DPC Is Growing Fast. Is the Financing System Ready for What Comes Next?

A quarter-million patients. Nearly 2,700 practices. An 83% surge in practice sites over five years. By almost every measure, Direct Primary Care is on a tear.

But a new analysis published in MedCity News asks an uncomfortable question: what happens to the insurance pools that those patients are leaving behind?

The Adverse Selection Argument

Healthcare finance consultant Dana Lujan argues that DPC’s growth creates a structural problem. When healthy individuals sign up for a DPC membership and downgrade to catastrophic-only insurance, they leave behind a sicker, more expensive risk pool. The remaining insured population gets more costly to cover. Premiums go up for everyone still in the traditional system.

This isn’t a new concern. Georgetown University’s Center on Health Insurance Reforms flagged it back in 2018, warning that DPC could siphon healthy consumers from ACA plans. The Commonwealth Fund has noted that the absence of regulatory oversight makes it nearly impossible to measure whether DPC practices are unintentionally concentrating healthier populations.

Lujan’s piece adds fresh data to the argument. DPC practice sites grew from 1,658 to 3,036 between 2018 and 2023. The global DPC market hit roughly $61 billion in 2024 and is projected to reach $93 billion by 2034. Corporate-affiliated DPC grew 576% during the study period. At some point, the argument goes, these numbers stop being a rounding error in the broader insurance market.

What the Data Actually Shows

Here’s where it gets interesting. The same analysis cites Society of Actuaries data showing DPC is associated with a 12.6% reduction in healthcare service demand and a 40.5% drop in ED usage. The American Consumer Institute found a 20% reduction in hospital admissions and a 41% decrease in ER visits among DPC patients.

Those aren’t numbers that describe a model skimming healthy patients. Those are numbers that describe a model making patients healthier and keeping them out of expensive care settings.

The adverse selection argument assumes DPC only attracts people who don’t need much care. But any physician running a DPC practice knows that’s not the full picture. Plenty of DPC patients have chronic conditions. They join because they want a doctor who has time to manage their diabetes or hypertension properly, not because they never need medical attention.

The real question isn’t whether DPC attracts some healthy patients. Of course it does. The question is whether the total system cost goes up or down when those patients get more preventive care, fewer ER visits, and fewer hospitalizations.

The Employer Factor

One of the most telling data points in Lujan’s analysis: 58% of all DPC enrollments are now employer-sponsored, up 18 points since 2022. Twelve-month retention for employer-sponsored DPC sits at 85%.

This matters for the adverse selection debate. Employer groups reflect a broader cross-section of health status than individual purchasers. When a company offers DPC to all employees, the enrollment pool includes people with chronic conditions, not just the young and healthy.

Lujan actually acknowledges this, recommending that DPC growth be “anchored” through employer contracting rather than retail consumer models. That’s already happening. The market is moving in the direction she recommends.

The 33-State Regulatory Gap

One point in the analysis that deserves attention: 33 states currently exempt DPC from insurance regulation. Lujan frames this as a “measurement vacuum” that prevents tracking whether DPC practices concentrate healthier populations.

She’s not wrong that more data would be useful. But the exemption exists for a reason. DPC isn’t insurance. It’s a direct relationship between a doctor and a patient. Regulating it as insurance would introduce the exact administrative overhead that DPC was designed to eliminate.

The challenge is finding a middle ground: transparency and reporting requirements that don’t crush small practices under compliance costs, but that do give policymakers the data they need to understand DPC’s effects on the broader market.

What This Means

If you’re running a DPC practice, this analysis previews a conversation that’s heading your way. As DPC grows from 250,000 patients to 500,000 and beyond, expect more scrutiny from actuaries, insurers, and regulators about what happens to the risk pools you’re pulling patients out of.

The strongest response isn’t to dismiss the concern. It’s to collect and publish the data that tells the full story. If your patients are healthier, using less emergency care, and managing chronic conditions that would otherwise drive up system costs, that’s an argument that DPC is making the whole system work differently, not just cherry-picking the easy patients.

For physicians considering the transition, articles like Lujan’s are worth reading carefully. They represent the sophisticated policy objections you might hear from hospital administrators, insurance executives, or state legislators. Understanding the argument makes you a stronger advocate for the model.

The DPC movement has spent years proving the clinical model works. The next phase is proving the financial model works at scale, not just for your practice, but for the healthcare system around it.