dr. Paul Thomas: That's correct.

John: Okay, so walk us through that.

Dr. Paul Thomas: About two years ago, my friend who started the suit company had been admiring my business for about six, seven years. And he said, yeah, I'm in the film industry. He had sold his suit business. He was in the film industry. He was shooting all over the country and all over the world. And he's got two kids, like let's just say eight and five. And he's having to travel and be away from home. And that wasn't super comfortable. And he loved my business and wanted to join.

We created a partnership and we grew Plum Health. And one of the ways that we grew is that I got a phone call from some LinkedIn activity that I was making. They saw some of my posts on LinkedIn. They reached out and asked me to operate three of their clinics, Lansing, Corona, and Van Buren for a consortium of school districts and related employee and employer groups. And then as a partnership, we went out and built a Royal Oak office. So now we have Detroit, Royal Oak, Corona, Van Buren, Lansing.

And those five clinics all happened in 2024. We built, it took us about a year to build out the Royal Oak office because we had to completely gut and renovate it. But we overtook the operations of the other three clinics in February of 2024.

John: So how much are you involved in real estate or not?

Dr. Paul Thomas: Not really, we lease our buildings. So yeah, I'm involved in that. I read all the lease documents. I sign the lease documents. I execute all those as like the CEO of our group. But we're not buying buildings because that's not the core focus of our business. It's like, keep your main thing, the main thing. We take care of patients on a monthly membership. We do a really great job of taking care of people, keeping them out of the urgent care, keeping them out of the hospital and delivering excellent, kind, caring, high touch family medicine.

That's our focus. And maybe one day we'll have somebody on our team that helps us manage our leases or helps us buy buildings. But right now we have a really lean operation and we don't have a lot of free time to like hunt for the best real estate deals and go through all those steps.

John: Maybe you can teach us a little bit about the business. And this is one thing I've actually not talked to anybody about, but I do see DPCs with multiple physicians. And so I guess my question to you is typically is that multiple owners, one owner, every version thereof in between?

Dr. Paul Thomas: For us, I own the company and we have an equity split with our partners. And then we hire our doctors and pay them a salary based on how many patients they have. For some practices, they have a 50-50 split between two friends and partners who want to start a new practice. And that's a great way to do it. Some people like to do a 60-40 split. One person has like the ultimate decision-making power so you don't get deadlocked if things go wrong.

It's important when you're, like hypothetically, if you want to start a DPC practice, you have to think about what the end looks like as well. So you should sit down and say, this is how we want to go for our business to operate in the short term, the medium term and the long term. And when we're both done with it, we agree that we want to sell it to an outside entity or sell it to the doctors that we hire or just phase it out and hand our patients off to another doctor in the community.

Those conversations should be had before you start the partnership. And if you don't have those conversations, you're going to have hurt feelings because you don't know what the expectations of your partner are. Versus if you solely own and operate your practice and you hire people and you pay them a fair salary based on the work that they do, then ultimately you can make all the decisions about the practice and that's often easier.

John: I would say, and I've heard just from general, people that own small businesses, sometimes there's a valid reason to have partners but a lot of them are like, if you want to be able to make all those decisions, you better keep it a solo thing because you invariably will come up with some conflict 10 years from now that you hadn't anticipated.

Dr. Paul Thomas: And also things can happen. People can get sick or they have a family member that gets sick or something happens where the business is no longer their main focus. And if they're an employee, that's great. But if they're a partner, that can really complicate things.

John: Well, something you mentioned earlier, I didn't want to let it drop, was that one of the ways that this thing kind of expanded was someone came to you because they had a need at the schools or some businesses, which when you said that, it's like, okay, this is one thing that a lot of DPCs apparently focus on is sort of doing the same kind of thing because actually in the workplace, it's kind of been there for a while, even before DPC for primary care. I worked for like a corporate health at a hospital and we just went and served groups of families of employees at big companies. Tell me more about that.

Dr. Paul Thomas: Yeah, basically a lot of public school districts in Michigan have a hard cap, so they cannot exceed a certain threshold of spending. And it went up by like 0.3% this year, even though some insurance plans went up by 30% in costs. And so school districts are looking for ways to have innovative solutions to their healthcare challenges to give great service and take care of their employees and save money.

And this particular school district consortium, let's say, contracted with a national group based out of Tulsa, Oklahoma, and they would fly in once a year and have a lot of Zoom meetings. And they were losing money, they had a negative ROI, and the employees didn't like it, and the physicians and support staff were all burning out. So they invited us to bid on their RFP or request for a proposal.

