Healthcare delivery in Southern Oregon — and nationally — is shifting. As traditional insurance becomes less affordable and more administratively burdensome, a growing number of clinicians are moving toward Direct Primary Care (DPC) and cash-pay models. This transition is often portrayed as clinician innovation or consumer choice, but it carries structural consequences for the working middle — households that earn too much to qualify for public programs yet cannot afford rising commercial insurance costs.
This article synthesizes national trends, state policy changes, and regional workforce data to show that:
- The adoption of cash-pay primary care is accelerating and has implications for access and equity.
- Federal changes now allow Health Savings Account (HSA) funds to pay for DPC arrangements under defined conditions, opening new cost-sharing pathways.
- Oregon’s HB 2540, effective January 1, 2026, requires insurers to count certain out-of-network cash payments (including DPC fees) toward plan deductibles, lowering barriers to cash-pay adoption.
- Workforce shortages and capacity constraints make rural regions especially vulnerable to provider exit from insurance networks.
- The net effect is a system that partially solves access for a subset of the working middle, but risks stratifying care and straining safety-net providers.
Part I — National Trends: Cash-Pay and Primary Care Shifts
A. Growth of Alternative Primary Care Models
In recent years, membership-based primary care (including concierge and Direct Primary Care) has expanded rapidly. A Health Affairs analysis found that the number of concierge and DPC practice sites in the U.S. grew by 83.1% between 2018 and 2023, and clinicians working in these models increased by roughly 78.4%.
Another market analysis estimates there are approximately 2,688 DPC practices nationwide as of 2025, with continued growth driven by physician demand for autonomy and predictable revenue.
However, these practices remain a small fraction of total primary care delivery, and largely concentrated in markets where patients have the liquidity to self-pay membership fees.
B. Physician Workforce: Burnout and Shortages
Workforce constraints are intensifying. Nearly 43% of U.S. primary care physicians report feeling burned out, higher than many peer nations, with administrative demands cited as a major contributor.
At the same time, national projections suggest significant shortages of primary care physicians, with models projecting gaps ranging from approximately 20,200 to 40,400 primary care physicians by 2036 if current training and demand trends continue.
Both burnout and projected shortages affect the supply side of care delivery, making membership-based and cash-pay models more attractive for providers but also reducing the capacity of traditional networks.
Part II — Federal and State Policy Shifts Enabling Cash-Pay Adoption
A. Federal HSA Changes
In 2025, the One Big Beautiful Bill Act (OBBBA) modified federal tax rules governing HSAs, permitting certain DPC arrangements to qualify as eligible HSA expenses. Under the new law, HSA funds can be used to pay DPC membership fees, subject to limits (e.g., $150/month for individuals, $300/month for families) and regulatory guidance.
This change removes a longstanding financial barrier for individuals who combine high-deductible health plans with DPC memberships, effectively creating a tax-advantaged pathway into cash-pay primary care.
B. Oregon HB 2540 (2026)
Effective January 1, 2026, Oregon House Bill 2540 requires most health insurers to credit direct payments made by enrollees (including DPC membership fees) toward annual deductibles and out-of-pocket maximums, as long as the services paid for are medically necessary and the cost is less than a comparable in-network charge.
This policy change significantly reduces one of the key economic disincentives for cash-pay arrangements and encourages broader adoption of models where primary care operates outside the insurance claims infrastructure.
Part III — What the “Cash-Pay Surge” Means for the Working Middle
A. The Working Middle’s Dilemma
Households earning too much to qualify for public programs (such as Medicaid or robust subsidies) but not enough to comfortably afford rising premiums find themselves in a squeeze:
- Insurance is more expensive and less predictable.
- Deductibles and out-of-pocket exposure continue to rise.
- Meaningful access to primary care via insurance networks is becoming harder to secure.
People in this category may turn to cash-pay models to preserve primary care access, but this is only feasible for a subset with sufficient monthly disposable income.
B. Provider Panel Shrinkage and Local Access
Because DPC and similar cash models deliberately limit panel sizes to improve access and continuity, each clinician making this shift reduces capacity in the traditional network.
In Oregon, rural and remote areas have a primary care capacity ratio of approximately 0.69, meaning the number of providers is insufficient to meet demand. This contrasts with urban areas above 1.00, where supply approximates demand.
As clinicians opt out of insurance networks, those who cannot or choose not to join cash-pay practices compete for fewer traditional appointments, increasing wait times and driving unmet need.
