DPC and Employers: More Patients, Better Benefits, at a Lower Cost

Many direct primary care (DPC) practices find partnering with employers allows them to acquire patients faster while still maintaining DPC’s unique benefits. Although there are strong critiques of the third party payor system in Direct Care, it's important to remember that the key innovation of this model is in realigning incentives between the provider and their patients. This article will explore the case for contracting directly with employers, and conclude with an exploration of the things that make DPC particularly attractive for employers large and small.

 

Why DPC?

For both physicians and patients, DPC has proven to be a dramatic improvement over fee-for-service medicine. Physicians gain more autonomy, mastery and satisfaction, while patients get better access and improved health outcomes. However, DPC is still a young movement and many practices struggle to fill their panels by acquiring patients one at a time via direct-to-consumer marketing. If your practice is in this situation, partnering with employers in your community may be a great solution.

Because DPC was originally conceived as a payment model that eliminates third-party-payer involvement, and employers can be interpreted by some as yet another third party, selling directly to employers may make some DPC purists uneasy. In practice, however, working with employers is a win-win. With the right structuring and communication, physicians can still deliver the low-cost, high-quality care they’ve come to expect of DPC and employers can provide a valuable benefit to their employees, all while reducing the cost of their health care!

Why Work with Employers?

Working with employers makes it easier to attract patients, which is especially valuable to physicians running an independent practice outside the corporate hospital or insurance-funded systems. Partnering with employers gives these practices an easier path to growth, creates more affordable health care in a community, and enables the DPC physician to become a health care advocate in their community.

 

Easier Path to Grow

Since DPC doctors must make enough revenue to keep their practice operating, it’s important that they fill their panels as quickly as possible. Some practices accelerate this growth by taking patients with them when converting an existing fee-for-service practice to DPC. For doctors who are blocked from taking patients due to non-compete agreements, or who are new to independent practice, securing patients one-at-a-time can be challenging. Landing a few large employers can be the shot in the arm these clinics need to reach cash flow break-even. At Hint, we’ve helped DPC practices service many medium-sized employer contracts, including one covering over 1,300 patients! When selling directly to employers, a single successful sale can mean hundreds of new patients.

 

More Affordable Community Care

Employers are ecstatic when they can draw clear conclusions about their workforce, especially when it comes to the health of their employees and efficacy of their healthcare spend. DPC practices have more access and resources to track metrics that demonstrate the improvements this care delivery model has on a population, which allows employers to see how the health of their employees improve. This is helpful not only for a specific workforce, but on an even larger scale benefits the DPC movement as a whole, with each success providing another proof point for everyone operating this model.

One way DPC practices can easily show this success is by working with employers to look a claims data for employees enrolled in Direct Care vs. those who choose to opt-out. This type of side-by-side comparison is powerful evidence a practice can use when courting future employers. It also provides great PR material, proving that the practice is making local health care more effective and affordable for everyone in the community. Many doctors find this especially impactful because they get to heal more than just patients: they can benefit the whole community!

 

Become a Respected Health Care Spokesperson

Working with employers gives physicians the ability to become spokespeople for improvements in health care, which can have wide-reaching impacts on how health care is financed and delivered.

Many employers have a poor understanding of the back-end mechanics around health care because they get information from sources who aren’t incentivized to improve the health care system. For example, insurance brokers are a common touch point for employers, but they benefit by maximizing a plan’s cost to increase their commission. Working directly with employers in the DPC model has the valuable side-effect of creating trust, which benefits both the DPC doctor’s reputation and improves the health care system as a whole.

 

What Employers Want

Simply put, employers want high-quality and affordable benefits for their workforce, which is exactly what DPC provides. However, some employers are more ready to make the internal strategic decisions necessary to implement DPC than others. It’s important to know the specific needs of an employer before pitching a DPC health care plan to them. Their interest in working with a DPC practice will depend on how much they prioritize these three elements:

  • Lowering their health care costs.
  • Increasing the health of their workforce.
  • Providing additional voluntary benefits to employees.

 

Lowered Expenses

For most employers, employee health benefits cost an exorbitant amount, second in size only to salaries, so they are always looking for ways to address the rising cost of health care.

Over 800 employers in the U.S. currently employ a physician on-staff because it’s less expensive than getting primary care from within their community. One dramatic example of on-site care is the Rosen Hotels in Orlando, which has provided their own physician to employees for over 20 years and is a great model for how a DPC practice could develop a working relationship with a company. DPC practices can see patients as frequently as needed at no additional cost, which is precisely what employers like Rosen Hotels desire.

