Employers continue to struggle with rising health care costs. Some have become almost desperate to find options that are valuable to employees, reasonable to manage, and affordable. Direct Primary Care, or DPC, has generated a lot of recent interest because it positively addresses all three concerns. DPC is a hot new trend, but it’s not necessarily a panacea. So what does that mean for benefits brokers?
What is DPC?
The Direct Primary Care Coalition describes DPC as “an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee.” Providers who participate in a DPC network do not accept insurance. There are no traditional insurance premiums or co-pay fees. Instead, individual patients pay a monthly fee – typically in the $50-$100 range. With workplace-sponsored DPC programs, employers usually pay the patient’s membership fee.
That fee covers all wellness checkups and other routine care. In addition, patients pay only wholesale prices for lab tests and medications. DPC networks across the country include a range of providers, including family medicine practices, internists, and pediatricians. Some also offer 24/7 emergency services and/or free remote visits. Medical industry experts suggest that primary care providers can handle 75% of most patients’ health care needs.
Advantages for all
Primary care providers, employers, employees, and brokers can all benefit from the DPC model. The Coalition says DPC results in:
- Better health outcomes. Patients have easy access to their doctor with same- or next-day appointments. With more thorough routine checkups, doctors report they are doing a much better job of detecting early signs of potentially life-threatening issues — pre-diabetes, pre-cancerous conditions, even liver problems. Health care expenses for diabetic employees run about $10,000 per year above average.
- Enhanced patient experience. Providers can spend as much time as they want with each patient, rather than being beholden to a crowded appointment schedule.
- Lower costs.
Physicians who choose not to contract with insurance providers no longer have to play by their rules. On average, a Direct Care practice can break even by serving just four patients per day. Under the fee-for-service model, docs/clinics have to see at least 32 patients each day. That dramatic difference translates into time doctors can spend with each patient, developing a stronger relationship with them and learning in depth about their personal lifestyle and health challenges.
For employers, some of the cost savings are direct – membership fees are far lower than insurance premiums because there are no third-party fees or “mark-ups” involved. And there are fewer referrals to specialists and unnecessary tests, both of which are key contributors to the high health care costs. Indirectly, companies save by eliminating insurance billing and related administrative tasks.
In fact, companies that have already switched to Direct Primary Care for at least some of their employees say they are saving 40% over traditional health care insurance. One large employer trialed DPC for 6 months and reported they spent $96,000 but saved more than $221,000 in overall costs.
Employees benefit, too. They can save time and hassle visiting a doctor, save money on visits, lab tests and medications. That all-around better experience boosts satisfaction with their company’s benefits program, and it can elevate the employer in the eyes of potential new hires.
The downside
It’s hard not to like an alternative that saves time and money and generates increased employee satisfaction. Nonetheless, there are some noteworthy concerns as employers struggle to determine if this is a viable alternative for their business and workers. DPC is, after all, still a new and very different approach to employee health coverage. And it is not for everyone, in any event.
As the name implies, DPC is a stand-along service that provides only primary care, not emergency services, hospitalizations, etc. Typically employers resolve this by also offering employees a high-deductible, low-cost major medical plan. This simple solution also makes DPC a viable option for small employers.
A DPC practice could become overly-dependent on a single employer, if the majority of their patients work there. Ostensibly, that could put them at a disadvantage in negotiating membership fees, or it could put their practice at risk if the employer changed their mind about offering DPC as a benefit.
For brokers, Direct Primary Care puts another resource at your disposal. It is a distinctly different alternative you can offer prospects and existing clients, one that could bring them all the benefits noted above. However, because DPC is so different, you will need to determine if you want to offer it and, if so, how you will present it.
You’ll have to educate before you can sell DPC
Advisors/brokers must position themselves at the leading edge of insurance trends. Otherwise, how can you adequately advise prospects and clients or help them compare options?
When it comes to Direct Primary Care, you’ll need to educate yourself first. DPC may be trending upward, but it is still relatively new. That means you have an opportunity to get ahead of the competition by offering something they do not. However, it also means the employers you advise are unlikely to be familiar with DPC.
There is no point in even mentioning DPC to clients until you’re fully prepared. Is it a good match for your agency? You can’t afford to go off on a tangent, no matter how great DPC may be. Your own business success depends on offering choices to meet the needs of varying clients. One size does not fit all, especially when it comes to benefits programs. To attract and retain good employees, businesses must offer options custom-tailored to their workers.
DPC may not be the best choice for certain companies. They may not be ready to make the fundamental shift to self-insurance. They may not want the greater hands-on management required, even though they will save administratively in other ways. There may not even be a DPC physician group nearby.
You need a plan.
Successful selling today focuses on helping, not just comparing premiums. The advisory aspect of your role as a broker is critical. Because DPC is so different, you may want to introduce the concept to clients now, gradually educating them on the pros and cons. That way, when it’s time for them to renew their insurance, they will be well-equipped to make an informed decision about switching. If, in fact, that’s what they want to do. Meanwhile, you still have to be able to help them with the rest of their HR/benefits needs, including choosing and using technology and assuring compliance.
As a benefits advisor, you know that, even when employers offer valuable options, employees don’t necessarily take advantage of them. So once a client decides to try DPC, your educational role expands, to help the company explain to their employees what direct primary care is all about and what it can mean for them if they participate.
The jury is still out regarding the future of Direct Primary Care, but it is a trend that is gaining momentum. To successfully ride the wave, brokers will need to become DPC experts.