We did and we won and we beat out a couple of other national groups. They ultimately picked us because we're Michigan guys, we live in Michigan. I can drive 30 minutes, an hour and a half, and an hour and 20 minutes to those clinical sites and fill in if somebody's sick or help with the operations or talk to the employees and the patients and really just be a steady hand and a steady presence. And they liked that about us and they picked us to operate those groups. They already had the infrastructure, so they already had the clinics. We had to go out and hire new clinical staff.

Mostly we retained two people who were really high-performing, and then we optimized the operations just by having clear policies and procedures, overstaffing them, like they were critically understaffed previously, and we overstaffed them to give them an abundance of helping hands and all of that helped to improve our ROI. So we turned around for a positive return on investment. We have really good NPS scores, which means that we get really good ratings and we've got good Google reviews. And we saved, one of the school districts has 700 employees in that consortium. We saved them $1.2 million in 2024.

John: Not bad, I bet they were happy about that.

Dr. Paul Thomas: Yes, and they're renewing and renewing and renewing. Because like I said, it's all about giving excellent care and service. We believe that healthcare should be affordable, accessible, excellent for everyone. And we're making this available for employer groups. It works great if you're a self-funded employer group with 200 employers or more. It works great if you're a school district with a hard cap. It works great if you have a group of 25 or 30 employees at a restaurant and you can't afford to buy health insurance. So you just want to give them excellent primary care. $85 a month per person gets coverage for all of your employees. And so we just try to make this really simple for everybody involved and it's effective.

John: Okay, then let's go back, way back. And this is probably a question I should have asked earlier, but give us your, if you were going to summarize what a DPC does that's different from traditional to someone off the street, what would be like the three or four or five concepts that you would say are just core to DPC?

Dr. Paul Thomas: We don't bill or use insurance. We don't bill or use insurance at all. And you pay a monthly membership and you can text, call and email your doctor at any time. And then we're going to work our ass off to save you money on labs, meds and imaging services. So instead of going to the hospital for a knee MRI at $3,000, go to the freestanding imaging center on Woodward and 10 and a half mile and get it done for 380 bucks or 350 bucks. Instead of getting a chest x-ray at the hospital for $250, go to that same freestanding imaging center and get it done for $60. We're going to save you 90% on your meds, labs and imaging.

And then we got an EKG machine in the office, no charge for that. We got a PFT machine in the office, no charge for that. We do your pap smears, we can order your mammograms. We save you 90% on your meds and labs. And we're available to you. You don't have to go to the urgent care anymore because you can call your primary care doctor directly. We reduce ER utilization by 40%. And so if you think it's probably going to cost you two grand just to walk in the door at the ER, and we just save you that two grand every time we prevent one of those instances.

John: Yeah, and the long waits, which are killers, really.

Dr. Paul Thomas: Yes, and you get to have a supportive, caring, dare I say loving relationship with yourself and your family physician where you actually get to know each other and it's a bi-directional relationship where you can text me and I'll text you back pretty much right away.

John: Yeah, that's awesome. I'm going to have more questions, but we're going to take a break here for you to tell us about your books because really, I think a lot of what you're talking about today is in the books in much more detail. But yeah, just tell me about the two books.

Dr. Paul Thomas: Yeah, I wrote the first one called Direct Primary Care, the cure for a broken healthcare system really early on in my process in like 2017. Essentially, it's a term paper. It's like 10,000, 12,000 words. I wrote in a couple of days. Just about my ethos on why I'm starting this and why I'm doing this. And think about it, it's 2017. Nobody really knows what the F this is. And they're like, what is DPC? Is it concierge? What is it?

It's not concierge, it's direct primary care. I lay out the differences. I talk about the growing movement. There's 300 doctors doing DPC in the United States when I started. Now there's maybe 3,000 right in 2025. So nine years, it's gone up 10X. I also talk about the patient interactions, the contract request and the meds and the local imaging vendors and how if you pay with cash and develop a free market for healthcare services, you can save a bunch of money on your healthcare.

Then I got really successful in my own personal practice. I hired two other doctors to help me run it. I built out a beautiful office on Michigan Avenue, a beautiful tire stadium site in Detroit at Michigan and Trumbull. If you're a baseball fan, that's where Ty Cobb and Babe Ruth and Cecil Fielder played ball, Alan Trammell. A lot of Tigers and a lot of visiting players, of course, came through Detroit and played at that ballpark. So we really got this beautiful Main Street office.

