#26: The Business of Better Medicine: Choosing the Right Model for Your Practice

There's a conversation that happens quietly in functional, integrative, and longevity medicine — in conference hallways, on mentorship calls, in DMs between colleagues who've hit the same wall.

It usually starts with something like: I'm doing the work I trained to do, but the economics don't add up.

That's not a personal failing. It's a structural one.

The dominant payment model in American medicine was designed for episodic, volume-driven care. See more patients. Order covered tests. Bill the code. Move on. For the clinician who spends more than 10 minutes during a visit, sees patients who are already well and want to be proactive about their health, orders specialty tests like a GI-MAP and a genomic panel, and coordinates care with the team of a nutritionist, physical therapist, and health coach, that model makes the work nearly impossible to sustain.

The good news: 2026 may be the best year in a generation to build something different. A landmark policy shift now allows patients to use HSA funds for direct primary care (DPC) memberships for the first time. Private equity has taken notice. There's arguably no hotter investment category right now than alternative primary care delivery, and a Johns Hopkins study confirmed what many already knew anecdotally: fee-based primary care has grown rapidly in the US, with DPC and concierge practice sites increasing 83% between 2018 and 2023.

The question isn't whether the shift is happening. It's whether you have a framework to navigate it.

Let's be direct about the structural mismatch.

In a traditional insurance-based practice, the math requires seeing roughly 25 patients per day across a panel of 2,000–3,000 to cover 55–65% overhead. The highest-level E/M code reimburses $175–$250 from Medicare, for what functional medicine clinicians know should be a 90-minute encounter.

Beyond the time constraints every clinician faces, insurance typically doesn't cover the core of the specialty: proactive, preventive, and continuous care focused on wellness rather than illness. Specialty testing, nutraceuticals, and “alternative therapies” are routinely denied as "experimental" or "not medically necessary." The team-based care model that functional medicine depends on —health coaches, nutritionists, care coordinators — gets no reimbursement at all unless medically indicated, which requires more time for documentation and justification by the provider to the insurance company.

Centers for Medicare & Medicaid Services (CMS) finalized increased pay rates for physicians in 2026, but the longer-term trend is punishing: Medicare physician payments have declined by roughly 29–33% in inflation-adjusted terms since 2001, while practice costs have risen steadily. National primary care spending has dropped to just 4.5% of total health expenditure — less than half the Organisation for Economic Co-operation and Development (OECD) average.

The model isn't broken for what it was built for. It's broken for what we're trying to do.

There's no single right answer, and the decision isn't one you make once. Think of it as a spectrum, with different models suited to different patient populations, practice stages, and clinical philosophies.

Here's how the major models compare and when each one makes sense.

1. Pure insurance

Still the default for most practices, and still viable in some contexts. But for functional, integrative, and longevity medicine specifically, the structural constraints outlined above make it extremely difficult to deliver the level of care the specialty demands without burning out in the process.

If you're in this model, the question isn't whether to eventually move — it's how fast and in which direction.

2. Hybrid / blended

This is where most clinicians land first, and for good reason. Insurance covers E/M visits, basic labs, and standard diagnostics. Cash covers everything else — specialty testing (DUTCH, GI-MAP, organic acids, advanced lipids), extended consultation time beyond covered minutes, nutraceutical dispensing (10–35% margins through platforms like Fullscript), IV therapy, health coaching, weight management programs, hormone monitoring.

Typical revenue splits run 40–60% insurance to 40–60% cash, depending on service mix. The compliance architecture matters here more than most clinicians realize — best practices call for a separate legal entity for cash-pay services, distinct from your insurance-contracted practice. Medicare patients have the tightest restrictions; non-Medicare patients have more flexibility.

A practical structure that works well: bill insurance for the first 20–30 minutes of an intake under a standard E/M code, then charge a separate membership or package fee for the remaining time covering the full comprehensive consultation. It's clean, it's defensible, and it lets you get paid for the work you're actually doing.

3. Direct primary care (DPC)

This is the fastest-growing model in American medicine right now, and the January 2026 HSA rule change just added fuel to the fire. For the first time, the IRS allows patients to use pre-tax HSA dollars to pay DPC membership fees — up to $150/month for individuals and $300/month for families. For practices already pricing in the $75–$150/month range, this effectively reduces the patient's out-of-pocket cost by 25–37%, depending on their tax bracket. That's a meaningful shift in the affordability conversation.

The fundamentals are straightforward: fees typically range from $50–$150/month for adults and $20–$75 for children, with panels of 300–500 patients per physician. Overhead drops to 30–35%, compared to 55–65% in insurance-based practices, because you're eliminating billing staff, coders, and claims processing entirely. Run the math on a mid-range practice: 400 patients at $75/month generates $360,000 annually. Scale to 600 patients at $100/month and you're at $720,000 — with a fraction of the overhead.

The satisfaction data are striking. According to the AAFP's 2024 DPC data brief, 94% of DPC physicians report practice satisfaction, compared with 57% in traditional settings. And only 12% report burnout, versus 46% of their non-DPC peers. DPC practices now operate in all 50 states, and the model has become a natural home for functional medicine clinicians who layer on specialty services — advanced labs, coaching, precision protocols — as add-on fees on top of the DPC base.

