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Friday, 19 July 2019 09:47

Saving Money with Direct Primary Care

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Direct Primary Care (DPC), aka “concierge medicine,” is an alternative provider payment model gaining traction with employers who are tired of high health insurance rates and their employees not receiving the care they need. Instead of billing the insurance carrier for routine care, DPC providers usually charge a monthly flat fee which allows the member access to unlimited routine services such as laboratory services, same-day or next-day appointments, and sometimes even house calls. The savings generated by this model can certainly benefit companies, especially those that are self-funding their plans.

If you’re looking at adding Direct Primary Care as a solution to rising healthcare costs, there are a few things to understand and consider first. First, the advantages:

  • DPC proponents cite an enhanced patient experience. According to the Colorado Health Institute, “each DPC provider maintains a panel of 600-800 patients, compared with 2,300 in the panel of a traditional primary care provider.” Also, “traditional primary care providers typically spend about 12 to 15 minutes with each patient for routine visits, but Direct Primary Care visits are often between 30 and 60 minutes" (Colorado Health Institute). DPC members can usually get same-day appointments, report little or no wait time to see their doctors, and their providers may know their medical histories better due to their smaller patient load. DPC models typically offer virtually unrestricted 24/7 access to their providers via telemedicine, e-mails, and phone calls.

  • DPC can potentially generate better health outcomes. DPC can cut down on visits to high-cost places of service such as the hospital and emergency room. Under a traditional arrangement, members with complications arising from potentially preventable conditions like diabetes and heart disease may have no choice than to visit the emergency room or hospital. “For those with chronic health problems that need close monitoring, such as diabetes or heart disease, having access to DCP services can be especially cost-effective and convenient” (Consumer Reports).

  • Lower Costs: The savings generated by a DPC arrangement can be substantial, and there are no third parties or fee-for-service billing to drive up costs under the DPC either. The DPC arrangements have less overhead and more time due to cutting the insurance carriers out of the process, and the savings generated by this model can be especially beneficial for self-funded employers who usually pay a portion of their claims costs.

There are also a few cautions to be aware of before selecting a DPC model:

  • DPC is not a replacement for traditional health insurance, as the care received by a DPC provider is routine and not emergent in nature, nor can surgeries and advanced or catastrophic treatment for many serious health concerns be included in a DPC arrangement. This type of service works best as an add-on to an existing insurance plan, and the savings come from the routine care costs being handled through the DPC instead of through the insurance carrier.

  • DPC models are also not held to the same regulatory standards as traditional insurance plans. This “means DPC patients mostly lack the consumer protections mandated by the Affordable Care Act, such as pre-existing conditions and prohibitions against charging more based on gender” (Consumer Reports).

  • Adding DPC will probably not lower your costs immediately; rather the potential cost savings would be seen over time. You make the initial investment that will hopefully pay off in a few years’ time as members get used to the new provider arrangement and then run the vast majority of their care through their DPC doctor.

The cost of adding DPC is roughly $50-$150 per member per month, usually paid by the employer. To generate the savings needed to pay for DPC, the employer might move to a higher deductible/out of pocket max plan that costs less in premium. The employer can also pay for a portion of the DPC option and ask employees to contribute to the cost as well. Employers can also raise their deductible and add in a Health Reimbursement Arrangement (HRA) to further lower plan premiums and reimburse only the employees that need more healthcare outside the DPC arrangement. 

Direct Primary Care is not a good fit for every organization, but it’s worth a look. The Colorado market does have some Direct Primary Care options such as PeakMed, Nextera and Paladina Health to name a few. If you are interested in learning more about Direct Primary Care and if it’s a good fit for your organization, please reach out to Fall River for a free consultation!

Read 168 times Last modified on Wednesday, 31 July 2019 10:44