Employers are faced with a plethora of challenges regarding ACA compliance such as increasing health care costs and employee retention. Next to payroll, health care expenses are most employers’ largest expense. In 2017, insurance premiums are expected to increase. Sadly, most employers think a less expensive ACA compliant alternative does not exist.
An ACA compliant alternative does exist in the Direct Primary Care (DPC) model that is gaining national attention. This model is effectively helping employers navigate the costly traditional methods of health care delivery.
Understanding Direct Primary Care Capabilities
In order for employers to fully maximize the benefits of direct primary, a solid understanding of the DPC model is key. Currently, many companies and benefit advisers think of direct primary care as an “add-on” to their existing benefit program. Direct Primary Care should be the foundation of a truly effective benefit plan. Fully understanding the capabilities and offerings of direct primary care is critical. First, the scope/capabilities DPC is able to provide: routine physicals, urgent care needs, chronic disease management, wholesale medication, labs, imaging, reduction in workman comp claims, 24/7 telemedicine services, and population health management. Second, removing the barriers of co-pays and visit limits enhances the access to providers. Additionally, same/next day visits along with telemedicine solutions are improving health outcomes and accessibly to health care . Third, direct primary care is able to lessen the out-of-pocket health care costs for employees, including co-pays, prescription, lab costs, urgent care needs and many more.
Direct Primary Care and the Traditional Health Insurance Model
When looking to create a cost effective health care strategy, employers need to have a solid understanding of the true purpose of health insurance. Health insurance was designed for catastrophic events such as cancer, strokes and heart attacks. Not for all health care needs, as it is currently structured in the US. Insurance in all other industries, such as automobile, is used for catastrophic events. Does your auto insurance pay for oil changes? No, but this is an important routine service which is needed for the life of your vehicle. Health care is the only industry where insurance is used for the rare catastrophic events and also common health care needs. This excessive health insurance cycle is leaving us financially crippled and incredibly ill as a nation.
The traditional health insurance model increases premiums when claims are routinely filed. To decrease the cost of premiums, the frequency of claims needs to be reduced. Since all health care costs are so expensive it appears there is not an alternative to this health insurance cycle. However, not all health care is expensive. In fact, around 80 percent or more of health care needs are very inexpensive, and can be effectively treated through direct primary care.
To cap costs, Direct Primary Care is packaged in an affordable flat monthly fee, typically less than $60 a month. Cheaper than most monthly cell phone bills! Direct Primary Care keeps insurance use and costs low. The health insurance is available for the rare 20 percent of health care needs. This model is a proven and effective way for employers to reduce health care costs, while providing access to quality health care.
How Employers Can Utilize Direct Primary Care
To make Direct Primary Care work, employers are required to have a wraparound insurance plan. Direct Primary Care paired with a wraparound insurance policy is compliant with all ACA mandates, and results in significant savings on health care costs for employers and employees. There are a variety of insurance wraparound policies to accommodate DPC. If your organization is self-funded, Direct Primary Care can control catastrophic costs by providing accessible quality care as a strategic tool in your health benefits plan.
As our health care costs continue to skyrocket, many companies need to have a pulse on the latest models to keep costs down, while continuing to improve quality and health outcomes.
For Companies facing year-over-year health care cost increases, aggressive solutions are critical to sustain business health and remain competitive. The traditional cost containment strategies such as: increasing deductibles, increasing out-of-pocket costs for employees, decreasing benefits, and most wellness programs are proving to be ineffective with controlling or stabilizing health care costs. Most of these strategies fail to address the root cause drivers of escalating healthcare costs and to provide real solutions on how to mitigate these costs in the short and long term.
When evaluating various healthcare cost containment strategies, employers need to have a solid understanding of how these models will help them achieve their short and long-term goals in their corporate health and wellness strategy. During the evaluation phase, employers should seek advice from their benefits consultants, research current and future health care cost containment strategies, and have a firm understanding of the health care needs in their employee population.