One more thing worth knowing: the Health Affairs study from Johns Hopkins, published in December 2024, confirmed what many of us already sensed. DPC and concierge practice sites grew by 83% between 2018 and 2023, from 1,658 to 3,036. The number of clinicians working in these models nearly doubled. And corporate-affiliated practices grew by 576% during that period, which is both a signal of validation and a reason to build your own thing before someone else defines the model for you.

4. Concierge

The key distinction from DPC: concierge practices continue to bill insurance while charging an annual retainer on top. That creates dual revenue streams and appeals to patients who want genuine access and extended time without fully abandoning their insurance coverage.

Annual retainers typically range from $2,000 to $10,000, with most falling between $2,000 and $5,000. Panels run 400–600 patients per physician. At 500 patients paying a $3,000 annual retainer, you're looking at $1.5 million in retainer revenue alone — before any insurance billing hits the books.

This model also appeals to clinicians who aren't ready to exit insurance contracts entirely but want to fundamentally change the economics and pace of their practice. The trade-off is that you're still managing two systems — the insurance bureaucracy doesn't disappear; it just becomes one layer of a larger financial structure.

5. Cash-pay fee-for-service

Maximum clinical flexibility, minimal revenue predictability. Patients pay per visit or service with no membership commitment. Typical pricing runs $350–$500 for an initial comprehensive consultation (60–90 minutes), $375–$450 for a follow-up with lab review (60 minutes), $100–$150 for a brief follow-up (15–30 minutes), and $2,500–$5,000 for a comprehensive 3–6 month bundled program.

This works best for highly specialized practitioners with strong referral networks, or as a transitional phase toward membership. Its weakness is real: there's no recurring revenue floor. Slow months, cancellations, and seasonal swings hit the bottom line immediately. You feel every no-show.

6. Membership + packages

This is the financial architecture most mature longevity and integrative practices are converging on, and for good reason. Monthly or annual membership fees generate predictable Monthly Recurring Revenue (MRR) — the metric most valued by practice owners and, increasingly, by investors.

Tier structures typically look something like this. Tier 1, a foundational level at $99–$199/month, covers baseline access, member-only lab and supplement pricing, and wellness technology. Tier 2, an optimization level at $300–$500/month, adds quarterly comprehensive sessions, advanced lab review, health coaching, and everything from Tier 1. Tier 3, an elite level at $500–$1,500/month, delivers full concierge care, dedicated physician access, advanced biomarker panels, regenerative therapies, and wearable integration.

At the premium end of the longevity market, pricing rises significantly — annual programs range from $5,000 to $50,000, with ultra-premium platforms pushing even higher.

The membership model's real advantage is churn management. Average annual churn in well-run membership practices runs around 20%, with best-in-class operations reducing that to 10% through engagement and outcome tracking. Patients who visit at least once per year show 37% higher renewal rates than non-visitors, which means your clinical engagement strategy and your retention strategy are the same thing.

The question isn't which model is best. It's which model is right for your patient population, your geography, your career stage, and honestly, your temperament.

Transitioning away from insurance is the right move for some clinicians. It's the wrong move for others. And for many, the answer is a hybrid that evolves over time. Here are the questions that actually matter.

Who are your patients, and what can they pay?

This is the first filter, and it's not a values question — it's a market question. A cash-based concierge longevity practice works in an urban or suburban market with a professional population that has discretionary income and HSA-eligible plans. It doesn't work in a rural or underserved community where a $100/month membership fee is a genuine barrier. If access to your patient population depends on insurance participation, that has to factor in. DPC's low-price-point membership model ($50–$100/month) has shown more success bridging the gap, especially when combined with the new HSA compatibility, but no model is universally applicable.

How do you actually want to practice?

There's a meaningful difference between wanting more time with patients and wanting to build a relationship-based longitudinal care model. The former might be solved by moving from a 2,500-patient panel to a 1,200-patient hybrid practice with better billing. The latter probably requires DPC, concierge, or membership. Be honest about which problem you're actually solving.

If your core frustration is that insurance doesn't cover the labs and services you want to provide, a hybrid model with cash-pay add-ons may be the cleanest solution without the overhead of rebuilding a patient panel from scratch.

If your frustration is the pace and fragmentation of care itself — the 15-minute appointments, the inability to coordinate deeply, the impossibility of following a patient's trajectory — that's a structural problem, and it takes a structural solution.

What's your risk tolerance and runway?

Full cash-based practices require building a patient base from a lower floor. DPC break-even typically comes at 200–300 members, which takes most practices 7–12 months to reach. A solo clinician launching from scratch needs financial reserves to bridge that gap — typically 1–3 months of operating expenses — and a realistic plan for patient acquisition. Referral networks, community presence, employer partnerships, and digital visibility all matter more when you're not on an insurance directory.

For an established clinician with an existing panel, the calculus is different. You can introduce cash-pay services into an existing practice, test market response, and build revenue before touching your insurance contracts. The risk is lower; the transition is slower.

What's your geography telling you?

