How Do Health Systems Launch Direct Primary Care?
Health systems launch direct primary care by carving out a small group of physicians, giving them much smaller panels, and replacing per-visit insurance billing with a fixed monthly membership paid by patients, employers or both. Most start with one or two practices, often serving their own employees first, then open to the public and sell the same contract to local employers. The decisions that shape everything else are whether the program bills insurance at all, how it handles Medicare, and whether members can stay HSA eligible.
This guide is for hospital and health system leaders, large medical groups and employers weighing a DPC or membership primary care launch in 2027. It covers real programs you can look at today, the four models that come up most, the regulatory questions to settle early, and how to tell whether the program is working. It is general information, not legal advice, and every structure below deserves a review by healthcare counsel in your state.
Which Health Systems Already Offer Membership or DPC Programs?
Several well-known systems have public programs, and they fall into two camps. Some are true direct primary care, where the membership pays for primary care and insurance is not billed for those visits. Others are concierge or hybrid programs, where an annual fee buys added access while insurance is still billed for covered care.
Direct primary care inside a health system
Cooper University Health Care launched Cooper Direct Primary Care in Haddonfield, New Jersey, in April 2024. It partnered with two family physicians who had already worked in a DPC-model office for five years, and members get unlimited primary care visits without billing insurance directly, their physician's cell phone, and same-day or next-day appointments.
Cooper's program page describes the membership as HSA eligible.
Cooper lists the membership at $150 a month.
MaineHealth took an employee-first path with Trellis Health. According to the Sun Journal, the program was open to MaineHealth employees from 2024, about 700 opted in, and in September 2025 it opened to the public and to employers. Members keep their health insurance for everything outside primary care.
The Sun Journal reported Trellis memberships starting at $109 a month.
Concierge and hybrid membership programs
KFF Health News reported in April 2024 that Northwestern Medicine, Penn Medicine, University Hospitals in the Cleveland area and Baptist Health in Miami are among the large systems offering concierge physician services. Baptist Health opened its program in 2019, initially to serve donors, and had three practices across South Florida at the time of the story.
KFF reported that Baptist Health patients pay $2,500 a year, and that hospital concierge fees across systems can exceed $4,000 a year on top of copays and deductibles.
Brown University Health took a similar approach in October 2026. Its Primary Care Select program in Cranston, Rhode Island, offers dedicated physicians with limited panels for an annual fee, while insurance continues to be billed for covered primary care, labs, imaging and specialist care.
Brown lists the Primary Care Select fee at $2,400 a year.
A corporate example
Outside hospital systems, Amazon's One Medical is the best-known corporate membership practice. Its membership page says it works with insurance like a regular office, with visits billed to the patient or their insurer, while the membership adds access and convenience.
One Medical lists its membership at $199 a year.
If you want a deeper comparison of the two camps, our guide to DPC vs concierge medicine walks through fees, insurance billing and Medicare side by side.
What Are the Models for Hospital DPC Programs?
Most health system programs fit one of four models, and many systems end up running two of them from the same practice. The table below compares who pays, where Medicare gets complicated and which organizations each model suits best.
| Model | Who pays | Medicare issues | Best fit |
|---|---|---|---|
| Direct-to-consumer DPC membership | Patients pay a monthly fee, and insurance is not billed for included primary care | Physicians either stay enrolled and keep Medicare-covered services out of the fee, or opt out and use private contracts | Systems with a defined market of patients who want access and are comfortable paying monthly |
| Employer direct contract | The employer pays a per-employee monthly fee, often alongside its health plan | Usually minor, since most covered lives are working-age, but retirees and Medicare-eligible employees need a plan | Systems with strong local employer relationships, or selling to self-funded employers |
| Onsite or near-site clinic | The employer pays, either a fixed fee or a management arrangement | Same as the employer contract, plus any rules for seeing non-employees at the site | Large employers, school districts, municipalities and the health system itself as an employer |
| Hybrid inside the employed medical group | Patients pay an annual fee, and insurance is still billed for covered visits | The fee must cover only services Medicare does not already pay for, per the 2004 OIG alert | Systems that want to keep payer contracts and fee-for-service revenue in place |
Direct-to-consumer membership
This is the model closest to independent DPC. The practice sets a monthly fee, enrolls members directly and does not bill insurance for the primary care in the membership. Cooper's program is an example. It gives physicians the most freedom over their schedules and panel, and it is the model most likely to keep members HSA eligible.
