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4 Reasons to Embrace Direct Healthcare for Employees

September 3rd, 2024 | 3 min. read

By Kristy Esch

Top Reasons to Embrace Direct Healthcare for Employees
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Save money, increase access to care and improve health outcomes by offering direct healthcare for employees.

Despite more than half of U.S. workers utilizing an employer-sponsored health benefits plan, many employees struggle with chronic conditions and other health concerns, while employers see their costs rise every year.

Put simply, employee health continues to stagnate or grow worse, regardless of throwing more money at the problem. It’s the result of a system that benefits large healthcare systems at the expense of patients and employers.

“The traditional health system is a fee-for-service model,” says Dominic Franchini, Vice President and Partner at HORAN, an employee benefits consulting firm. “To get more fees, you have to provide more services, and the more services you provide, the more money you earn. It’s a misalignment between the economics and the outcomes.”

Facing these challenges, employers proactively implement direct primary care services for their workers, a model that can lower costs, improve health outcomes and enhance the employee experience. Read on to learn the benefits of employer direct healthcare.

What is Direct Healthcare for Employees?

With a direct healthcare model, employers contract with an independent primary care team. Rather than paying for each visit, screening or follow-up, employers pay a set fee for their employees to gain unlimited access to high-quality care, typically with no or very low costs.

Employees can schedule in-person or virtual appointments for acute and primary care needs, chronic condition management, mental health support, health coaching and physical therapy. Direct care providers are incentivized to produce healthy outcomes, not by the number of patients they cycle through the health center.

“I always tell employers to imagine that a direct primary care contract is layered on top of an existing health plan,” Franchini says. “You’re not removing anything — you’re adding a new benefit. And over time, all of the services and care provided in direct primary care get siphoned out of the traditional health plan.”

Why Employers Should Embrace Direct Primary Care

1. Direct Healthcare for Employees Reduces Costs

Employers spend a sizable amount of their healthcare budget on chronic disease management, high-cost prescriptions and acute needs. With a traditional health plan, employers submit an insurance claim each time the employee sees a specialist or undergoes a screening.

“In a traditional model, if I have diabetes or hypertension, I’m going to be referred to a variety of specialists,” Franchini says. “I’m probably going to be over-tested and over-referred for care that could be managed by a high-quality primary care team at a lower cost.”

By providing employees with direct access to these services, employers skip the middleman and work with an independent care provider with no financial incentive to monetize each visit. “What ultimately happens is a lot of the excess cost and waste is steered back to a great primary care physician who can manage it more effectively and at the lowest price point,” Franchini says.

According to the National Institutes of Health, “Direct primary care covers more than 85% of most healthcare needs, with no deductible, no coinsurance costs, and no claims. Coupling a direct primary care plan with a high-deductible health plan saves on average 20% to 30%.”

2. Direct Healthcare for Employees Removes Barriers

The direct care model eliminates several barriers to high-quality care. For instance, employers often open health centers at the workplace so employees can easily engage with services without taking time off work, or join existing networks of dedicated health centers located close to where most employees live.

Employees can also obtain common prescriptions and undergo routine screenings at the health center, eliminating a trip to the pharmacy or testing center.

“If you have to interface with a traditional health system multiple times a year, every point of friction is likely to deter you from getting care,” Franchini says. “If it’s hard to see my doctor, if it’s hard to refill a prescription, if it takes a huge amount of time out of my day, each of those things makes it less likely that I’m going to engage in all the activities to help me be healthy.”

3. Direct Healthcare for Employees Focuses on Outcomes

Direct care providers see only a set number of patients each day, which allows them to spend more time to ask the right questions, build trust and get to the root of the problem.

With a focus on comprehensive care, direct care teams often include primary care providers, a health coach, dietitian, physical therapist and behavioral health specialist who collaborate to treat the whole person. If an employee gets diagnosed with diabetes, for example, their primary care physician can bring in a health coach or diabetes educator to work alongside them and provide more specialized care. This removes the burden of visiting multiple locations and increases the chances employees follow through on the care they need.

When employees do need a referral to an outside specialist, an independent care provider or referral coordinator can steer the employee toward the highest-quality provider at the best cost. “Traditional health system doctors are incentivized and almost required to refer care inside their system, even if the best provider isn’t there,” Franchini says. “Oftentimes, the employer ends up paying to send people to providers who might not be the best or who might not produce the best outcome.”

4. Direct Healthcare Elevates the Employee Experience

The direct primary care model eliminates many of the headaches employees experience from engaging with traditional healthcare. Direct care improves the employee experience by:

  • Offering same or next-day appointments
  • Eliminating time wasted in the waiting room
  • Allowing for more time with providers so employees feel less rushed
  • Accessing health coaches, mental health support and other specialists onsite
  • Providing an on-site dispensary for medications

Ultimately, the improved healthcare experience empowers employees to seek care when they need it and take charge of their health journey.

“Marathon Health and other direct primary care providers are trying to make every touchpoint easy,” Franchini says. “You get in easily, see your doctor easily and leave with all of the care you need — including prescription drugs — versus being referred all over town and bounced around to multiple facilities.”