DPC and concierge penetration vary enormously by region. Highly concentrated metros tend to have more sophisticated patients who understand the value proposition of a membership model. Smaller markets may require more education — but they also tend to have less competition from other cash-based practices. Some regions have favorable DPC legislation (DPC-specific legal frameworks exist in 27+ states), while others create greater compliance complexity. Know your regulatory environment before you choose a model that depends on it.

Are you trying to scale or build something you can sustain?

These are different goals with different model implications. A solo physician who wants to see 300 patients deeply, practice outstanding medicine, and maintain a sane work-life balance may be perfectly served by a DPC or membership practice that intentionally caps its panel. There's nothing wrong with that — it's actually one of the stronger arguments for these models.

A clinician building a multi-provider practice, attracting employer contracts, or positioning for an acquisition needs a model with predictable, recurring revenue, clear unit economics, and scalable infrastructure. Membership + packages with tiered pricing build toward that.

The bottom line: insurance isn't always the enemy ,and cash isn't always the answer. The right model is the one that lets you deliver the care your patients need, generate the revenue to sustain it, and practice in a way you can maintain over a career. For many clinicians, that's somewhere in the middle — and "middle" isn't a compromise. It's a deliberate design.

We sat down with three Vibrant clinicians who recently launched cash-based practices to talk about what it really takes to build from scratch — the models they chose, the tradeoffs they made, and what they’d tell clinicians still on the fence.

While their paths looked different, one theme kept surfacing: each reached a point where the traditional system no longer allowed them to practice the kind of medicine they believed in.

Dr. Philip Deibel, MD — D5 Health (Raleigh, NC)

Double board-certified in OB-GYN and Lifestyle Medicine, Dr. Deibel launched D5 Health in 2025 as a fully cash-based concierge longevity practice after years in traditional OB-GYN. With additional training in peptide therapy, hormone optimization, and longevity medicine, his pivot came from watching the gap between what patients needed and what insurance would reimburse grow wider. The cash model allowed him to focus on prevention and optimization without fee-for-service constraints.

Crystal Brust, PA-C, IFMCP — Farm to Functional Medicine (Sacramento, CA)

Crystal’s shift to functional medicine began with her own PCOS diagnosis and recovery through nutrition and lifestyle. Today her practice, Farm to Functional, runs as a membership-based clinic with limited patient panels and annual subscriptions. Drawing on experience in emergency medicine, flight paramedicine, and pediatric cardiovascular surgery, she designed the model to prioritize deeper, more personalized care while still allowing patients to use HSA/FSA funds and insurance for labs.

Dr. Dannette Kallay, MD — KallayMD (Virtual, Waycross, GA)

Triple board-certified in Pediatrics, Integrative Medicine, and Functional Medicine, Dr. Kallay built KallayMD as a fully virtual, cash-based consultative practice now licensed in seven states. Her niche is functional genomics, including IntellxxDNA-certified interpretation, and she’s created a second revenue stream by partnering with clinicians who refer patients specifically for genomic analysis and care planning.

Across all three conversations, the takeaway was simple: the hardest step isn’t building the practice — it’s deciding to take the leap.

All three of these clinicians built their practices on Vibrant, the AI-powered, all-in-one EHR built specifically for personalized medicine. If you're evaluating practice models and wondering whether your current tech stack can actually support the transition, that's a conversation worth having.

Amazon expands Health AI — its agentic health assistant — to all U.S. customers via Amazon.com and the Amazon app. he tool now lives inside the Amazon app and connects to the nationwide Health Information Exchange, allowing it to pull longitudinal records, labs, and medications. It can interpret results, manage prescriptions, book appointments, and escalate to a One Medical provider when complexity is detected. Built on Amazon Bedrock as a multi-agent system—with auditor and sentinel agents reviewing outputs in real time—it signals a shift from simple chatbots to AI health assistants that act on patient data. The practical takeaway: more patients will arrive with AI-generated interpretations of their labs and records before the visit even starts.

Epic reports that 85% of its customers now use Epic AI, and unveils Agent Factory at HIMSS26. he new no-code platform lets health systems build custom AI agents that operate across clinical and administrative workflows. Early results show tangible operational gains—discharge summaries completed 20–30% faster, prior authorization time cut 42% at Summit Health, coding denials down more than 20%, and billing-related patient messages reduced 58% at Rush. Epic also previewed “Curiosity,” a family of medical foundation models trained on real-world patient records to predict disease progression and treatment response—another sign the EHR is evolving into an AI operating system.

HHS publishes the industry wish list for accelerating clinical AI adoption — and the biggest vendors want very different things. A recent request for information asked companies what regulatory changes would help scale AI in healthcare. Responses from vendors like Epic Systems, Oracle, Abridge, and Tempus revealed a familiar divide: large platform companies want AI tightly integrated and regulated within EHR ecosystems, while AI-native startups argue for faster approval pathways and fewer barriers to entry. The regulatory framework taking shape now will influence how quickly new tools reach clinics—and how much control clinicians retain over the AI running in their workflows.

The Modern Clinician is written for functional, integrative, and longevity-focused physicians who want to scale their impact and deliver cutting-edge care.

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