Implementing Direct Primary Care for Employers: Overcoming Challenges to Improve Employee Health

In the rapidly evolving world of healthcare, one approach is making waves for its ability to transform how employers manage and provide healthcare benefits: Direct Primary Care. 

DPC can have a profound impact on both healthcare costs and quality, making it a critical piece of the puzzle for employers looking to offer sustainable, high-quality healthcare to their employees.

The Vital Role of Education for Employers in Direct Primary Care

Educating employers is the cornerstone of successfully integrating DPC into their healthcare strategies. Many employers are still unfamiliar with the ins and outs of healthcare. They may not fully understand how traditional insurance works, let alone the benefits of a DPC model.

For Direct Care doctors looking to work with employers, this means taking on the role of an educator. It’s not enough to simply pitch DPC as a cost-saving measure; you need to provide a thorough education on how the entire healthcare system works, including the role of brokers, Pharmacy Benefit Managers (PBMs), and Third-Party Administrators (TPAs). Understanding these elements will help employers see how DPC fits into the broader picture and why it’s a smart choice for their business.

But education isn’t a one-time effort. As Dr. Shane Purcell, the author of “Magic, Pixie Dust, and Miracles: A Guide for Direct Primary Care and Employers”, pointed out, it’s an ongoing process that requires multiple touchpoints. Whether it’s through one-on-one meetings, workshops, or educational materials like handouts and videos, DPC doctors must be prepared to educate not just the employers, but their employees as well. This comprehensive approach ensures that everyone involved understands how DPC works, how it integrates with insurance, and how it can ultimately benefit the entire company.

See more: The Direct Care Benefits for Employers and Employees

Implementing Direct Primary Care for Employers

When employers consider adding DPC to their healthcare offerings, they often wonder how it fits with their current insurance plan. The short answer is that DPC doesn’t seamlessly integrate with traditional insurance plans from major carriers like BUCA, which stands for Blue Cross Blue Shield Association, United, Cigna, and Aetna.

These plans typically bundle all healthcare services into one expensive premium, including primary care coverage. Adding DPC on top of such a plan means paying twice for primary care—once through the insurance premium and again through the DPC membership fee. This duplication of costs can be a significant barrier.

Rethinking the Healthcare Plan

When implementing DPC, many employers choose to shift away from traditional, fully insured plans and explore alternative approaches. One of the most common strategies for larger employers is adopting a self-funded insurance plan. In a self-funded plan, the employer acts as the insurer, paying claims out of pocket rather than paying premiums to an insurance company. This approach gives employers more control over their healthcare expenses and allows them to incorporate DPC in a way that actually saves money.

Self-funded plans enable employers to closely monitor where the money is going, allowing them to identify and manage risks more effectively. By integrating DPC, employers can offer their employees better access to primary care, reduce overall healthcare costs, and improve employee satisfaction.

Crafting a Self-Funded Plan with DPC

Transitioning to a self-funded plan is not a simple task. Employers will need the help of experienced advisors who understand the intricacies of these plans and how to integrate DPC effectively. This process involves selecting the right Benefits Advisor, the right Third-Party Administrators (TPAs) to manage claims, choosing Pharmacy Benefit Managers (PBMs), and ensuring that the plan design aligns with the company’s goals.

For smaller employers, who might not have the resources to go fully self-funded, there are other options. Some may opt to combine DPC with a health-sharing plan, which can provide a cost-effective alternative to traditional insurance. 

A Real Story: Overcoming Healthcare Challenges in Rural America with a Self-Funded Plan

At FMMA, during a panel discussion with Allison Robinson, a representative of Hutchinson Oil Company—a family-owned business in rural Oklahoma and Kansas—and Jay Kempton, a TPA expert from The Kempton Group, they shared their journey of transforming healthcare access and affordability for Hutch's employees.

You can watch the full video here.

Understanding Hutchinson Oil Company (Hutch's)

Hutchinson Oil Company, a third-generation family business, has deep roots in the rural communities of Oklahoma and Kansas. With 21 locations under its wing, the company not only delivers wholesale fuel but also employs a team of DOT drivers who serve small towns, some with populations as low as 2,000. This small-town setting brings unique challenges, particularly when it comes to logistics and healthcare.

In these small communities, accessing healthcare is often a significant hurdle. The scarcity of healthcare providers means that employees frequently face delays in receiving care, with few options available for timely and affordable treatment. 

Transition to Self-Funding and Cost Transparency

Initial Steps Towards Change

• Cost Awareness: The decision to transition to self-funding was driven by the stark cost disparities Hutchinson encountered. For instance, they found that a procedure costing $130,000 locally was available for $30,000 elsewhere.

"Little did we know that different hospitals charge different things or different providers charge different things. Because we were in so many communities, we were able to see those stark differences in what we were being charged and what we were paying. That motivated us to really kickstart our journey." - Allison Robinson

• Mandating KPP: Hutchinson initially implemented a mandatory Kempton Premier Providers (KPP) program, requiring employees to use direct bundled contracts with significant cost savings. However, this faced initial resistance due to inadequate employee education and logistical challenges.

Empowering Employees Through Education and Support

Educating employees about the benefits and rationale behind using the plan was crucial. This education helped mitigate resistance and fostered a better understanding of the cost-saving measures.

"We keep the message simple: If you need an elective procedure, you call Kempton, and they will direct you. Education is tough, so keeping it simple is key." - Allison Robinson

Beyond that, they recognized the challenges employees faced in traveling for procedures, so Hutchinson provided comprehensive support, including transportation, lodging, and other necessary arrangements.

"We pay for transportation, hotels, and we tell them to bring whoever they need. It's interesting; we talk about providing a health benefit, but we're kind of providing a whole ecosystem so that they can utilize it." - Allison Robinson

Positive Outcomes and Employee Engagement

Hutchinson Oil Company's innovative approach to healthcare has yielded significant financial benefits. Over three years, the company completed 584 procedures with free-market providers, resulting in an estimated savings of $711,000. This substantial cost reduction highlights the effectiveness of their strategy.

Beyond the financial gains, Hutchinson’s employees have expressed high levels of satisfaction with the quality of care they received. Facilities like the Surgery Center of Oklahoma, where employees were treated as valued customers, have played a key role in this positive feedback.

The journey of Hutchinson demonstrates that with transparency, education, and logistical support, rural employers can successfully navigate the challenges of providing high-quality, cost-effective healthcare.