Or is it? Help is possible for both you and your employer. Companies can change how they pay for healthcare coverage so they and you get a much better deal — happier, healthier staff with employees and companies spending less. It’s as simple as paying for you to get outstanding primary care with a direct primary care or concierge physician.

You will get what you need in care quality and satisfaction, and your employer will have reduced total care costs and a healthier and more engaged employee. Good for both parties.

What does company insurance cost today?

The Kaiser Family Foundation reported a new high of nearly $23,000 per year per family for employer-provided health coverage in 2022. This is more than double the cost in 2004 and 43% higher than a decade ago. The employee portion is also rising steadily to over 30% of the total.

Bringing down the costs and improving quality

Can these intolerable levels be brought down and, at the same time, improve care outcomes? The answer is a definite “Yes,” but not using the techniques politicians and policymakers recommend. Conservatives would say it is a matter of needing more competition between insurers. Progressives recommend universal health insurance (“Medicare for All.”)

These approaches begin with the insurance itself rather than the actual care. But the problem is with care delivery; this is where the money is spent. It starts with primary care. Little recognized by politicians or policy gurus is that primary care is broken. This aspect of our dysfunctional healthcare delivery system results in the rapid escalation of costs, especially the 75–85% of the dollars spent on managing complex chronic illnesses.

Whatever is done regarding insurance coverage, it is clear that individuals today are getting less than adequate care, and America’s per capita costs far exceed other developed countries. The real and relatively simple fix lies in a dynamic primary care system. But primary care physicians (PCPs) are trapped in a non-sustainable business model, forcing them to see too many patients daily, usually 24 or more, meaning only 10–12 minutes of “face time” per patient visit. That is not enough time for a complicated problem, for patients on multiple prescription medications, or with impairments of hearing, mobility, and maybe cognition, nor for aiding a patient with substantial anxiety. PCPs are also reeling under the constraints of government and insurer rules, regulations, and responsibilities that further take time away from the patient.

Not having enough time with each patient results in PCPs referring far too many patients to specialists when they could have dealt with the problem, including managing most chronic illnesses with more time. They prescribe drugs when lifestyle changes would suffice because working with a patient on lifestyle issues takes time. PCPs often order many tests when more time with the history and examination could give the answer. There is no time for developing a close, trusting relationship so critical to effective care. And there is no time to address anxiety which accompanies at least 40% of doctor visits. Visits to the ER are frequent, and many hospitalizations could be avoided.

The result is higher and higher expenditures yet diminished quality of care. More than 50% of PCPs show signs of burnout, and patients are less than satisfied. PCPs are retiring early or seeking other career options, and medical students no longer choose primary care as a career. Yet somehow, America tolerates this highly dysfunctional system of medical, not health, care.

Direct primary care to the rescue

There is another way. It is being done very successfully by individual primary care practitioners. It is not being mandated from above down but rather developing from the grassroots up. It is called direct primary care or DPC. Other terms used are membership, retainer-based practices, or concierge practices.

Although each of these has some differences, the essence is as follows: the primary care physician reduces the number of patients under care from the current 2,500 to 3,000 to a more manageable 400 to 800 and usually accepts no insurance. The patient pays a fixed amount directly by month, quarter, or year. The PCP commits to same-day or next-day visits, appointments for as long as necessary, 24/7 cell phone, text, and email access, and an extensive annual evaluation focusing on wellness maintenance and disease prevention.

Direct primary care costs are not reimbursed by insurance. You must pay out of pocket, but your health improves, satisfaction rises, and doctor frustration falls.

Many DPC physicians purchase generic drugs wholesale and pass them on at little or no markup. They may also arrange for markedly reduced-cost laboratory testing and radiology procedures. These can help substantially if you have a high deductible policy.

With the added time available for each patient, most issues, including the management of chronic illnesses, can be resolved by the PCP without the need for a referral to a specialist. But when one is needed, the PCP has the time to call the specialist directly, explain the issue and request a prompt appointment. More time with your primary care doctor results in fewer tests and prescriptions and more attention to lifestyle modifications. The costs of primary care do become your responsibility but the total costs of care decline markedly. With DPC or concierge primary care, the result is better health, the development of a trusting relationship, fewer specialist and ER visits, and fewer hospitalizations. A win-win for everybody.

