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Data-Driven Insights for Building Better Health Plans

Milliman is one of the most prominent actuarial companies in the world. They pride themselves on their data-driven insights, and their research frequently highlights innovative and intelligent solutions in the healthcare space. In their 2021 white paper, “Direct Primary Care: A unique healthcare solution for employers,” the authors discussed the role of DPC in a health plan and highlighted the goals of a direct primary care offering¹:

  1. Higher-quality care
  2. Improved patient experience
  3. Improved provider experience
  4. Lower cost of care

Here we’ll examine why employers are so interested in lowering the cost of care and how direct primary care (DPC) plays a critical role in health plan strategy.

Employers Assume the Risks

Milliman reported 60 percent of the 157 million Americans enrolled in employer-sponsored healthcare coverage are in self-funded plans. That means the employer assumes the risk for all claims expenses. The unpredictability of these expenses from year to year is a pain point that leaves many employers seeking strategies to reduce healthcare coverage costs for their employees.

With all the cost-containment remedies being waved about, it’s no wonder benefits administrators get confused. Perhaps an effective strategy for keeping healthcare costs low has been hiding in plain sight. A strong argument can be made for going back to basics. In this case, the fundamental building block of good health is primary care.

Primary Care is the Foundation

Research has consistently shown that systems oriented towards primary care lead to better health outcomes, greater health equity, and decreased costs—to the point that other industrialized nations spend twice as much or more on primary care than the United States.

When quality primary care is an employee’s entry point to the healthcare system, it can lead to significant savings downstream. A primary care physician can diagnose or treat illnesses, prescribe helpful medications, or refer a patient to a specialist before conditions escalate; therefore, this process provides out-of-pocket savings for the patient and savings on claims for their employer.

Figure 1 shows visits to the emergency room, and admissions to the hospital decreased significantly for employers enrolled in a DPC plan.

Health Plans

Employee Engagement is Critical

Even the best-designed benefits plan is useless if the employee engagement is low. The only way to successfully implement a DPC strategy for cost mitigation is to educate administrators and employees on the benefits of direct primary care, but it can’t stop there. Employees must be taught how to utilize their direct primary care benefits.

An education campaign surrounding open enrollment is an easy way to communicate with staff and drive employee engagement. It can be a simple video or a more detailed eBook. Either way, knowledge is power. The more you educate people on the importance of primary care and how easy it is to access it with direct primary care, the more effective your health plan becomes.

The authors surmised that DPC is a rapidly expanding and viable option for employers in today’s landscape. With a bit of education and strategy during implementation, it can be a more successful solution for lowering the costs of a health plan.

For more information on implementing a DPC strategy or educating benefits administrators about direct primary care, contact Healthcare2U.

¹ Busch, Fritz, Dustin Grzeskowiak, and Gary Simmons. “Direct Primary Care: A unique healthcare solution for employers.” Milliman. 2021. Accessed 22 Apr 2021.

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