Direct primary care and reference-based pricing: Is it a match made in heaven?

“Direct primary care and reference based pricing can work really well together to create an alternative to self-funded plans,” said Omar Arif, SVP of Growth – ClaimDOC in Des Moines, Iowa, who moderated a panel of experts at the “Direct Primary Care and Reference Based Pricing: A Match Made in Heaven” session at Broker Expo in Atlanta.

The direct primary care (DPC) model is when the employer shifts their money from paying for services and instead moves that investment into a direct primary care relationship and reference-based pricing (RBP) helps make health care spending more consistent and predictable because reimbursement using a reference point, typically the Medicare fee schedule when calculating claim payments. This combination “can’t be beat from a cost perspective but also from a member experience perspective,” said Arif.

Here is how the panel of direct primary care experts deliver the combination of DPC and RBP to deliver a cost-effective, sustainable benefit plan to their own clients:

Scalable solution: “It’s no longer a question” of what the direct primary care model is, said Nathan Houghton, Manager DPC Solutions – PeakMed Direct Primary Care. “It is viable. It is scalable … It is a proven alternative model … My role is to work with consultants and third party administrators that scale and manage DPC for your clients. Probably the biggest barrier of entry for self-funded clients is that even if you as advisors and TPAs believe in the model you have to be able to package it for the client in a way that will be successful.”

Improve quality of care: “We now do DPC in 9 out of 10 plans that we build, but when you ditch the BUCA [Blue Cross, United Healthcare, Cigna, and Aetna], it’s not an easy path for the member, for the employer, for the consultant,” said David Contorno, CEO of E Powered Benefits in Mooresville, North Carolina. “However,  when you properly imbed DPC into a plan, not only do you substantially  improve the quality of life for the patient and further reduce costs for both the employer and patient but you do something that I as an insurance agent I never thought I would do is you. You improve the lives of doctors because they’re sick of the traditional model. When you support the DPC model, their lives are better. They have less patients. They know their patients deeper. They spend more time with them. That is one of the benefits.”

Model for the future: “Doctors are burning out at levels that are unheard of,” said Alex Lickerman, MD, founder & CEO, ImagineMD in Chicago. “They’re delivering substandard care. Doctors are not business people. We have to lead the way. I really believe direct primary care is the model for the future.” Lickerman was former director of primary care at the University of Chicago for 20 years before he left to launch ImagineMD.

“DPC and RBP is a win for everybody the broker, the vendors, the members, the employers and the doctors,” concluded Arif.