Here is what your employer can do for you

It is essential to understand that employers are generally self-insured. They use an “insurance company” to manage the costs. The “insurer” calculates the approximate costs for your company for the year ahead based on the previous year’s activity plus an inflation allotment. This almost always results in an increase in the premiums for the upcoming year. The employer decides how much to pass along to the employee to pay, and the employer also sets the yearly deductible with the assistance of the “insurer.” In the following year, the company’s costs will decline. Should the company’s staff have better health and hence use fewer medical resources, the company will see a reduction in premiums in the following year; this rarely, if ever, happens today. But it could.

Employers can embrace this approach by reimbursing the cost of DPC. Paying for DPC may seem like an added expense to your employer. Still, the result is improved employee health, reduced absenteeism, and sick leave while bolstering employee satisfaction and decreasing the total care costs for both employer and employee.

Here is how to make it happen

DPC’s time has come. It is time for employers to embrace it, but it won’t happen unless they are “nudged” into action. Here is my advice to you. Go to your employer and advocate for direct primary care/concierge care paid for by the company. Let them know why it is to their definite benefit. And get your co-workers to do the same. It is definitely to your advantage to advocate.

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What does concierge or direct primary care do for you? It gives you outstanding care at a reasonable cost. Your doctor cares for only about 500–800 patients instead of the typical 2500–3000 individuals. Instead of seeing 24+ patients per day for an average of 10–12 minutes of “face time,” you get same-day or next-day appointments for as long as necessary. You get intensive wellness advice through preventive medicine direction, immediate care of those episodic problems that arise every so often, and complete attention to complex chronic diseases (heart failure, diabetes with complications, etc.) with much less need to refer to specialists.

But when it is necessary for specialists to participate, the PCP plans and coordinates the care process. And most important, the PCP gets to know you as a person, part of a family and a community, developing a caring and trusting relationship. You will have fewer tests, X-rays, and specialist visits, fewer ER visits, and fewer hospitalizations. Some practices offer generic medications at cost and deeply discounted prices through arrangements for imaging and lab tests.

Here are four direct primary care practices to illustrate typical fees. For example, AtlasMD’s (Kansas City, MO) annual fee is $600 for a young adult and about $1200 for someone over age 65; Dr. Neuhofel’s (Lawrence, Kansas) is $708 (adult under age 70) to $948 (70 and older) annually for an individual and $1668 for a family of four.

Drs. Izbicki (Erie, PA) charge $1380 per year per individual 30 and above and $2340 for a family with any number of children under age 19. In Columbia, Maryland, Dr. Sarah Zahaar recently left a Johns Hopkins group practice and began a DPC practice called Oak Tree Primary Care. She charges $99 per month with a 15% discount for those who pay annually, just over $1000 per year. In addition, she has discounts for families and children. From her website, here is a link to a short video on DPC.

As Jon Izbicki told me, “Our monthly fee is less than what it costs to rent a parking space downtown for the month.” Even the more expensive retainer or concierge practices are still within reason for many. $2000 is about $5.50 per day. How many people spend that much per day at Starbucks? Or, consider the monthly/annual cost of internet, mobile phone, cable TV, and streaming.

As of 2021, the average expenditure per month (different organizations reach somewhat different conclusions, but the following is a good average) for internet, cable, and streaming services is $156 per month or $1768 per year. Add to that mobile phone service, and the total is well above $200 per month or $2400 per year. So, perhaps $1500 or $2000 — undoubtedly real money — is not such an onerous expense for comprehensive primary care when prioritizing healthcare expenses relative to other expenses.

Suppose you have a high deductible health insurance plan from your employer or from the exchanges with a health savings account (HSA). In that case, you can pay for the membership/retainer with tax-advantaged dollars and save considerably. And since the PCP will help you avoid digging into the deductible by preventing the need for expensive trips to the specialist, the emergency room, or the hospital, and for excessive laboratory or imaging tests, you will also save those dollars.

