In 20 years as an employee benefit consultant, I have heard the employees of my clients respond more positively about direct primary care than virtually any other new employee benefit. As you may know, direct primary care is an emerging type of healthcare for which you pay a monthly fee and don’t use insurance. This approach is designed to produce better care and lower costs since doctors and patients avoid bureaucratic complexity and costly claims processing. As of 2017, nearly 3% of family physicians operated direct primary care practices, according to survey data from the American Academy of Family Physicians (AAFP).
I expect this number to grow as many related trends are converging to give primary care delivery a major boost, such as the ever-present rising healthcare costs, the increase in high-deductible health plans (HDHPs) and the popularity of telemedicine.
Some employers are facing enormous health plan cost increases while others are enjoying more modest ones, but nearly all employers are facing them. It’s a universal problem that we must deal with every year.
A tight labor market has made it difficult for employers to cost shift health plan expenses to employees by increasing deductibles. Even though the economy has improved, employees continue to struggle with the financial burdens of their HDHPs. Direct primary care helps employers and employees address both of these issues.
Because HDHPs help transfer cost accountability to consumers, these plans have people craving lower-cost services. Employers can use the delivery of lower-cost solutions as a way to help their employees deal with rising out-of-pocket expenses.
You can use direct primary care by itself or pair it with a low-cost insurance policy, such as an HDHP. Such a combination provides coverage for large medical expenses as well as quality medical care for routine doctor visits.
The direct primary care trend should increase because HDHPs are continuing to grow, according to the 2017 Benefitfocus "State of Employee Benefits" report. Manufacturers lead the way with 61% adopting them. The percentage of education industry employers offering HDHPs doubled to 44% over the past year. Slightly more than half of healthcare employers offered an HDHP, which was up from 37% in 2016, and HDHP adoption also increased 30% among retail employees over the past year. Overall, 29% of American employees have high-deductible plans, according to the 2017 survey by the Kaiser Family Foundation.
Services like telemedicine play to the strengths of direct primary care, which allows doctors the flexibility to communicate with patients by phone, email or video chat because they don’t need an in-person office visit to get paid. Some problems still need an in-person visit, but with direct primary care that decision can be made for medical, not financial, reasons.
In a direct primary care arrangement that I recommend to my clients, members start the care process with a video visit, and most of the time patients’ healthcare concerns can be resolved at this time. When a face-to-face visit is required, a nurse practitioner visits the patient at their home. Once in the patient’s home, the practitioner can conduct a thorough examination which includes lab work and x-rays when required.
High claimants are driving the rapid increase in the cost of healthcare. Patients are putting off care because they don’t want to incur the expense of addressing care early. As members of a direct primary care clinic, employees and their family members receive unlimited access to the provider’s services.
This approach can provide employers an immediate reduction in their health plans’ primary care claim costs. Employers should analyze their claims data to project the instant savings they would achieve from the program.
High-cost claimant frequency should be reduced by the program as well. Similar to wellness programs, it is difficult for an employer to prove the program reduces health plan shock losses, but common sense tells us that if we reduce the cost barrier to accessing care, people will address their health conditions earlier, maintain that level of care, and prevent a catastrophic event.
Employers should develop a communication strategy that creates and sustains awareness of the program. Using the direct primary care provider for flu shots or health screenings will help introduce the providers to the employee population. Integrating with a wellness program will not only increase the awareness and utilization of your direct primary care program, but also create a unique opportunity to get healthcare professionals directly involved in driving the desired results of your wellness program.
To learn more about how direct primary care can reduce the impact that healthcare costs are having on your business and your employees, please contact us.
Brian works with employers to design a well-rounded employee benefits program that will benefit their employees.
Brian works with employers to design a well-rounded employee benefits program that will benefit their employees. He brings a wealth of experience and talent to help employers understand how to best structure, fund, implement and manage their employee benefits program. He helps business owners, executives and employees meet current needs and plan for future goals. He has worked with employers of all sizes and from varying industries.
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