Part IV — Efficiency Gains vs Systemic Stratification
A. Patient Experience in Cash-Pay Models
Cash-pay and DPC arrangements commonly offer features that traditional insurance-based primary care struggles to provide:
- Same-day or next-day access
- Longer, relationship-based visits
- Reduced administrative friction
These characteristics can reduce non-urgent use of emergency departments and improve management of chronic conditions.
However, this efficiency benefit accrues primarily to patients who can afford membership fees or leverage HSAs to mitigate cash-outlays. Policymakers should recognize that this is targeted efficiency, not universal access.
B. Emergent Stratification of Care
Without policy intervention, the growth of cash-pay medicine risks creating a two-tiered system:
- Tier 1: Patients with liquidity access high-touch, efficient primary care.
- Tier 2: Insured but under-served populations relying on stretched safety-net providers and episodic care.
This stratification imposes broader systemic costs, including:
- Greater uncompensated care burdens on hospitals
- Higher acuity and costs for delayed care
- Fragmented continuity for patients with complex health needs
Part V — Strategic Considerations for Policymakers and Executives
Healthcare leaders in Southern Oregon and beyond should consider these questions:
- How does cash-pay growth affect regional capacity planning?
Provider shifts out of insurance networks may create access deserts if unmitigated. - Can policy tools (e.g., deductible crediting, HSA flexibility) be aligned with broader access goals?
Regulatory changes that enable cash-pay options also require complementary support for traditional network capacity. - What role should public or quasi-public options play to stabilize the middle tier?
Sliding-scale or buy-in models could bridge gaps without undermining safety nets. - How can workforce policy address uneven distribution of providers?
Rural capacity ratios well below statewide averages highlight the need for targeted incentives.
Part VI — If You Are in the Working Middle: What Actually Calculates Out?
For households earning roughly 200–500% of the Federal Poverty Level — too high for Medicaid, too low for comfort — the rise of cash-pay healthcare forces a series of uncomfortable trade-offs. There is no universally “good” option, only less bad ones, depending on health status, liquidity, and risk tolerance.
Option 1: High-Deductible Insurance + Direct Primary Care (DPC)
Who this works for
- Relatively healthy households
- Families with stable income and modest savings
- People who value access, continuity, and time with their doctor
The math (typical scenario, family of four)
- High-Deductible Health Plan (HDHP): ~$300–$450/month (after subsidies, if any)
- DPC membership: ~$75–$150 per adult/month
- Annual premium + DPC cost: often $6,000–$9,000, excluding catastrophic events
What this buys
- Same-day or next-day primary care
- Predictable costs
- Reduced administrative friction
- Earlier intervention for minor or chronic issues
What it does not solve
- Specialty care costs
- Hospitalization risk
- Imaging, procedures, or oncology exposure
Bottom line
For many in the working middle, this model does calculate out if:
- Primary care access is the main bottleneck
- The household can absorb a catastrophic deductible if needed
It is a primary care optimization strategy, not full healthcare coverage.
Option 2: Traditional Insurance-Only Coverage
Who this works for
- Households with significant chronic disease
- Those who anticipate high specialty or hospital utilization
- Individuals with employer-subsidized plans that meaningfully reduce premiums
The trade-off
- Higher monthly premiums
- Opaque pricing
- Long wait times for primary and specialty care
- Frequent delays or denials
The paradox
Many insured families in this tier are technically “covered” but functionally under-treated, delaying care until problems escalate — the most expensive outcome possible.
Option 3: Fully Cash-Pay, Minimal Insurance (Highest Risk)
This option is growing quietly, particularly among:
- Self-employed individuals
- Rural residents
- Those priced out of comprehensive plans entirely
This is not a solution — it is a warning sign.
It exposes households to catastrophic financial risk and signals systemic failure, not consumer empowerment.
This Isn’t Just Primary Care: The Opt-Out Is System-Wide
Direct Primary Care is simply the most visible edge of a much broader phenomenon.
Across Southern Oregon and nationally:
- Specialists are shifting to cash-pay consults and procedures
- Behavioral health providers are exiting insurance networks
- Chiropractors, physical therapists, and integrative providers are increasingly cash-only
The reasons are consistent across disciplines:
- Low reimbursement rates
- High administrative burden
- Delayed or denied payments
- Loss of clinical autonomy
This is not ideological. It is operational.
Who Actually Benefits When Providers Opt Out?
Providers
- More predictable income
- Smaller panels
- Lower burnout
- Higher job satisfaction
From a workforce perspective, cash-pay models often retain clinicians who would otherwise leave practice entirely. That benefit is real.
Patients (Selective)
- Better access
- Longer visits
- Improved satisfaction
- Earlier intervention
But this benefit is income-gated.
