This isn't really true. My parents build a house with a large fireplace in the living room. True enough it actually sucked warm air out of the house (tall chimney) and made the whole house colder.

My folks simply bought a really nice fireplace insert. It works extremely well. These are not uncommon, even in the south, and my parent's place is far from 'off grid'. They absolutely do use it to 'heat the house', and we only supplement with radiant heaters in the far bedrooms.