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Adopting direct primary care into an employer-sponsored health plan is a good way to provide better healthcare benefits at a lower cost. Studies show that direct primary care reduces downstream healthcare utilization—ER visits, specialty referrals, imaging, and hospitalizations—resulting in a lower rate of complications for employees and significant cost savings for employers. However, not all direct primary care practices are created equal, and therefore not all are equally proficient at helping employers and benefit consultants achieve these goals.

I’m going to argue something that few direct primary care physicians are going to like but that top-quality, seasoned benefit consultants already know: it’s not enough for a direct primary care practice to achieve the triple aim (better patient access, better quality care, and lower healthcare costs) by limiting the number of patients each physician sees, ceasing to bill on a fee-for-service basis, and starting to bill a flat fee per member per month. While these changes are indeed what transform a primary care practice into a direct primary care practice, a direct primary care practice needs to be able to prove that direct primary care helps an employer-sponsored health plan achieve its goals. Below I review the important issues every employer considering hiring a direct primary care practice should ponder and questions they should ask.

Where’s the Proof?

As a result of adopting direct primary care into a health plan, primary care spend increases by 20 – 40 percent, so it’s reasonable to expect savvy benefit consultants and plan sponsors to want proof that this increased spend is actually resulting in improved access to care, better quality of care, and reduced downstream costs. But you can’t report what you don’t measure, so a direct primary care practice must be ready, willing, and able to share its data and report its outcomes on an ongoing basis. Your direct primary care partner must be willing to work in collaboration with your benefit consultant and you, the employer, to understand your claims experience and the disease burden in your employee population both before and after your employees begin using direct primary care.

Collaboration and Engagement is Key

Further still, your direct primary care partner should be willing to help craft and structure plans that address your employee population’s specific medical needs. For example, if 25 percent of your employee population is pre-diabetic and obese, how does your direct primary care partner plan to help them lose weight and control their blood sugars? If 10 percent of your employee population is between the ages of 50 – 60, does your direct primary care partner have a plan to ensure each of them receives appropriate preventative care to keep them healthy, active, and productive until retirement? If 15 percent of your female population is between the ages of 25 – 36, what kind of educational programs does your direct primary care partner offer to raise awareness about unnecessary C-sections, maternal health, and so on? Does your employee population include a subset of chronically ill employees who need help getting back to full function so they can continue to participate in their place of work, their communities, and their families? If so, has your direct primary care partner outlined how it will help them?

How will your direct primary care partner onboard your employees into its practice? Is your direct primary care partner willing to create marketing programs to ensure employees become rapidly and fully engaged with their new direct primary care physicians? Is your direct primary care partner willing to bring its physicians onsite to meet and greet your employees so that its physicians take responsibility for initiating the doctor-patient relationships that are so critical for creating engagement? Do your direct primary care partner’s physicians answer their own phone calls even for appointment scheduling so that triage of medical problems begins with the person best trained to decide how to insert your employees into the medical system?

Once a quarter, or on a semiannual basis at the very least, your benefit consultant, the clinical leader of your direct primary care partner, and you, the plan sponsor, should discuss and evaluate how the plan is performing for your employees, the extent to which your employees are engaging with their physicians, how the physicians are engaging with your employees, and what the current medical loss ratio is for the group of employees who are enrolled in the direct primary care practice compared to the group of employees who aren’t. That way adjustments can be made to the plan to improve both the employee experience and their health outcomes. Employee populations are ever-changing as employees are hired, leave the company, have children, age, and so on. Your direct primary care partner should not only care for your employees but also contribute to the evolution of the plan design itself to ensure it performs optimally for both your employees and the company.

