DPC Saves Employers Money. Duh.

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I have plenty of great writers here who can speak about the subject of working with employers if you are a DPC doctor. Here are my two cents worth. My office worked with very small groups and that was lovely because they were appreciative and the employees really could understand DPC. And if a small group left it didn’t hurt my practice. But they didn’t leave. Dr. Swartz, who took over my practice, continues with those same companies today. So, for the doctor it is a great deal but how about the employers? Well, this was on LinkedIn by Daniel Meylan, an independent healthcare risk financing consultant, and I thought I would share it:


One of the unique challenges in quantifying the value of Direct Primary Care (DPC) is that DPC actually eliminates healthcare transactions. It is difficult to measure what doesn’t happen unless you have accurate detailed data and can measure historical improvements. Here is a case where the data measured what didn’t happen because of Direct Primary Care!

We first engaged this employer sponsored self-funded health plan in 2018. That year, this 700 life group had 757 Emergency Room (ER) visits at an average of $646 per visit utilizing a traditional BUCA network. Employer costs were $446 per visit, member costs were $200 per visit.

DPC was installed in January 2020. Since 2020 ER visits have been reduced by 73%. From 2018 to 2024 the average cost of an ER visit for this group increased by $2,446 to $3,092. In 2024 plan costs were $1,792 per visit, member costs were $1,300 per visit. (The cost of the average ER visit increased 73% from 2012 to 2021 per the Healthcare Cost Institute)

Had DPC not been a part of this employer sponsored health plan in 2024 their costs of ER visits would have been $2,340,000. In 2024 DPC saved this group and their members $1,719,152 in avoided ER cost.  In 2024 the cost for Direct Primary Care for this employer sponsored health plan was less the $425,000. The per member per month savings after DPC costs in 2024 was $159.

Since 2020 Direct Primary Care has saved this employer sponsored health plan millions of dollars just in avoided emergency room visits!

Here’s the rub. Small employers won’t see this type of savings but any savings for them is good. Also, I don’t know the specifics of the above and whether it was a DINO or not and that worries me. Why? Because it gives private equity firms and VCs priapism when they see these types of numbers and they want a piece of that action. All that said, I guess my point is that DPC is a good thing for employees, the DPC practices, and also saves money for the employers as well. But we all knew that.

Duh.

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About Douglas Farrago, MD

Dr. Farrago is a retired family physician based in Forest, Virginia. Since 2021, he has run DPCnews.com, a leading resource for the Direct Primary Care (DPC) movement. He is the author of three best-selling books on Direct Primary Care: The Official Guide to Starting Your Own Direct Primary Care Practice The Direct Primary Care Doctor’s Daily Motivational Journal Slowing the Churn in Direct Primary Care (While Also Keeping Your Sanity) In 2016, Dr. Farrago conceived the idea for the Direct Primary Care Alliance and co-founded the organization alongside other pioneering DPC physicians. He is widely recognized as a leading expert in the DPC model and frequently lectures to medical students, residents, and practicing physicians on how to successfully start and run their own DPC practices.Dr. Farrago sold his Direct Primary Care practice in October 2020 but continues to receive care there as a patient.