Society of Actuary Reports on Direct Primary Care’s Cost Savings

Society of Actuaries Report:

Primary Care is Foundational; DPC provides important new alternative Improves patient-doctor relationship Reduces ER visits and unnecessary care, lowers costs for employers

Improves physician satisfaction

The DPC Coalition and American Academy of Family Physicians spent two years in collaboration with Milliman and the Society of Actuaries on a comprehensive evaluation of Direct Primary Care (DPC) as a growing health care delivery and financing model.   The full report was published last week by the Society of Actuaries as a part of their ongoing research on health care cost trends. The Society of Actuaries report shows how the new and growing DPC financing and delivery model provides an alternative to traditional fee-for-service-based primary care, improving the patient-doctor relationship, reducing the fragmentation of patient care, as well as personal and professional satisfaction for PCPs.

This important research shines new actuarially sound light on how DPC generates system wide reductions in unnecessary health care utilization such as hospitalization, emergency department usage, radiology and certain diagnostics, and specialist care, leading to broad-based health care cost savings. “Primary care physicians (PCPs) are the front line of health care,” the report concludes.  “How often a patient accesses primary care, and the quality of that care, can have significant impacts on downstream costs and patient health outcomes.”  However, the study concludes, “while PCPs are almost universally acknowledged as essential to achieving the health care Triple Aim of providing high-quality care, at lower cost,” the current state of primary care as being in crisis characterized by physician burnout, large patient panels, and low pay for PCPs relative to other physician specialties with increased administrative burden and longer work hours. Key data points:

Virtual Care and Telehealth are at the core of DPC service offerings:

• 99% of all DPC practices surveyed were doing virtual consults via text/phone as a part of the membership fee (two years prior to COVID-19).
• 88% said they provided “telemedicine” benefits (meaning expanded video or additional digital communications assets).

Enrollment in DPC is associated with a reduction in overall member demand for health care services outside primary care:

• DPC members had 19.90% lower claim costs for employers on an unadjusted basis and 12.64% lower claim costs on a risk-adjusted basis during the two-year period.
• DPC members experienced approximately 40% fewer ER visits that those in traditional plans.
• DPC members experienced a 53.6% reduction in ER claims cost.
• DPC members experienced 25.54% lower hospital admissions on an unadjusted basis. While this figure may have statistically variance, it validates previous research trends showing a reduction in the use of hospitalization and more complex specialty care by DPC members.

DPC is Affordable Primary Care:

• The average adult monthly DPC Fee is $73.92. (DPC fees are paid on a monthly subscription basis).
• Concierge patients enrolled in an MDVIP membership pay an annual membership fee ranging from $1,650 to $2,200; MDVIP also bills third-party payers for all services provided to members.
• The median age for DPC patient was 31.8 years old, v. 36.1 for traditional insured (PPO).  The survey finds the member mix did not vary materially between the DPC option and traditional option.

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