Written by Dr. Joel Warshaw | Published on Thursday, August 13th, 2015

Recently, we discussed how concierge medicine/direct care practices and self-funded health insurance employers are the perfect fit, offering significant benefits to both parties. Related to this is the collective cost of providing healthcare to individual employees. These costs can vary significantly, depending on the health and wellbeing of the individual.

In recent years, there has been a tremendous interest for insurance companies and businesses (both public and private) to promote healthy lifestyles and preventative care to employees. This approach has been shown to reduce illnesses and missed work, thereby providing a more productive and healthy workforce. By doing so, revenues increase while cutting down on costs, especially healthcare expenditures.

However, healthcare costs continue to rise at alarming rates. To compensate, many companies are now converting their employee health coverage to a self-funded plan with stop-loss insurance to cover catastrophic claims.  According to a study by the Employee Benefit Research Institute, about 59% of private sector workers with health coverage were in self-insured plans in 2011, up from 41% in 1998. The number is even higher among large employers, with 82% of companies having more than 200 employees choosing to self-insure. Of all these self-funded healthcare expenses, only 10% are fixed, leaving the other 90% variable. This has led many companies to explore ways to reduce this cost.

The Link Between a Dedicated Concierge Physician and Lower Healthcare Costs

Concierge Medicine has been growing around the country since it was first introduced back in the 1990’s. In this model, a Physician will typically drop out of all insurance reimbursements and completely rely on direct pay from patients for financial support. In return, the Physician will reduce his/her normal panel size from a typical panel of 2,500 patients to a cap of 600-800 members. This allows for a much more accessible physician that is able to offer higher professional services, many of which are detailed below.

Knowing that healthcare costs are decreased by improving lifestyle factors associated with disease, preventative screening, and early diagnosis, there is a significant opportunity for concierge physicians to work with corporate clients to offer the highest possible care to individual employees as part of their benefits plans. The better the care, the lower instance of chronic or preventable disease.

Here are a few factors that allow the concierge physician to reduce healthcare costs to the employer:

  • Patients have 24-7 access to their Primary Care Physician via phone, office visits, or email, leading to a higher level of personal care. 
  • Employees have access to Telemedicine and other technological advancements which improve patient monitoring and care. Another benefit to the employee/patient is greater access to specialists and less time away from work commuting to doctors appointments and enduring waiting room experiences.
  • This high level of personal and preventative care reduces the frequency of illness, therefore there is a lessened need for sick days and doctor visits.
  • Decrease in costly Emergency Room/Urgent Care visits and hospital admissions.
  • Immediate relief in primary care doctor fees and common tests and procedures.
  • Maximum cash flow to the business, as claims are funded as they are paid, rather than based on prepayment (an insurance plan).
  • Up to 3% savings due to the elimination of state taxes for self-funded insurance plans (in most cases).

As a concierge physician, have you helped your corporate clients reduce employee healthcare costs as a result of your relationship?