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There are three primary revenue models in family medicine. This is a brief overview what they are and how they impact what your job might look like.

1. Conventional Fee-For-Service (FFS)

How the Money Works: This is likely what you’ve seen in residency. You care for a patient and based on what happens during the appointment, a fee is assessed. Insurance is involved roughly 19 in 20 times. They reimburse the practice at negotiated rates for the services rendered. It’s also called Pay-Per-Services.

Daily Patient Volumes: Typically 20-22. The extremes are 16-18 and 25-27.

Panel Sizes: Typically 1,500-1,700. The extremes are around 1,200 to 2,000.

Patient Ages: All of them, often varying based on that community’s needs.

Patient Insurance Panels: Private practices are around 65-75% Private Insurance; 25-35% Medicare; 0-5% Cash/Direct Pay; 0% Medicaid. Hospitals and Health Systems care for patients with Medicaid.

Bonus Structures: Bonuses are based on things like production, billing, collection, or RVUs. They are theoretically uncapped.

Market Trends: This has been the standard model for many years and is the way most practices operate. Market share is decreasing but not at a spectacular rate.

Endorsements and Criticisms:

Advocates love getting to care for more patients who have a variety of backgrounds and needs. It usually pays the best, too.

Critics claim that it lowers quality of care by incentivizing volume which also leads to burnout. Dealing with Health Insurance companies burdens practices.

2. Value Based Care (VBC)

How the Money Works: Insurance companies estimate how much a person’s annual healthcare spend should be based on historical data and that person’s health history. If you, as their primary care physician, help the insurance company spend less than that benchmark, they pass some of the savings along to you as compensation. It’s sometimes called Value-Based Payment.

Daily Patient Volumes: Typically 10-12.

Panel Sizes: Around 400-450.

Patient Ages: Geriatric only.

Patient Insurance Panels: Medicare Advantage Plans only.

Bonus Structures: Bonuses are based on quality metrics (e.g., disease detection, hospitalization rates). Bonuses have a maximum amount.

Market Trends: The biggest insurer that offers VBC is Medicare Advantage plans. Some private insurances offer VBC. If a practice is exclusively VBC, then it is a geriatric only opportunity. VBC started around 2008-2010 and has yet to catch fire like anticipated.

Endorsements and Criticisms:

Advocates love aligning compensation incentives with quality of care and having a lower daily patient volume.

Critics don’t like age restrictions and capped bonuses. As one physician put it, “It’s like a judge getting paid based on how many crimes are committed.”

3. Direct Primary Care (DPC)

How the Money Works: Patients pay a subscription fee directly to the practice. A typical fee is anywhere from $1,850 to $3,000 annually. No insurance is involved.

Daily Patient Volumes: Typically 8. The extremes are 6 and 10-12.

Panel Sizes: Typically 400. The extremes are around 300-600.

Patient Ages: Adult only with the very rare pediatric patient.

Patient Insurance Panels: Most have private insurance for

Bonus Structures: Bonuses are based on panel sizes.

Market Trends: DPC is the fastest growing segment of the three. It started in 2009 with Dr. Garrison Bliss. It really gained traction post-COVID. The momentum will slow at some point. Private Equity has been breaking into DPC. The majority are still small (especially solo) practices. Most new practices are DPC because it’s easier and simpler.

Endorsements and Criticisms:

Advocates love longer patient appointments and lower administrative burden. They’re often quick to claim that it is a much higher quality of care than a conventional FFS practice.

Critics claim that you’re only serving the affluent. Increased access to care (especially the not-uncommon constant call) worries those switching from FFS. Interestingly, it is seldom a complaint from those practicing DPC.

3.5 Combinations

These revenue models sometimes exist in their purest forms. Combinations are much more common.

• FFS and VBC
  • Most common by far. The majority of patient care and revenue is FFS. A handful of their patient’s insurances offer VBC so they do that a little.
• FFS and DPC
  • Second most common. The practice is likely a conventional FFS group that added a premium, DPC concierge option; or a concierge DPC practice that bills insurance for a slight boost in revenue.
• DPC and VBC
  • Uncommon. DPC’s advantage is not dealing with insurance while VBC is very involved with insurance. This contrast makes this group near-unheard of.
• FFS, DPC, and VBC
  • Exceedingly rare. They’re likely a medical corporation or health system that are trying to capture all possible revenue sources.

What about Concierge Medicine?

Concierge Medicine means different things to different people who often are very sensitive about the vocabulary. Tread carefully. In terms of revenue models, Concierge Medicine is always:

(1) Direct Primary Care

(2) Value Based Care OR

(3)  A combo of DPC and FFS that leans so heavy DPC, it is basically just DPC

This article was written by Brett Hoffman and Ben Kennedy at ETS Family Medicine without the use of artificial intelligence.

It was originally published on September 22nd, 2025 and later updated on January 5th, 2025.