Employer direct contracts
Here the employer is the customer. The system signs a contract with a local employer for a set monthly fee per enrolled employee, and the employees get the same access as individual members. This is the largest market in DPC overall. Hint Health's Trends in DPC 2026 report found that nearly 60% of memberships are employer-paid.
Hint also reported a median employer fee of $65 a month in 2025.
Our guide to selling direct primary care to employers covers pricing, eligibility files and the conversations that win these contracts.
Onsite and near-site clinics
An onsite clinic is a location decision more than a payment model. It becomes DPC when the employer pays a fixed periodic fee for primary care rather than having the clinic bill the health plan per visit. Health systems are often their own best first customer, since they employ thousands of people and already pay for their care. MaineHealth's Trellis Health started exactly this way.
Hybrid membership inside the employed group
The hybrid model keeps the practice in-network and billing insurance, then adds an annual fee for added access, longer visits and direct contact with the physician. Baptist Health, Brown University Health and One Medical all bill insurance alongside their fee. It is the easiest model to stand up inside an existing medical group, but it carries the most Medicare and payer-contract questions, and members are unlikely to get the HSA treatment that a true DPC arrangement can qualify for.
Can a Hospital DPC Program See Medicare Patients?
Yes, and this is the question to settle before anything else. Medicare.gov's concierge care page says Medicare does not cover membership fees, that doctors offering concierge care must still follow Medicare rules, and that doctors who accept assignment cannot charge extra for Medicare-covered services.
The HHS Office of Inspector General made the same point in its March 31, 2004 alert on added charges for covered services. It described a physician whose annual contract included services the OIG alleged Medicare already covered, and it treated each contract as a request for extra payment that violated the assignment agreement. That alert is why hybrid programs define their fee around services and access Medicare does not pay for.
The opt-out path
A true DPC program that wants to see Medicare patients without billing Medicare usually relies on physicians who have opted out. Under 42 CFR 405.410 and 405.445, an opt-out runs for two-year periods that renew automatically, and the physician signs a private contract with each Medicare patient. Because opt-out follows the clinician, a health system should think through how it affects that physician's other work in the system, such as hospital coverage or shifts at another clinic. Our guide to DPC for seniors on Medicare explains how this looks from the patient's side.
Charging members for covered services and payer contracts
The same logic carries into commercial insurance. If a practice stays in-network with a payer, the participation agreement may limit what you can charge that payer's members for covered services, so legal and managed care teams should review every contract the DPC physicians are credentialed under. Some systems handle this by moving DPC physicians into a separate entity or practice location that does not participate with commercial payers for primary care, while others choose the hybrid model to keep contracts intact.
How Do State Laws and the HSA Rule Affect a Health System Program?
State law shapes whether a DPC membership could be treated as insurance. Roughly two-thirds of states have a DPC law saying a qualifying membership is a medical service and not insurance, but the definitions, required contract terms and limits vary from state to state. Check your states in our guide to direct primary care laws by state, especially if your system crosses state lines.
Federal tax law now matters too. Since January 1, 2026, Public Law 119-21 lets people with HSAs join a qualifying DPC service arrangement without losing eligibility. IRS Notice 2026-5 says the fixed periodic fee must be the sole compensation for the primary care in the arrangement. That is a real fork in the road. A membership that also bills insurance for the visits it includes is unlikely to qualify, while a true DPC membership like Cooper's can.
For 2027, IRS Rev. Proc. 2026-24 sets the monthly fee limit for keeping that eligibility at 150 dollars a month for one person and 300 dollars a month for a membership covering more than one person.
Our full guide to DPC HSA rules for 2027 covers the excluded services and the details employers will ask about.
How Big Should Panels Be in a Health System DPC?
Plan for panels far smaller than your employed primary care physicians carry today. KFF Health News reported that concierge physicians typically limit their practices to a few hundred patients, compared with a couple of thousand for a traditional primary care doctor. On the DPC side, the AAFP's 2026 DPC data brief reports an average panel of 504 patients in 2025 across all 313 of its survey respondents, 53% of them practicing in DPC.
That gap is the whole point of the model, and it drives the financial plan. Revenue per physician comes from the membership fee multiplied by the panel, plus any employer contracts, rather than from visit volume. It also means growth comes from adding physicians, not from adding patients to existing ones. Our guide to DPC break-even panel size has the math, and how much to charge for DPC membership covers pricing.
Does DPC Help Health Systems Recruit and Retain Physicians?
It can be part of the case, and the reporting suggests hospitals see it that way. KFF Health News reported that for hospitals, concierge fees provide new revenue and serve as a tool to help recruit and retain physicians. Cooper's launch also shows a quieter recruiting path, which is partnering with physicians who already run in a DPC model and giving them a system's resources behind them.
