Are We Trading One Master for Another? Employer Contracts in Direct Primary Care
This post was by Michelle Cooke, MD:
Full disclosure, I have not yet secured any employers for my DPC practice. On one hand, I look upon my colleagues who have secured employers with a bit of envy. Securing an employer is an excellent way to grow and stabilize a small practice while providing great care to the community. On the other hand, I get this queasy feeling about it as it seems to introduce another “middle-man” into the healthcare space.
I don’t intimately know all the history & politics behind why health insurance and healthcare has been attached to employment, but there seems to be something inherently off about this model. Most other forms of insurance that we use such as home insurance, car insurance, life insurance, have very little, if anything, to do with our employer. We are able to secure excellent and transparent pricing for these forms of insurance without having to go through an employer relationship. Of course, Healthcare has to be the exception. So little seems to make sense about the way that we manage and operate healthcare & health insurance in the United States.
One thing I love about my practice is that every patient who comes in has made a conscious decision to choose me as their doctor. They don’t come to my practice because I was the physician offered from their employer package. I truly feel it enhances the doctor-patient relationship when the patient chooses you, rather than feels entitled to you from an employer benefit.
Attaching Direct Primary Care to employment introduces a middleman into the equation. Using a third-party payment system can run the sharp edge of misaligning incentives, as we have seen with today’s mess of a healthcare system. However, the employer-DPC relationship may be more of a second-party payer system in which incentives may be better aligned with the patient’s best interest. Dr. Chad Savage outlines these relationships beautifully in his talk at the Docs 4 Patient Care DPC Conference about the harms of a third-party payer system. While teasing out the nuances between a second vs third party system is important, it adds yet more confusing layers to what should be a simple interaction. (Kinda feels like talking about your third cousin once-removed – what the hell does that mean??!)
Anyway, I haven’t come to a conclusion about whether I think employer-based contracts in Direct Primary Care is the way forward or if it has the potential to be detrimental to this powerful movement. Personally, the thought of an employer contract gives me some pause. Maybe it doesn’t have to be so “either or”. One thing I love about DPC is that it makes room for variety and choice – and this is what is lacking in the healthcare space today. Maybe having a mixture of practices – those who have employer contracts and those who don’t – is exactly what we need to diversify the healthcare space.
Weigh in DPC Docs! Yay or nay on employer contracts for DPC?
Dr. Michelle Cooke is not only a rock-star Family Physician, she is a wife, boy-mom, yogi and a proud Direct Primary Care Physician. She is the owner & founder of Southwest Atlanta’s first DPC Practice – Sol Direct Primary Care. The DPC model frees Dr. Cooke to spend more time with her patients to practice lifestyle medicine. She helps her patients achieve their best health with less medication! When she is not in the office, you’ll find Dr. Cooke on the yoga mat, frolicking in nature, or jamming to live music around Atlanta. https://sol-dpc.org
I will be starting my clinic April 2025 and the employer contracts seem attractive but also give me pause as it brings people not by choice. I would be interested in Doug’s and Shane’s opinion on this one! Is there a way for the employer to pay the fee for the ones that are interested (then the employer does not get the true benefits of getting away from BUCHA?
Wonderful article! I’m with you. Eliminate all middlemen. My practice has grown to ~2,500 patients, 2 locations, and two 3,100 sq feet newly, purpose-built clinic facilities (and all this in a very rural area). The first 2K patients came with no employers involved. I’ve now worked out a couple of small employer arrangements, where the employers basically pay the membership for their employees. I think employer patients account for only about 150 of our 2,500 patients. I don’t think employer arrangements are necessary, they do add some complication, and there is less patient buy-in.
Great article. Made me spend about 30 minutes analyzing my practice and contemplating how I do things!!! I have 2 Docs, 1 NP, 1 PA and 1806 Rural patients. We have 27 small businesses that send us their employees for a total of only 385 patients. Average size of the businesses are 13 patients. Large of 30, small of 6. I haven’t had any problems with the businesses, but the majority of their patients were mine before the business joined. Also the vast majority of the business owners are my patients (26/27 businesses). They in turn try to get their folks in as they care about their people. This is a very rural answer, but it works here.
Really good stuff here. Thought-provoking for DPC docs. For me, it’s the same discussion of “Should I do a signup fee or not?” No right or wrong answer, only what you feel in your bones for your office. For us, within 6 months of opening, we had mom-and-pop businesses asking to sign up employees. Many were our patients already (both employers and employees) as Dr. Franklin mentions in his comments. So, should we just say NO to those people? Are there zero benefits to accepting them? There are hundreds of small businesses in each of our communities. Should we not help them?
There are options around this issue that I would prefer, HRA-type plans where employees pay their own way. I am for cutting out the employer and giving the employees money to choose for themselves BUT that is not what we have at the moment. Love to see the HSA debacle fixed and go that way. But for now, if we want to help small businesses this is the way. We usually don’t have interference from small employers at all. Now the large ones, different story. I would advise DPC docs to really spend time understanding the issues of working with larger employers (say over 100 employees) when insurance brokers, health plans, and big money are involved.
For those who are starting out, in the Mastermind 101 classes I’ve done and when I speak with new DPC docs, I tell them to think about employers, mainly small employers. What will you do when they come knocking? They will.
Wow! Such incredible growth with little employer input. This breaks the myth that you won’t grow in dpc until you have employer contracts. Thank you for showing us it’s possible.
I’m glad your wheels are spinning. I’m also glad that your employer contracts are working for you.
I get the impression that the smaller the employer, the better, the relationship with DPC
i’m not a doc but we have really focused on employer contracts and have some very large employers with great results and engagement. it does take a lot of coordination but it can also allow for big impact bc we can work closely with patients and their health plans to make sure cost is as low as possible for employees and self-insured employers. we can also do things like employer health fairs to really get employees involved
i agree – it’s always been off to me that health care is tied so closely to your employer but here we are!