Workflow at the Point of Service Creates Compliance

Is your direct primary care partner willing and able to incorporate your Summary Plan Design into its workflow at the point of service? You’ve worked hard with your benefit consultant to craft a detailed health plan that addresses the specific health needs of your employees, one that offers them access to the highest quality physicians at the most cost-effective prices. So it’s critical that your direct primary care partner works in concert with you to deliver on this plan. Does your direct primary care partner make that Summary Plan or an abstract of that Summary Plan available to its physicians while they’re in the exam room with your employees to ensure the recommendations they make take your plan into account? If not, problems will invariably ensue. Some employees will at times require additional care outside the purview of primary care. If an employee needs surgery, for example, but your direct primary care partner’s physician refers that member to a surgeon not in the plan because he or she remains unaware which surgeons are in your plan’s network, your costs will be higher than they need to be. When you, the plan sponsor, then suggest an in-network referral as an alternative through a pre-certification process or medical management vendor, rightly or wrongly, that employee may begin to think you care more about saving money than getting them the best possible care. Or what if your direct primary care partner’s physicians aren’t aware of the pharmacy benefit you so painstakingly crafted that allows your employees to have access to hundreds of low-cost or even no-cost generic drugs through a preferred pharmacy vendor and therefore sends their prescriptions to CVS or Walgreens instead? Compliance with the plan begins at the point of service between patient and physician only when the physician is aware of the plan design and incorporates workflows to maximize compliance with that plan.

Transparency and Aligned Incentives

You also need to understand how your direct primary care partner makes money. Demand transparency. Is your direct primary care partner marking up in-office dispensing of medications, lab draws, or any other services it provides not covered by its monthly fee? Ask for full disclosure and a contractual guarantee of this disclosure. Be sure your direct primary care provider is an independent physician-led company and not one owned or operated by a hospital system or large insurer. The incentives that motivate the latter types of owners aren’t aligned with yours as a plan sponsor.

Also, how is your direct primary care partner aligning incentives internally to ensure its physicians are motivated take the best possible care of your employees? There’s a reason both the Cleveland Clinic and Mayo’s physicians are paid a salary: it incentivizes quality of care rather than over or under utilization of healthcare resources. Also, who’s actually caring for your employees when they come in to the clinic, when they call during the day, and when they call in the middle of the night? Is it an RN, an LPN, or their actual physician? Does your direct primary care partner have a process in place to ensure they hire only the best and the brightest? Just as in other businesses, there are rock-star physicians and average physicians. Which are you getting? Where did the physicians complete their training? Are they Board certified? Have you seen their malpractice claims?

Data and Analytics are Required to Make Informed Decisions

Does your direct primary care partner gather data and use analytic tools to report on key utilization and outcome metrics for your employee population? Is it using the data it gathers to identify gaps in care and to ensure compliance with evidence-based practices and preventative screening measures? Is it using data and analytics to understand and identify problems with the health of your employees before minor conditions exacerbate and become more serious and expensive health problems? Is your direct primary care partner using predictive analytics to track the health of your employees and to inform their recommendations? Without any of this data, you, the plan sponsor, lack the ability to judge if your employees are receiving the highest quality care.

Looks Like a Duck, Walks Like a Duck

Currently, physicians all over the country are beginning to convert their fee-for-service practices to direct primary care practices. Savvy business people are figuring out ways to capitalize on this movement by creating companies that look like direct primary care and walk like direct primary care but that don’t actually function like direct primary care. Some of these companies, for example, may bill insurance on a fee-for-service basis in addition to charging a monthly membership fee. Others may charge only a monthly membership fee but fail to appropriately limit the number of patients each physician is responsible for seeing. These savvy business people often just funnel patients to these “single shingles” and market their collection of independent direct primary care physicians as a unified network even if the key components that make direct primary care work are watered down or absent. In any gold rush there will be those who seek only to extract their nuggets—meaning, in this context, those who seek to create minimally viable companies that they call direct primary care but that aren’t capable of delivering on the promise of direct primary care. You must learn to identify the difference between such “extractors” and other companies working to build direct primary care practices that create genuine value and achieve better health outcomes.

Defining Direct Primary Care

Direct primary care is a new healthcare payment and delivery model whose practitioners have only recently began to focus on capturing the interest of employer-sponsored health plans. Exactly what direct primary care is—and more importantly what it should be—is still being defined. This means two things: First, even the most fertile of imaginations can’t fully envision the improvements this new model might make possible. Second, without a strict definition, different companies can market themselves as direct primary care without providing the core elements—and therefore the core benefits—of direct primary care. What that means is that any employer interested in reaping the benefits of direct primary care must be careful to make sure that whatever company they hire is not only providing the core components of direct primary care but also providing the data to prove these components are resulting in better care and reduced downstream costs. Because the worst thing that could happen to the burgeoning direct primary care movement is that one or two employers and their benefit consultants have a few bad experiences and decide direct primary care doesn’t actually work.

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