I predict that (absent a significant change in insurer behavior) direct primary care will likely be the future of primary care payment. It means that the patient will obtain genuine assistance to first prevent chronic illnesses from occurring; second, episodic care for those issues that pop up during the year; third, careful care of complex chronic diseases, and fourth, thorough coordination of the care of chronic illnesses, all at a reasonable cost which will be transparent.

Importantly, you have a PCP who has the time to listen — to listen deeply, resulting in a return to relationship medicine with mutual trust and respect.

Those who already have typically limited deductible insurance — commercial or Medicare — might argue that these various direct primary care models represent an added expense, not a savings. Yes and No. It is an added expense, but the potential savings can be substantial. For example, each of the three practices referred to above makes generic medications available at wholesale prices — considerable savings for many individuals.

Those with no insurance — for whatever reason — will find that they can obtain good quality primary care at a reasonable price from one of the direct pay or membership practices. It will cost much less than going to an urgent care center or an ER.

Perhaps Medicare and Medicaid will decide that it makes eminently good sense to pay the retainer for their enrollees and thus ensure their members get superior primary care at a reasonable cost. Meanwhile, save Medicare and Medicaid enormous total dollars. (In an earlier article, I reviewed what one company, AbsoluteCare, has done to reduce expenses while dramatically improving care for some of Medicaid’s most expensive patients.)

Some companies such as Erickson Senior Living that sponsor Medicare Part C (Medicare Advantage) plans have learned that by using DPC, although it costs more upfront for primary care, the total costs of care come way down, making the DPC investment a “no-brainer.” The image at the top suggests that older people can receive excellent care from a DPC/concierge physician resulting in better health and a longer life.

This concept could apply equally to commercial insurers, but they have largely avoided DPC, retainer, and concierge practices.

What about employers? The average cost per family, per the Kaiser Family Foundation, was about $22,463 in 2022, with the employee contributing $6106. Although KFF notes that the general annual deductible is $1763, many companies have very high deductibles, sometimes as high as $10,000 per family per year. For a family with members that have chronic illnesses, the costs of healthcare are thus substantial, indeed a level that makes one a medical pauper if you or a family member gets sick. In addition, employees will arguably feel their employer has walked away from them and saddled them with costs they cannot bear.

The company can partially offset the inherent anger this generates among its employees by paying the fee for direct primary care practice. It is especially valuable for individuals with multiple chronic illnesses since quality primary care can mean much better health, fewer tests, prescriptions, specialist referrals, and hospitalizations. In addition, since businesses are essentially self-insured using the “insurance company” as the administrator, their costs will decrease with this approach.

The bottom line, the company pays for the DPC doctor but reaps the benefit of lower total costs and a healthier employee who is more content and misses many fewer workdays due to sickness. More details are in my previous article, “Company paid concierge style primary care.”

Once companies recognize this advantage with its increased employee health yet reduced costs, employers will be the major reason for direct primary care membership/retainer-based practice growth in the coming years as they will essentially demand that level of service for their employees — and in so doing they will be reducing their company health care costs as a result of high-quality primary care.

The exact number of physicians in DPC practices is unclear, but an estimate by Concierge Medicine Today (CMT) in 2022 pegs the known number at about 10–25,000. CMT also notes that many combine insurance with membership fees, e.g., MDVIP; not exactly DPC anymore, but still an ability to limit the number of patients per doctor and give more attention to each.

More doctors will convert once the general population understands the advantages and begins to ask for them and demand them. There are many good reasons for an individual to connect with a direct primary care physician — better quality care, a return to relationship medicine, and often a significant cost saving despite the fee. Consider the copay and deductible savings if you spend less time in a specialist’s office and avoid visits to urgent care centers, the ER, and the hospital, including the copays for specialty testing, lab work, and imaging. Most importantly, you will have better health. That is priceless.

This is the 17th in a series on America’s dysfunctional healthcare delivery system. Here are links to the first and a recent article.

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