Many physicians weighing this choice are deciding between building their own practice and joining a program inside a larger organization. Our guide to leaving employed medicine for DPC shows what they are comparing, which helps a system shape an offer that physicians actually want.
How Do You Measure Whether a Health System DPC Program Is Working?
Pick a few measures before launch and report them the same way every month. Useful ones include panel fill against target, member retention, how fast members get an appointment, response time on messages, employer contract renewals, and downstream use of the system's specialists, imaging and hospital services. For employer contracts, plan to share utilization and satisfaction data at renewal.
Our guide to DPC metrics to track in 2027 covers definitions and benchmarks for each one.
What Technology Does a Health System DPC Program Need?
A DPC practice inside a health system usually needs tools the enterprise EHR was not built around, such as recurring membership billing, employer invoicing and eligibility files, and direct messaging between members and their physician. Cooper, for example, routes its enrollment through a Hint signup page while members still use the system's MyCooper record. Our guide to the best DPC software for 2027 compares the membership, EHR and messaging options.
The harder question is how those tools talk to the system's main EHR, lab and referral workflows. If you are moving records into a new platform, read how to switch EHRs without losing patient data before you sign anything. Once the tools are chosen, the gaps between them are where follow-ups slip. Tabflows is a dedicated tech team that connects the tools a clinic already uses, like the EHR, billing and messaging, so follow-ups, tasks and patient context live in one place.
Where to Start
Most systems that do this well start small. They choose one model, launch one practice with physicians who want the work, settle Medicare and payer contracts up front, and decide early whether HSA eligibility matters to their employers and members. Then they measure for a year before adding locations.
If you are mapping a launch, our 2027 guide to starting a DPC practice covers the steps every new practice works through, and the DPC Finder shows the independent practices already serving your market.
FAQs
Do health systems offer direct primary care?
Yes. Cooper University Health Care in New Jersey launched Cooper Direct Primary Care in April 2024 with a monthly membership and no insurance billing for primary care visits. MaineHealth opened its Trellis Health membership model to employees in 2024 and to the public and employers in September 2025. Other systems, including Brown University Health, Baptist Health South Florida, Northwestern Medicine, Penn Medicine and University Hospitals, run concierge or membership programs that bill insurance alongside an annual fee.
What is the difference between a hospital DPC program and hospital concierge medicine?
In a direct primary care program, the monthly fee pays for the primary care itself and the practice does not bill insurance for those visits. In a concierge or hybrid membership program, the patient pays an annual fee for added access and services, and the practice still bills the patient's insurance for covered visits. The difference matters for Medicare participation, payer contracts and whether members can stay HSA eligible.
Can a health system's DPC program see Medicare patients?
Yes, but the structure has to fit Medicare's rules. Medicare.gov says Medicare does not cover membership fees and that doctors who accept assignment cannot charge extra for Medicare-covered services, and the HHS OIG warned about this in a 2004 alert. A program either keeps the membership limited to services Medicare does not cover while billing Medicare normally, or uses physicians who have formally opted out of Medicare and sign private contracts with Medicare patients. Opt-out applies to the clinician for two-year periods, so it is a big decision inside an employed group.
Are health system DPC memberships HSA eligible in 2027?
They can be. Since January 1, 2026, Public Law 119-21 lets people with HSAs join a qualifying DPC service arrangement and keep contributing, as long as its fees stay within a monthly limit. For 2027 that limit is 150 dollars a month for one person and 300 dollars for more than one person under IRS Rev. Proc. 2026-24. Above that limit, IRS Notice 2026-5 says an HSA can still pay a qualifying fee, but members can't make new contributions while enrolled. The Notice also says the fixed periodic fee must be the sole compensation for the care in the arrangement, so a membership that also bills insurance for the visits it includes is unlikely to qualify.
How big should a physician's panel be in a health system DPC program?
Much smaller than a typical employed panel. The AAFP reports an average panel of 504 patients in 2025 across all its survey respondents, 53% of them practicing in DPC, and KFF Health News reported that concierge physicians typically limit their practices to a few hundred patients, compared with a couple of thousand for a traditional primary care doctor. Plan staffing, revenue and space around a panel in that smaller range.
Is an employer onsite clinic the same as DPC?
Not always. An onsite or near-site clinic is a location model, and it can be paid many ways. It becomes direct primary care when the employer pays a fixed periodic fee for primary care instead of the clinic billing insurance per visit. Many health systems start with their own employees, as MaineHealth did with Trellis Health, before selling the same contract to other employers.