Insurers
Ironically, insurers may benefit indirectly:
- Fewer primary care claims
- Risk shifted back to patients
- Narrower networks normalized
What looks like “consumer choice” can also function as cost offloading.
Are Outcomes Actually Better in Cash-Pay Care?
The honest answer: sometimes — but not universally, and not cheaply.
What the data supports
- Improved patient satisfaction
- Better chronic disease monitoring in primary care
- Reduced non-urgent emergency department use in DPC populations
What the data does not yet prove
- Superior long-term outcomes across populations
- Cost savings once specialty and hospital care are included
- Equity-adjusted system-wide benefit
In other words:
Cash-pay models improve experience and access for those who can afford them.
They do not, by themselves, fix healthcare affordability or population health.
How to Slow (or Redirect) the Expansion of Cash‑Pay Care
To reduce the structural pressures pushing clinicians toward cash‑pay, solutions must operate on multiple fronts simultaneously: payment reform, administrative burden reduction, viable mid‑tier coverage, and hybrid delivery models. Below are the most promising strategies, with real examples from the U.S. where available.
1) Administrative Reform
What it means:
Administrative burden — prior authorizations, coding complexity, claims appeals, and documentation requirements — is a key driver of provider burnout and exits from insurance networks. Reducing this burden can make staying in traditional insurance networks more feasible.
Examples & Options:
A. Simplify Prior Authorization and Documentation
- National discussions — including AMA and Medicare policy dialogues — are increasingly focused on streamlining authorization and reducing unnecessary paperwork that saps clinician time. While there’s no single federal solution yet, this is the direct target of multiple CMS and stakeholder initiatives that aim to reduce non‑value administrative work.
B. Align Coding & Reporting Across Payers
- States and payers can work to unify reporting rules, reducing the need for multiple documentation formats and targets. Colorado’s Alternative Payment Model Alignment Initiative, for example, is a multi‑payer effort designed to align payment and reporting requirements across insurers to reduce administrative friction for providers.
C. Support for Team‑Based Care Infrastructure
- Reimbursement that supports hiring care coordinators and advanced practice clinicians (e.g., nurses, social workers) can reduce the work falling on physicians’ desks — a driver of burnout that makes cash‑pay models more attractive.
2) Transition Away from Fee‑for‑Service (FFS) Toward Value & Capitation
Problem with FFS:
Under fee‑for‑service, clinicians are paid for volume — the number of visits, tests, or procedures — which drives up overhead, adds administrative complexity, and is a root cause of burnout and network contraction.
Better paths forward include:
A. Medicare & Multi‑Payer Alternative Payment Models (APMs)
- ACO Primary Care Flex Model (nationwide, optional) provides prospective payments to primary care within the Medicare Shared Savings Program, encouraging team‑based and preventive care rather than volume.
- Making Care Primary (MCP) is a multi‑payer model starting in 2024 to transform primary care payment toward enhanced capitation and reward outcomes rather than procedure counts.
These models show how payment can shift from “bill for every service” to “invest in population health,” which directly reduces FFS incentives that drive costs and administrative burden.
B. Value‑Based Reimbursement in Medicaid
Several states reimburse primary care at or above Medicare levels or tie payments to quality and outcomes:
- New Mexico, Montana, Alaska, Maryland, Vermont, Indiana, North Dakota, and Wyoming reimburse primary care at or above 100% of the Medicare rate in their Medicaid programs.
- Arizona uses directed payments to boost primary care reimbursement by 15%.
These examples show policy levers that increase financial viability for practices in traditional systems, reducing the incentive to go cash‑only.
3) Viable Middle‑Tier Coverage Options
One of the strongest pressures pushing patients into cash‑pay is that traditional commercial coverage often feels less accessible — high deductibles, narrow networks, long waits — while safety‑net programs are only available to low‑income populations.
Solutions that can help stabilize the middle tier include:
A. State Public Option Models
Several states have or are implementing public option health plans that are more affordable than private plans and could preserve network depth while maintaining broad coverage.
- Colorado and Washington passed public option laws to create lower‑cost alternatives to commercial insurance. These are designed to lower premiums, increase competition, and keep provider networks intact.
Public options do not eliminate private insurance but provide another choice that aligns more closely with affordability and coverage continuity for the working middle.
B. Basic Health Programs (BHPs) and State Innovation Model Examples
Programs like Connecticut’s SustiNet (which aimed to provide near‑universal affordable coverage) offer a historical example of how states have tried to create affordable mid‑tier plans that sit between traditional Medicaid and commercial insurance.
