The Unsustainable Economics of Direct Primary Care Revealed Through Advocate MD Crisis
Advocate MD, a Wisconsin-based direct primary care provider offering affordable monthly membership healthcare services, faces potential financial collapse under mounting debt despite the growing popularity of its subscription-based model. This crisis reveals fundamental flaws in the economics of alternative healthcare delivery systems across the state’s struggling rural communities. In a particularly worrying sign of the company’s deteriorating finances, a debt of $1,258.95 that is 21 months old remains unpaid, suggesting that suppliers are not being compensated for their services.
The Membership Model's Hidden Costs
Advocate MD launched in 2021 by Nicole Hemkes with a promise that resonated with both patients and physicians: eliminate insurance paperwork, reduce overhead, and provide comprehensive primary care for a transparent monthly fee ranging from $79 to $129. The model attracted a large number patients across its three Wisconsin locations by early 2024.
However, financial records indicate the company has accumulated debt while generating only paltry revenues. This precarious financial position stems from several factors, including higher-than-anticipated operational costs and the challenge of maintaining adequate cash flow with a membership model that doesn’t account for the intensity of services some patients require.
While the monthly membership fees create predictable revenue, they don’t adjust for patients who require significantly more resources.
Evidence of the company’s financial situation reveals additional troubling patterns. Suppliers have come to light that have legitimate bills that are almost 2 years overdue in a sign the company might be trading whilst insolvent.
Broader Implications of Advocate MD's Financial Troubles
Advocate MD’s struggles raise important questions about the viability of healthcare innovation in the current regulatory and economic environment. While the direct primary care model has attracted significant attention from both patients and physicians seeking alternatives to traditional healthcare delivery, the financial realities have proven challenging.
Nationwide, approximately 1,600 direct primary care practices operate across the United States as of early 2025, according to data from the Direct Primary Care Coalition. These practices serve an estimated 500,000 patients, representing a small but growing segment of the primary care market.
Some direct primary care practices have found success by implementing tiered membership models that better account for varying levels of service utilization. Others have created hybrid models that maintain the membership approach for routine care while incorporating traditional insurance billing for more complex services.
For Advocate MD, such pivots may come too late. The company has engaged financial restructuring consultants and is exploring potential partnerships or acquisition opportunities. Sources familiar with the discussions indicate that several larger healthcare systems have expressed interest in acquiring Advocate MD’s patient base, though not necessarily in maintaining the direct primary care model.
Consequences Are Dire
As Wisconsin’s healthcare landscape continues to evolve, the fate of Advocate MD may serve as a bellwether for similar practices nationwide. The company’s experience highlights the challenges of healthcare innovation in a system predominantly structured around insurance-based reimbursement models.
As Advocate MD navigates its financial challenges, the broader conversation about healthcare reform continues. The company’s experience offers valuable lessons about the complexities of healthcare economics and the challenges of disrupting entrenched systems.
