This week, President Donald Trump signed an executive order to require price transparency on hospital and physician fees. While this move will undoubtedly spark debate inside and outside of political circles, from a pure healthcare context, it can be viewed as a notable step towards patient-centricity and consumerism. And, for the direct primary care (DPC) movement, this is a major milestone in getting DPC recognized as a viable alternative to traditional, insurance-based primary care. By legitimizing DPC from a legislative standpoint, the government can shift the perception that DPC is a grassroots “wellness” approach and endorse it as an effective method of delivering high-quality primary care.
While this action does not offer changes to DPC-related legislation today, it does set the stage for DPC to be more widely adopted. Section 6 Part B of the executive order states:
“Within 180 days of the date of this order, the Secretary of the Treasury, to the extent consistent with law, shall propose regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under section 213(d) of title 26, United States Code.”
How does this impact DPC?
To date, DPC hasn’t been treated as a qualified health benefit. This means employers have to use post-tax dollars and impute income, making it both inconvenient and expensive to contribute to employees’ DPC memberships. With the proposed changes, it may become possible for DPC to be considered a qualified health benefit, thereby incentivizing employers to offer DPC in an effort to reduce health care costs.
Does this mean HSAs can be used for DPC?
While the executive order doesn’t specifically mention HSAs (health savings accounts) and is written vaguely enough to leave room for speculation, many in the DPC community hope that HSAs will begin to include DPC membership costs as an eligible medical expense, making it easier and more affordable for people to enroll.
While making DPC an HSA-eligible expense would be helpful for individuals and could generate some growth for DPC practices, it’s unlikely to make DPC the default primary care option for employer-sponsored HSAs. Employers cannot mandate that employees use their HSA funds on DPC memberships (or use them at all for that matter). In other words, just because DPC is an eligible medical expense, doesn’t mean the floodgates will open and employees will start using it. Employers still have to deal with education and awareness of DPC, and many employees have a difficult time interpreting their benefits as it is:
- Employee benefits are notoriously confusing.
- Employees are unpredictable and risk-averse.
- Businesses are extremely diverse in terms of size, needs, price sensitivity, and risk aversion. As a result, DPC adoption can vary widely from employer to employer based on the characteristics and behaviors of the employee populations.
In fact, encouraging DPC participation through the use of HSA funds would make it more difficult to drive sustainable, long-term enrollment from employees because of the lack of control employers have over their employees’ HSA utilization. The more effective approach would be to simply offer DPC as an employee benefit directly. This would increase DPC enrollment because employers would be offering DPC as the default benefit itself, rather than as a downstream option to another benefit (the HSA). Enrollment is crucial because, for large, self-insured businesses, improved access to primary care through DPC can drive down overall health care costs (i.e. reduce hospitalizations, ER visits, surgeries and the overall number of claims).
Awareness is still a challenge
All that to say, DPC doctors need to continue to raise awareness so employers realize the value of DPC to the employee and the potential for cost savings. It’s one thing for an HR manager to get in front of employees and tell them about it, but it’s another thing entirely to hear it from a doctor. Healthcare has become a frustrating maze of perverse incentives and confusing insurance policies. But, despite this, people still have respect and admiration for doctors. So, it’s crucial that DPC doctors take an active role in educating people and employers on how to use DPC.
Your white coat is your cape. Here’s what you can do to be a DPC ambassador:
- Speak with business owners or HR managers about how they can incorporate DPC
- Attend benefits seminars or town halls to educate employees.
- Schedule on-site time for employer wellness days, screenings, or enrollment events.
- Check with benefits advisors if their clients are interested in DPC and offer support.
- Coordinate with your peers in the area and work together!
If you don’t know where to start, reach out to us!
We’re connecting with employers that want to offer DPC and get doctors in front of their employees. If you want to grow your patient panel, you can engage with employees directly and we’ll handle the logistics and employer conversations. Also, If you know benefits advisors and other doctors that are interested in working with employers, we offer a free solution to streamline the process which we’re happy to share.