Primary care remains underutilized in most self-funded plans. Employees and dependents continue to go to specialists and ER for services which can be more cost effectively treated under primary care setting. Meanwhile due to lack of “significant” demand, primary care physicians are seeing more patients, spending less time with each one and increase their income by frequently using lab testing and imaging. These unnecessary ER visits and tests end up eating a big bite of the plan budget.


This challenge provides an opportunity to the employer to re-define primary care benefit based on predictable costs and specific outcomes.  A design where easily accessible, low-intensity  longitudinal care is provided by primary physicians in a lower cost, high-value primary care setting.


This benefit can be delivered in a “carve out” model by direct partnership between employer & PCMH (patient-centered medical home) or “included” in the broader plan contracted with an ACO or an integrated health system.


Most most employees, the primary care can make up 80-90% of healthcare. The primary care must include preventive care as well as routine visits. Depending upon the capabilities of the partner network, you may choose to include chronic care as well.

For any service that lands outside of that should be closely overseen by the designated primary care physician.

Plan Goals

Besides keeping workforce healthy, the plan goals should specifically include:

  • Reduction in total claim costs for employees and dependents.
  • Significant reduction in ER and outpatient claims.
  • Metrics to measure improvement in chronic care management.

Plan Design

For primary care, VBID (value-based insurance design) can be an innovative solution to maximizing health outcomes with available health care budget.  The basic premise of VBID is to align consumer incentives and payment strategies with value by reducing barriers to high-value health services.

For example, you can choose to reward members for selecting PCP at enrollment and reduce or eliminate copays for office visits, annual physical exam, physical examinations, gyn visits, mammograms, cancer screening, smoking cessation, weight management etc.  This will redirect care to the primary care setting to help you eliminate inefficient and unhealthy healthcare system access downstream.

Any additional costs for such incentives can be balanced by raising co-pays and/or co-insurance for using “unnecessary” ER visits.

Payment Model

Services in this model should be paid for through subscriptions. Employees should enroll in the medical home, and physicians should be paid a risk-adjusted amount per enrolled member per month. The risk adjusted score can be based on a mutually agreed methodology for determine low, moderate and high risk members.

Low Risk: Healthy members with very limited need of care.

Moderate Risk: Members with one or more chronic condition.

High Risk: Members with multiple chronic illnesses, and who are accessing healthcare regularly.

Provider Incentives

To better align physicians, you may choose to add incentives (based on health outcomes and other metrics) on top of the subscription costs.

Plan Metrics

Since the goals of the new model is to improve general health, redirect care to primary care setting, manage chronic conditions and manage referrals, metrics should include-

  • Reduction in PMPM costs for specialist, ER and Outpatient care.
  • Reduction in overall claim costs.
  • Improvement in health outcomes based on conditions managed in care plans. For example, how average drop in HbA1C levels for all members enrolled in diabetes intervention programs.
  • Number of referrals managed.
  • Member engagement in their care plans.
  • # of same day/next day appointments.
  • HEDIS metrics for primary care

Talk to us about how our health insurance solution can reduce costs, improve health outcomes and provide you better visibility &  control over your health benefits.

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