And every week, I got an email from somebody. How'd you do this? How'd you do that? So I compiled that into a 140,000 word book, like 10 times as long. And I published that as Startup DPC, how to start and grow your direct primary care practice. And I converted a bunch of those chapters into courses and lessons on my website, startupdpc.com, where doctors can go and learn exactly how I wrote a business plan, how I hired my first doctor, how I built out a larger office and many other topics that accelerate their growth. There are like immersive lessons with me.

And you get a copy of my business plan. You get a copy of my contract that I was using with my doctors at that time. So it's super helpful in accelerating your growth if you want to grow your direct primary care practice faster.

John: That's fantastic too. So the books, what's the best, easiest way to get access to books?

Dr. Paul Thomas: They're actually on Amazon and they're both on Audible.

John: Audible too, okay. And did you say the website was startupdpc.com?

Dr. Paul Thomas: You got it, startupdpcfordirectprimarycare.com.

John: Cool, I'll put that in our show notes and in my emails as I send them out to people. That's good. What about you personally? If I were to ask you like, what's your day like or your week like? What is a practice for you? What's it that you like about it?

Dr. Paul Thomas: Yeah, well, there's definitely phases to this. When I was solo, I was seeing like five to seven patients a day, four to seven patients a day. Sometimes as low as three patients a day. Whereas around 575 patients that is. And just giving them great care and service five days a week. And then I hired another doctor and we each added an admin half day.

And then as I hired doctors, I added a admin half day for every doctor that I hired. And that helped me manage everything that goes on in the office. Now we have 12 clinicians in the organization.

I fully transitioned as of this week into our medical director. So I am on call to all my doctors now who have questions about the care and service delivery. And then if somebody is sick or on vacation or maternity or paternity leave, I can step in and see some of the patients to ensure that there's no gaps in care or coverage.

Like it started out, I was seeing five, seven patients a day, five days a week. And then once every two to three months, I drive in for a laceration repair or a Lego in the ear of a child or a scalp laceration or whatever. I do it all for my patients.

And now I'm more in a management role of this organization as it continues to grow. I'm a CEO, medical director, and I wear many other hats, including like HR, accounting. And I'm planning for 2025, planning for 2026, planning for 2027, when to get a loan, when to get outside funding, all those things.

John: Well, do you think this is a model that can be adopted by most primary care doctors, not withstanding if they're working for some big, giant organization? Of course, they probably can't do it within that, but I mean, in general?

Dr. Paul Thomas: I'm sure there's like an 80-20 rule here, as with many things in life, but I think 80% of doctors and patients are going to be just fine practicing in the insurance-based world. But I think there's 20% of doctors and 20% of patients who are looking for something different. And when the supply meets demand, we'll hit an equilibrium.

But right now, I think one or 2%, probably closer to 2% now of the family physician workforce is working in a direct primary care setting. I think there's something like 120,000 family doctors in the United States, and somewhere around 2,000 or 3,000 of those are practicing in the DPC world. Let's just call it 2% or 3% of family doctors are in this world.

And I see there being a huge upside, because look, all these employer groups, they're all facing 30%, 10%, 20% year-over-year increases in their health insurance spend, and it's unsustainable. If a group takes a 30% increase year-over-year, in like three years, their insurance costs are going to double for their employees, and that's unsustainable. And they're going to look to us, direct primary care doctors in the direct primary care movement, or some of the national players for solutions.

And we want to win that business, and we are going to win that business, and we're going to hire more doctors to help us serve those patients and employer groups. And let's face it, doctors want to get out of seeing 30, 25, 30, 35 patients a day, and get into a practice model where they have an hour with their patients, they see five or seven or eight patients a day, and they get to spend 30 minutes or an hour with each of them and really dive in on their healthcare needs and develop a trusting relationship and give them excellent care and service. We don't want to, family doctors, we don't want the moral injury of having a patient who's really struggling and only have 10 minutes to take care of them. We want an hour for those folks to really help them.

John: Do you have a feel for how many or how large of a panel a typical DCP practitioner would have? I mean, I suppose based on the age of the patients and so on and so forth. So what are the kind of parameters there?