 

High-Quality Benefits

Employers increasingly realize that a healthy workforce is a more productive workforce. In addition to the hard numbers that show how affordable health care directly impacts the bottom line, employers are also exploring metrics that show how health care indirectly affects employee effectiveness. These include both “absenteeism,” which measures how often an employee is absent from work, and the newer “presenteeism,” where the employee is physically at work, but their mind is somewhere else. Both of these issues often stem from an individual’s medical problems: workers will be absent from work when they’re sick and will be unproductive at work when experiencing physical ailments or behavioral health issues. Additionally, employers increasingly recognize the link between an employee’s health status and that employee’s tendency to have a workplace injury that results in workers’ compensation. Everyone benefits when an employee is healthy—a fact that employers are noticing more and more.

Under the current health care model, many employers feel antagonistic towards health care providers. Hospital systems typically incentivize their physicians to deliver more care than is needed, via referral quotas and other utilization-based compensation metrics. Fee for service physicians are also naturally incentivized to see patients in office visit settings as much as possible, which has led to at least one case1 where hospital employed physicians have unnecessarily certified employees as disabled or unable to work.

This trend of unnecessary care can force an employer to keep an inventory of standby workers in case their production force is unable to work, which justifiably frustrates employers. With DPC, however, physician interests are aligned with patients to keep individuals healthy, which also aligns with business interests, so everyone feels more comfortable and has a higher degree of trust.

 

Voluntary Benefits

Employers will be the first to say that their company is unique, and that uniqueness expands to their health care needs as well. Depending on factors like location, size, and industry, they may wish to provide specific health care benefits for their employees. In some instances, the standard DPC model may not be robust enough to provide the employer’s desired benefits. In these scenarios, employers might choose a health care plan based on the available employee-paid “voluntary” benefits.

A DPC practice could benefit from tailoring voluntary benefits to the employer’s needs. For example, employees who work in an office building might benefit more from voluntary benefits dealing with long-term repetitive injuries like poor posture and carpal tunnel, while a job that demands physical labor might tailor its voluntary benefits to instances of trauma. Physicians know better than anyone that every patient has a unique situation that would benefit from unique coverage.

 

How to Approach Employers

Fortunately, many DPC pioneers have experimented with strategies in the direct-to-employer model and are eager to share their findings to improve the overall health care landscape. In general, they’ve found the most successful strategies to be:

  1. Weave yourself into the local business community.

  2. Partner with an insurance broker whose economic model incentivizes them to help you.

  3. Practice communicating about your practice.

 

Weave Yourself into the Local Business Community

DPC practices that want to be working more collaboratively with local employers should strive to spend as much time as possible with local business leaders. These leaders can frequently be found at a city club or chapters of national service clubs like the Rotary Club or Chamber of Commerce. The environment at these meetings is typically low-pressure enough to permit a friendly conversation about health care. A single friendly conversation could lead to a lot of new patients.

 

Find a Broker with a Fitting Perspective

Because employers are accustomed to working with insurance brokers, a broker can be a valuable ally in facilitating connections. However, many brokers make money by inflating the price of a health plan so it’s important to find a broker who’s driven not by commissions but by service to employers.

Fortunately, just as DPC is an emerging breed of primary care that seeks to align physician interests with their patients, there is also an emerging breed of brokers transitioning from commission-based compensation to a flat-fee based model. Instead of trying to maximize health plan costs, these new brokers are incentivized to bring effective solutions to employers. Since primary care is such an effective form of health care, these brokers tend to recommend solutions that are primary care-based, in particular, those within the DPC model.

 

Practice Communicating about Your Practice

Acquiring employers means showing them how you can help. This can sound intimidating at first but it merely requires practice. It helps to keep in mind that after every conversation with an employer you’ll improve your understanding for the next one. This  feedback allows you to tailor your service offering and become better at convincing future employers to work with you. Physicians generally find that in-person communication with employers is particularly effective, with blogs and town-hall meetings a close second.

If you have any other questions, the DPC community is here to help. Many trailblazers at community.hint.com have successfully worked with employers and want to share their wisdom with you. The DPC community actively fights for innovations that actually improve health care, including increased access and affordability of primary care.

 

[1] Constantz, Jed. “Engaging Employers to Grow Your DPC Practice.YouTube, YouTube, 12 July 2017, 17:56.

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