4) Hybrid Models: Blending Cash and Traditional Payment Streams
Rather than a binary choice — cash‑only or full insurance — hybrid models can capture some of the best features of both.
A. DPC‑Plus or Partnership Models
Some practices use a Direct Primary Care model for primary services while still billing insurance for services like:
- Chronic Care Management (CCM) codes
- Transitional Care Management (TCM)
- Preventive services and specific procedures
This requires careful compliance work but allows practices to maintain revenue while offering patient‑centric access.
B. Employer‑Sponsored DPC Contracts
Large self‑insured employers increasingly contract directly with DPC networks for their workforce, paying per employee per month (PMPM), with shared‑savings incentives tied to total cost outcomes (ER use, specialist referrals). This creates a hybrid system where DPC acts as a primary access layer but is integrated into broader coverage.
5) Workforce Models That Improve Retention and Reduce Burnout
Shifting away from FFS and reducing administrative burden is part of a broader workforce strategy that includes:
A. Care Team Models and Medical Homes
Innovations like the Patient‑Centered Medical Home (PCMH) or team‑based approaches reward care coordination and outcomes, not volume. These models explicitly support workflows that reduce clinician burnout by delegating tasks across teams.
B. Multi‑Disciplinary Payment Models
Alternative payment models often include funding for behavioral health, community health workers, and care coordination — roles that distribute workload and keep clinicians from being overwhelmed by paperwork and acute tasks.
For example, under the CMS Making Care Primary and other APMs, payment is tied to population health metrics, supporting investments in teams rather than just physician visits.
These approaches help clinics remain in insurance networks while offering more predictable revenue and lower burnout.
6) Community and Cooperative Insurance Models
While less common, community health cooperatives and sliding‑scale clinics show how communities can pool risk and purchasing power to improve affordability and access.
For example, the Ithaca Health Alliance in New York is a cooperative model where members pool funds and negotiate with providers for discounted services — a grassroots alternative to standard insurance.
This is not a large‑scale solution but illustrates the potential for “membership plus pooled risk” approaches outside traditional insurance.
7) Public Engagement and Policy Realignment
Slow expansion of cash‑pay services also requires broad policy engagement:
- Policymakers can mandate transparency and comparability across payers to reduce administrative complexity.
- States can use multi‑payer collaboratives to align quality measures, billing requirements, and payment models, reducing provider burden across commercial and public markets.
- Medicaid waivers and state innovation plans can explicitly incentivize states to invest in primary care and team‑based reimbursement rather than volume‑based payment.
These align incentives toward quality and continuity, undercutting a key driver of the cash‑pay trend.
Summary: A Multi‑Layer Policy Response
No single policy will “stop” cash‑pay growth — but a coordinated strategy can minimize its pressure on providers and patients:
| Strategy | What It Addresses | Example |
| Administrative reform | Reduces burnout, improves clinician retention | Colorado APM Alignment Initiative |
| Hybrid payment models | Captures benefits of value and continuity | Medicare ACO PC Flex, MCP pilot |
| Middle‑tier coverage | Keeps working middle in comprehensive systems | Public options in Colorado & Washington |
| Workforce incentives | Reduces burnout, supports team care | PCMH & team‑based payment models |
| Cooperatives & pooled risk | Grassroots alternatives | Ithaca Health Alliance |
The Core Question Policymakers Must Answer
The rise of cash-pay healthcare is not a moral failure — it is a market signal.
The question is not:
“Should cash-pay care exist?”
It is:
“How many people must be priced out before the system intervenes?”
For the working middle, cash-pay care is often a rational response to limited options.
For the system, it is a warning light — not a solution.
What This Means for Southern Oregon Leaders
For Southern Oregon, slowing cash‑pay expansion won’t look like reversing the trend — it will look like creating viable alternatives that preserve access, reduce burnout, and offer coverage that feels real for the working middle. Combining reforms at the payment, administrative, and coverage design levels will create a system where clinicians can stay in networks, patients can access care without undue financial strain, and the underlying drivers of cash‑pay exit lose their force.
If you want, I can turn this into a policy action grid with recommended next steps, stakeholders, and legislative timing tailored specifically to Oregon’s healthcare governance process.
Conclusion
The shift toward cash-pay and DPC is not inherently negative — it reflects clinicians adapting to system dysfunction and patients seeking more predictable access. But as a system-wide force, it has implications that extend beyond individual practices.
For executives and policymakers, the key question is not whether these models can exist — they already do and will grow — but how they intersect with affordability, equity, and sustainable access for all households, especially the working middle. Understanding this dynamic today allows Southern Oregon to lead with strategy rather than react to fragmentation tomorrow.