Dr. Paul Thomas: Yeah, the AAFP, American Academy of Family Physicians does an annual survey, I think every two years. They did one in 2022. They just released one for 2024. They say that the average family physician who has a direct primary care practice or a DPC practice has about 410 patients, which is about in line with us. We have about 450 patients per doctor. We aim for 500.

In an ideal world, that doctor would be efficient enough to see 600 patients. Some DPC practices, more corporate side, but really push for 700 or 800. And some independent docs might just fall at 300 if they're all paying $100 a month.

300 patients, you can make a pretty good living, 200 and 250K a year, depending on your overhead costs. It's a good life in the DPC pool if you can get your patients to pay like 80 or 90 or $100 a month and take care of 300, 350, 400, 450 patients, you'd have a really nice lifestyle and a really lucrative career, relatively. Considering that the average household income in the United States is, what, $70,000, $75,000 a year, you can make double or triple that, seeing 200 or 300 patients or 400 patients a year.

It's really amazing. And giving them great care and service. And retaining them over a long-term. And when they call you about their son or daughter, brother, sister, father, mother, you can step in and help them too.

John: When I'm listening to you, I get this feeling like, okay, man, I can get pretty creative here. When are we going to have the first residency that's dedicated to putting out only DPC family doctors?

Dr. Paul Thomas: That's a great thought. I think there's some family doctors who are noodling on this issue or thinking critically here. I'm not really into those weeds because I'm really focused on Plum Health and growing our team and our service.

John: I've learned a ton here. Listeners have learned a ton. They also have two resources to go to learn more, but they're going to want to learn from you, I'm sure, in different ways. So, for example, they can go to plumhealthdpc.com. Is that right?

Dr. Paul Thomas: Yes, that's our website for our practice and learn about our practice there. A lot of videos, blog posts. We got a YouTube channel, Instagram account, Facebook account, LinkedIn account. You can follow us on any of those socials.

John: Good, let's see. And then we talked about where they can go to get some actual instruction online, more or less.

Dr. Paul Thomas: Yeah, startup DPC. And I do some consulting on the side if you want to book 30 minutes or an hour with me. I have a consulting fee, but I'm happy to help.

John: It sounds like everyone that I've talked to in the DPC movement is very willing to share things.

Dr. Paul Thomas: Once you're the author of a book, though, the volume increases, so I have to set a consulting fee just to protect my level of burnout.

John: No, you don't want to spend four hours every other day mentoring and coaching someone.

Dr. Paul Thomas: And I easily could if I have that level of people who reach out to me for those requests. That's great, I'm flattered, but that's where I direct people to the book or the website or the videos. And then when I have one time with me, I do set up a fee.

John: I think a lot of my listeners tend to use LinkedIn. So if the random listener who just had one question, they could pop it.

Dr. Paul Thomas: Of course, of course, yeah. Got a quick question, happy to help you. Send me a LinkedIn note anytime.

John: Excellent. Well, I'll put all those links into those so that people have an array of options if they want to find out really just more about you and what you're doing. Well, I guess that's all I have for you today. I'll let you get back to running this enterprise. But any last sort of minute advice for some of my listeners if they're burnt out, frustrated with traditional medicine?

Dr. Paul Thomas: Jump on in, the water's warm. We're getting late July, early August. We have had a nice summer warming up these waters for you. And it's a great time to jump in the DPC pool. There's a lot of great direct primary care events. The AFP puts on a DPC Summit, the Hint Health EMR puts on a DPC Summit. There's a Rosetta Fest where people talk about the nuances of health insurance for businesses.

This is a growing movement that's picking up a lot of momentum. Patients in your community are looking for a doctor to give them excellent care and service, and they don't mind paying a monthly membership, so you can do it. And it's not the decisions, it's the decisiveness, just decide and pick an EMR if it sucks, switch, pick one, pick a MedMail vendor if it sucks, switch lease a space for a year, and if it's great, renew it, if it sucks, move to a new space. You know, it's business things work out well sometimes, other things don't work out, and you move to a different vendor and move on and keep going and growing.

John: Well, I think you're a good example that it can be successful, and there's obviously hundreds or thousands of others, so it's not any more sort of a novelty, okay? So for those that are in a position to make choices like this, then don't waste your time, learn about it, and if it's for you, then pursue it.

All right, well, I want to thank you for being here. This has been great, Paul. I've learned a lot, and I'm sure my listeners are going to love this. So with that, I'll say goodbye and let you go.

Dr. Paul Thomas: Thank you, John. It's been a pleasure, and have a wonderful week.

John: You too.