Primary care: the key to employee health and cost control

While many employers have chosen to increase the complexity of their benefit plans with multiple vendors and point solutions, the most effective strategy for improving employee health and controlling costs may be surprisingly simple: better access to primary care.

The primary care advantage

Primary care is the only element of healthcare where an increased supply is associated with better population health and more equitable outcomes. In the US, adults who regularly see a primary care physician have 33% lower healthcare costs and 19% lower odds of dying than those who only see a specialist. 

Having a long-term relationship with a primary care provider allows detection and treatment of issues early, before they develop into more serious or chronic conditions that may need intensive and often expensive care.

The math for employers is simple: when employees lack access to quality primary care, employers pay more for emergency room visits, chronic condition management, and hospitalizations. Unfortunately, America's fee-for-service healthcare system—which rewards volume over quality—allocates just 5% of healthcare spending to primary care. 

Designing plans that encourage primary care utilization

Employers are paying almost 70% more for employee healthcare now than they were a decade ago, prompting many to increase medical copays and deductibles to attempt to shift costs back to employees. While intended to encourage smarter healthcare consumption, this approach has shown to backfire. With 44% of US employees unable to cover basic needs for a dual-income household with two children, many forgo routine care until serious conditions develop—risking their health and generating higher costs.

Employers can redesign plans to encourage preventative care by:

Providing incentives for primary care visits

Rewards significantly increase primary care utilization, especially among those not intrinsically motivated by personal wellness. Plans can offer premium reductions or healthcare savings account contributions to members who designate a primary care provider, complete annual checkups, or undergo preventive screenings.

Reducing or eliminating primary care copays

Despite the Affordable Care Act's promise of no-cost preventive care, many people avoid routine physicals and screenings. They've learned that as soon as a diagnosis occurs, a visit is no longer classified as preventive, resulting in bills for the initial visit and follow-up testing.

Forward-thinking employers can waive deductibles for primary care and related diagnostic tests while reducing or eliminating associated copays to encourage proactive healthcare.

Reconsidering high-deductible plans for lower-income employees

While high-deductible health plans paired with health savings accounts help manage employer costs, research shows they discourage necessary care. Participants in these plans have worse health outcomes—higher risks of diabetes complications and metastatic cancer diagnoses that come five months later than those in low-deductible plans. These disparities widen for employees earning less than $75,000.

Employers should consider limiting high-deductible plans for lower-income workers or ensuring their medical savings accounts are adequately funded for primary care services.

Increasing primary care access

Encouraging primary care use is fruitless if providers aren't available. In rural areas especially, appointments can take months to secure. Even when patients see a provider, visits are often rushed. US primary care doctors typically manage 2,200-2,500 patients, while experts recommend less than 1,000 for quality care and provider well-being.

Companies investing in quality primary care can explore several models that employ providers with manageable caseloads:

On-site and near-site primary care

Many companies now offer primary care at their facilities or nearby locations, with 36% of large employers providing this benefit. On-site clinics offer convenience while reducing work absences. They work best in facilities with high employee concentrations.

Virtual primary care

Virtual care became mainstream during the pandemic and is now table stakes for any primary care provider. Through video appointments, employees can build relationships with providers and access care navigators who help find specialists and in-person services when needed.

This approach promotes health equity by eliminating cost barriers through low or zero copays, and helps employees in underserved rural areas access care while minimizing time off work. Additionally, digital health solutions increasingly integrate virtual primary care with remote condition management, creating affordable continuous care models that lead to better clinical outcomes.

Direct primary care and alternative financial models

Direct primary care removes physicians from the fee-for-service model. Employers pay a monthly fee per eligible employee to give them access to same-day appointments and other services. Doctors in this model see fewer patients—generally 400-600—allowing more personalized care.

More companies now subsidize direct primary care memberships for employees. While the model can seem like another cost center on the surface, the fee covers visits and tests the plan would otherwise pay for, plus preventive care that helps avoid costlier downstream treatments.

The long-term ROI

Over time, savings accumulate as preventive care helps employees avoid expensive treatments while staying healthier and more productive. In one mid-sized manufacturing company study, a well-designed direct primary care program saved more than $3,700 annually per enrolled member.

Good benefits brokers and consultants can help employers identify where employees lack necessary primary care and design strategies to build healthier workforces while controlling healthcare expenses—a win-win strategy that addresses both immediate and long-term healthcare challenges.

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