Are Patients Also Customers and End-Users?

Many doctors reject framing patients as customers and yet no industry exists without customers to buy their products and services. Most doctors (~80%) today are salaried employees of large fee-for-service providers who bill insurers for services and products. In this context, insurers are providers’ primary customers because they pay ~70% of all medical bills. By contrast, patients function like end-user customers who pay an out-of-pocket access fee amounting to approximately 10% of their medical bills.

Patients are end-users more than customers with fee-for-service providers where insurers are the primary customers. They fair better with DPC where they are the primary customers and insurance is excluded.

Are patients also customers? Reality check: If we are employed, then our employer’s customers are our customers, whether we like it or not. It is no abstraction. Customers are integrated into business systems, practices, pricing, and customer service policies. Businesses usually rank customers by their revenue and profit contributions.

In healthcare contexts, fee-for-service providers similarly use Diagnosis-Related-Groups (DRG), diagnostic ICD-Codes, and procedural CPT Codes to bill insurance and patients for services. These codes serve the providers’ primary customers, insurers, who use them to control costs by constraining treatment options through contracts and prior authorizations. Patients rank far below in influence and importance given their comparatively smaller revenue and profit contributions. It is not surprising, therefore, that insurers fair better than patients when their conflicts collide.

By contrast, patients fair better with providers like Direct Primary Care that rely on membership models and exclude insurance. DPC patients pay a monthly membership which makes them the most influential customers of the practice. It helps explain why patient satisfaction with DPC is much higher than the dismal numbers associated with the broader industry.