Direct Primary Care (DPC) and Your Group Health Plan

May 25th, 2022 Tom DiLiegro

When you move up the hierarchy of the group benefits equivalent of Maslow’s hierarchy you’ve r done your homework and/or someone has introduced you to the concept of Direct Primary Care (DPC). 


As a concept, DPC is nothing new, it’s been the foundation of healthcare delivery since the practice of bloodletting was the go to treatment for all kinds of ailments. As “big insurance” and managed care took over health care, private equity saw physicians as meal tickets and began buying practices, killing the foundational concept of primary care and the family practitioner. 


It’s a breath of fresh air to see primary care physicians saying they aren’t going to take it anymore. God bless the 2000 or so primary care physicians around the country who have taken the leap to restore their profession to what it should be and what it was, up until the latter half of last century. 


It does beg the question, is the concept of DPC compatible with employer sponsored group health plans? It depends on what you are offering as a group sponsored health plan. Let’s take a look: 


  • DPC and Fully Insured Plans: When you are fully insured, you are buying a product off the insurance carrier’s shelf, You have no say or transparency into anything other than the premium. So, it’s kind of like getting a Diet Coke with a Big Mac; a nice attempt, but not really going to do anything to improve your plan. Note, that although you are at low risk of your policy being canceled, if you sponsor a DPC membership, you are technically in violation of your agreement with your carrier, as you are incentivizing employees to visit a non-network physician. Don’t you just love insurance contracts??


  • DPC and Carrier Administered Self Insured Plans: If you are self insured, utilizing one of the big 5 insurance companies for administration and network, you haven’t really functionally changed anything from being fully insured, you just have more transparency into how much you are getting ripped off. You still have the network issue with DPC and unless you’ve negotiated contract concessions, DPC is going to be a nice stewardship benefit for employees, but you won’t really see any cost savings or improvement in plan satisfaction. 


  • DPC and Unbundled Self Insured Plans: As we progress through the value based group health plan design, “unbundling” your plan and reassembling the components like someone with OCD would assemble a Mr. Potato head doll, is where DPC starts to bend the curve. When you can choose a plan administrator who knows how to coordinate expenses, a reinsurance carrier who understands the nature of the practice, and a benefits advisor who knows how to design a “plan” around the DPC practice, all the stars align and you see fruits of the investment made to adding DPC to your plan. 

Here we start to get into the embedded vs. non-embedded DPC with a group health plan. The beauty of DPC is all the practices are fiercely independent. The hard part about DPC is that the practices are fiercely independent. Some will agree to be an embedded partner in the “plan” which makes it easy, but it does compromise, somewhat, their mission. However, when a DPC is not embedded in the plan, issues could arise that create friction with the plan itself. In many ways having “insurance” as part of a plan ruins a lot of things, but it is a necessary component for financial protection .


  • DPC and Medical Cost Sharing: By far the easiest and most logical health and welfare benefit program that can be implemented with DPC is a Medical Cost Sharing (MCS) membership. By its nature DPC memberships are NOT insurance plans and they fight against being classified as such. In a similar way, MCS plans are the same. Inherently there are things about MCS memberships that don’t make them a fit for everyone, which is why one must evaluate all options they have available to them for their employees, but as Ferris Bueller describes the 1961 Ferrari “it is so choice. If you have the means, I highly recommend picking one up” only in this case, DPC and MCS are, by far, your least expensive, highest value plan combination. 


DPC is the most promising development in the timeline of healthcare “innovation” since Montgomery Ward rolled out the first employer sponsored group health plan 150 years ago. Employers need to go into a partnership with a DPC practice with eye’s wide open as it relates to compatibility with their group health plan and whether or not their “insurance” broker knows how to marry the two together. Next to the insurance premium, DPC memberships are the next most expensive fixed costs on the list, so as you continue up the health plan equivalent of Maslow’s hierarchy, make sure you have a benefits advisor who has their OCD under control and all the parts to the Mr. Potato head doll.