HOW DOES IT WORK WITH EMPLOYEES? SAVING ON INSURANCE COSTS AND LOST TIME?
With crisis in healthcare, there is both risk and opportunity. Primary care is a minor expense in the overall picture of healthcare, but affects and controls most everything else. Direct primary care helps minimize or prevent illness and medical expenses, creating opportunity for saving through reserving insurance for major losses only. Would you buy an insurance policy to pay for the tires on your car? Paying for daily and preventative primary healthcare through simpler, transparent and less expensive mechanisms can generate savings. Look at the examples to the left. The $3,888 and $11,100 yearly savings potential for individual and family are indicated by difference in premiums (blue segments). This $3,888 saving is obvious if one has a high deductible plan and minimal health expenses. The red stacked above (maximum out of pocket yearly expense) represents both the risk and opportunity for savings. Direct primary care can dramatically reduce or eliminate this red expense through all the previously mentioned scenarios.
For peace of mind, lets look more closely at a worst case DPC scenario for an individual or family, where everyone reaches their maximum out of pocket expenses with the plan for the year through a catastrophic illness.
Under the “worst case” scenario, the total premiums and out of pocket expense of $12,496 (top of the bar) for the individual platinum plan exceeds $11,758 total premiums and out of pocket expense (top of the bar) for the high deductible bronze. The low deductible premium is even more significant under the family plan. So, bronze plan total cost is less than a platinum even under that “catastrophic illness” scenario and DPC helps reduce the chance and cost of the “catastrophic illness”.
(These figures were an example from a recent small business plan) They are here as an example for illustration only. For individual advice, you should review your own plan options and consult with an insurance expert)
The direct primary care fee (green segment) is small compared to those expenses, but is instrumental in creating the opportunity to save $3,888 per policy by treating illness early before it progresses, preventing ER visits and hospitalizations, and navigating to more cost effective specialty care, testing and prescriptions. This reduces the likelihood and severity of those “worst case” scenarios, giving the opportunity for saving the $3,888 per individual to share with the company and their employees. All this occurs while receiving care through a more patient centered and effective model. The opportunity and challenge for the company is to share a portion of those risks and savings with employees in such that everyone is comfortable with their risk, motivated and benefits from the plan. This is commonly accomplished through flex savings accounts, HRAs, HSAs, healthcare vouchers, rebates or other mechanisms. One example is a Forbes Magazine Article on Union County, North Carolina, who generated over a millions dollars savings yearly through DPC. Full 1 hour video presentation
Tax treatment of these concepts needs to be carefully designed by an expert.