Most of the health needs of the working family population can be met in an optimized primary care setting. But only about 5-7% of total healthcare spending is spent on primary care; 90-95% of healthcare costs result from downstream care. Therefore, the secret to decreasing overall healthcare costs is maximizing the value of primary care to manage downstream costs, where most healthcare money is spent.
It’s well understood, moreover, that the quality of specialists and hospital care has no direct correlation with cost. This means self-funded employers are generally paying much more than they need to pay for care of uncertain quality due to poor downstream care management.
How can we make sure employees get the quality of care they deserve at a reasonable cost? We spoke recently to Scott Wham, Director of Compliance and Innovation at leading brokerage OneDigital where Scott is in charge of finding innovative healthcare solutions to control costs. He’s seen the whole gambit of solutions and believes there is already one that business leaders can utilize to solve the issue of poor downstream care management. Together we discussed the main issue plaguing patients and employers and how the most innovative companies are using direct primary care as the antidote.
Patients Typically Trust Physician Recommendations Too Much
Patients are not generally healthcare experts, so they normally rely on their physicians to provide them with the best recommendation. As Scott put it, “Physician recommendations can be based on a variety of subjective variables. The expectation that a lay individual is going to effectively cross-examine the advice of a physician to identify whether a recommendation or referral is evidenced-based is unreasonable. That is why it’s essential for health plans to incentivize utilization of providers with a track record of practicing evidence-based medicine.” Essentially, Scott believes that effective primary care steerage to providers practicing evidenced-based medicine can enable a health plan to realize substantial cost-savings.
With the alarming increase of doctors’ patient panels in fee-for-service medicine, physicians often don’t have the time or incentive to do the necessary research to refer patients to the highest value provider. In fact, according to Scott’s analysis, many doctors default to the same referral patterns, even if those referrals don’t have the best outcomes and prices. Scott noted, “A physician might consistently refer to the same specialist—for instance, an orthopedist—due to a variety of subjective variables. Perhaps they know the orthopedist will see their referred patients quickly, or perhaps the orthopedist might share an office building, or maybe they’re just golf buddies, or they are both members of the same health system. None of these variables speak to whether the orthopedist practices evidence-based medicine and achieves the best outcomes. Unfortunately, we know through analyzing claims data that it’s far too common that a given specialist is not practicing evidence-based medicine, and the costs to patients and employers alike can be extravagant.”
According to a study by McKinsey, the cost to deliver the same care in a single local market can differ by over 100 percent, even after holding the prices that providers charge constant and risk-adjusting based on patients’ health status. The variations in cost had no discernible impact on the quality of care. What does this mean? The colonoscopy provider your employee went to last month that charged $5,000 probably wasn’t any better than the one that charges $1,000 just 5 miles away.
Direct Primary Care is the Most Efficient Referral Management Solution
So what’s the solution? How should self-funded employers steer patients away from high-cost specialists who aren’t providing better outcomes and towards the best-value providers that optimize both cost and care? At SolidaritUS Health, we’ve seen dramatic cost-saving results through our direct primary care model. Direct primary care is the most efficient cost-savings tool for self-funded employers due to its ability to control downstream referrals and decrease the need to seek outside care. As Scott put it, “Direct primary care has the ability to act like a Waze or Google Maps for healthcare – it’s not just showing you the cost for the discreet services, it’s helping you find the most efficient route to greater states of health.”
What’s Direct Primary Care?
Increasing in popularity with self-funded employers, direct primary care is not the traditional fee-for-service model. With direct primary care, employers pay a monthly fee per employee to give them access to concierge medicine. With SolidaritUS Health direct primary care, employees get 24/7 access to a personal physician who can meet most of their healthcare needs and provide a host of medical services with no co-pays or deductibles.
The direct primary care model is centered around a trusted physician-patient relationship through which the rest of care flows. Physicians are incentivized to create better health outcomes, rather than increase the size of their patient panels or the volume of billable services. This enables them to truly form trusted relationships with their patients and provide high-quality care–both in the primary care setting and through medically appropriate referrals– that result in improved patient outcomes.
At SolidaritUS Health, our physicians have the gift of time to build personal relationships with their members. Our doctors provide a very broad scope of healthcare services in a primary care setting, but we do not impede our members’ access to downstream care. Instead, we direct patients to high-value providers.
As SolidaritUS CEO Mark Blum explains it, “We improve health outcomes by removing the barriers to access and assuring that our patients get high-quality care when they need it, in the right setting and at the lowest cost.”
SolidaritUS has seen an astounding 40% reduction in overall medical claims and a 26% reduction in overall health costs without any restrictions on patient access to downstream care. We achieve this in two ways:
- By providing such exceptional access to a broad scope of primary care services that inappropriate use of downstream or specialist, hospital, and emergency room care is minimized.
- By developing high-value specialist and hospital relationships that optimize savings when downstream care is medically appropriate.
Price Transparency Empowers Patients to Make the Best Decision
For innovative employers that wish to align their employees’ incentives to select high-value downstream care, SolidaritUS Health has introduced price transparency tools that empower patients to make the best value decisions and share in the savings. For example, when SolidaritUS physicians refer their patients to surgeries or specialist care, these patients can look online and compare prices, health outcomes, and payment options for different specialist providers. They can also talk to their personal SolidaritUS Health physician directly about their preferences. This transparency along with the reduced demand for inappropriate downstream care translates directly into cost-savings for employers.
Lower Costs, but Better Health too?
With cost savings results as great as SolidaritUS’, one may wonder whether employees are actually receiving better care. However, SolidaritUS has not only seen considerable cost reductions, but great improvement in health outcomes, as well. In a 6-month period, 50% of diabetic patients with A1c greater than 7.0 and 60% of patients with hypertension and blood pressure greater than 140/90 saw significant improvement. This shouldn’t be surprising: when patients have unlimited access to primary care, their behavior and lifestyle changes too. This creates better health outcomes long-term and improved prevention and management of chronic conditions. Healthier patients are able to be more productive at work, take fewer sick days, and be happier. This means you can improve your employees’ health and your overall healthcare costs at the same time.
Want to learn more about SolidaritUS and how you can cut costs while improving health outcomes?
Contact us today to learn more about what SolidaritUS can do for your business, talk to your broker today, or enroll directly here.