Why Self-Funded Health Plans Create a Different Opportunity

In yesterday’s post, we looked at Direct Primary Care as a better front door to the health care system.

But better access is only part of the story.

For employers, the financial structure of the health plan matters too.

In a traditional fully insured plan, the employer pays premiums to an insurance company. The insurer takes the risk, pays the claims and keeps whatever is left after claims and expenses.

A self-funded plan works differently. The employer is more directly responsible for the cost of claims.

That doesn’t mean the employer does everything alone. A self-funded plan may still use a third-party administrator, provider network, stop-loss carrier, pharmacy benefit manager, broker or consultant. To employees, it may look a lot like a traditional health plan.

The important difference is financial.

When the employer is paying claims more directly, reducing the actual cost of care matters in a new way.

If employees can get better care sooner, avoid unnecessary high-cost settings, and use high-quality, fairly priced options when more care is needed, the savings can flow back to the plan.

That creates an opportunity.

The employer is no longer limited to shopping for a slightly better insurance contract every year. It can start asking how care itself is accessed and purchased.

How do we make it easier for employees to get help early?

How do we keep a routine problem from becoming an urgent care or emergency room visit?

How do we help people navigate referrals, testing and next steps more thoughtfully?

Those are health care strategy questions—not just insurance questions.

And they point back to the front door.

A self-funded plan gives the employer a more direct interest in reducing the cost of care. Direct Primary Care gives employees a practical, relationship-based place to start before the cost escalates.

Put those ideas together and the fit becomes much clearer.

Tomorrow we’ll do exactly that: look at how DPC and self-funding can work together, and why that combination can be better for both the patient and the plan.

HELPcare Clinic is the only Direct Primary Care clinic in Southeastern Minnesota, with locations in Austin, Rochesterand Albert Lea. Check out our membership options for individuals and for employers.

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Lee Aase

Lee Aase is the founder of HELPcare LLC, which provides comprehensive membership, marketing and management services for provider-owned HELPcare Clinics, as well as metabolic health education and coaching for people interested in restoring health and reversing disease through lifestyle changes. Lee and his wife Lisa live in Austin, MN and have six married children and 20 grandchildren.