Direct-to-employer primary care strategy

Tags: D2E, direct-to-employer, Rosen health clinic, Texas Academy of Family Physicians

Direct-to-employer primary care strategy

By Dr. Jed Constantz

A growing number of primary care physicians have demonstrated the ability to “negotiate” direct working relationships with self-funded employers in an effort to secure more favorable “working conditions” that facilitate their ability to understand and meet the needs of an employer’s “covered individuals.” Lessons can be taken from employer interest, adoption, and use of so-called on-site or near-site clinics designed to provide highly customized care for employees and, at times, employee family members. Probably one of the most successful efforts is the Rosen Health Clinic established by Rosen Hotels in Orlando, Florida. The Rosen Health Clinic is an example of a “ground up” primary care clinic built by Harris Rosen, CEO of Rosen Hotels. In this instance, Harris Rosen sought to address the health care cost and quality challenge by beginning at the beginning — primary care. Mr. Rosen, and his team, applied basic business principles to designing and developing a strong business model for primary care finance and delivery. After all, it was his money, his decision, and his choice.

On-site and near-site clinic companies and sources of primary care have learned from the Rosen model and have developed like-minded approaches to helping employers control the total cost of care, improve the health status of covered individuals, and drive high levels of satisfaction among benefit plan participants. These basic “triple aim” efforts recognize how basic and fundamental the goals are and should be in the care and treatment of an employer’s covered individuals. As such, the focus for the direct negotiation of a working relationship need not be overly complicated or unnecessarily protracted. The steps involved in the process include the calculation of the future value of primary care and the expected deliverables driven by that calculation.

The Texas Academy of Family Physicians has spawned an initiative to establish a template set of materials that supports those employers and sources of primary care, seeking to engage in the direct purchase of or the negotiation for advanced primary care. This initiative is straight forward in nature. Employers — also recognized as purchasers of health care for their covered individuals — need a framework they can work from that simplifies the conversation in order to simplify the negotiation and thereby ensure a more balanced arrangement that respects their role as purchasers and respects the obligation primary care assumes in the care and treatment of patients. Sources of primary care likewise need a framework they can work from to facilitate a deeper understanding by purchasers regarding their capabilities and financial needs in meeting the terms and conditions of a directly negotiated arrangement.

Purchasers, through the National Alliance of Healthcare Purchaser Coalitions, have offered seven key attributes of advanced primary care as an invitation to all sources of primary care to present themselves for the direct purchase of care and treatment of covered individuals. These seven attributes emerged from a deep-dive assessment process where sources of primary care submitted information and data about their existing characteristics and patient-level commitments leading to high value, affordable health care for an employer’s covered individuals. These attributes include enhanced access for patients, more time with patients, realigned payment methods, organizational and infrastructure backbone, disciplined focus on health improvement, behavioral health integration, and referral management. While these attributes may appear obvious, the details behind the information and data submitted by the deep-dive participants reflect the broad characteristics of physician leadership, primary care team, practice level technology, and a commitment to ongoing staff training and development as key components of continuous quality improvement.

Physician leadership speaks to the commitment of the individual doctor caring for patients, and his or her acceptance of accountability for the delivery of triple aim results for the covered individuals they accept as patients under this arrangement. The care team speaks to the talent that surrounds the physician and the alignment of that care team to the needs of the patient cohort and the skill gaps of the physician. The practice-level technology is that technology leveraged by the physician and the care team to ensure a deep understanding of patient needs, and the design, development, and execution of a balanced care plan aligned with those needs. Ongoing staff training and development recognizes the need to challenge team members with ever increasing performance expectations and to support that challenge with a sophisticated curriculum that measures where each team member is and where they need to be for the benefit of patients.

Compensation for primary care must equal the expectations of primary care. To that end, a comprehensive or prospective primary care payment model must be adopted to ensure both cash flow and maximum flexibility for the alignment of care delivery with the needs of patient cohorts. Calculating the future value of primary care is the first step in determining what a comprehensive compensation model could or should look like to support the purchase of high value, advanced primary care. Doing the math, in this sense from the purchaser’s perspective, is an opportunity for the purchaser to spend the same or less money more intelligently. Consolidating primary care spending with primary care practices suggests the redirection of dollars associated with preventive care, acute care, wellness services, disease management, and care management and coordination to primary care. These dollars can be reduced to a per patient per month investment in primary care.

The project at hand is to develop a turnkey D2E strategy built on a standardized business agreement involving the calculation of a comprehensive payment. This comprehensive payment would be consistent with the needs of the purchaser and the capabilities of the source of primary care. This business agreement would spell out the desired, and mutually acceptable, deliverables from the source of primary care consistent with the needs of the purchaser and their covered individuals. Finally, this business agreement would speak to the methodology for value-based reporting, by the source of primary care, focused on measures that matter. These measures that matter would strive to address basic triple aim deliverables, simple improvement in the health status of covered individuals, control of the total cost of care, and high levels of satisfaction among the parties. Beyond this, it is up to purchasers and sources of primary care to step forward and leverage this effort for the benefit of their respective communities.


Dr. Jed Constantz is a primary care finance and delivery reform strategy consultant. In his more than 30 years of experience in the health care industry, he has worked with payers, employers, and physicians to implement solutions that improve efficiency and quality outcomes while reducing costs. He is now the principal strategist at Advanced Primary Care Strategies.



5 questions for TAFP CEO Tom Banning


TFP: On a macro level, why do you think direct-to-employer contracting for primary care services is something the Academy should explore?

TB: More and more employers are finding it increasingly challenging to offer comprehensive health insurance benefits to employees. The third-party payment system we have is inefficient, costly, and not sustainable. Employers are looking for solutions to provide care to their employees, and direct contracting is one strategy they’re utilizing. The employer bypasses the traditional relationship most have with an insurance company to negotiate directly with physicians. It cuts out the middleman in rate negotiations, aligns the interests of those paying for care and those providing care, increases transparency, leads to more efficiency (i.e., higher value at lower cost), and ideally achieves value-based care.

TFP: Does this model cut insurance carriers out completely?

TB: Not necessarily. Direct contract arrangements can vary. An employer may choose to directly contract for a comprehensive set primary care services or single services, like COVID testing or administering vaccines. It does not necessarily mean the end of dealing with insurance companies. An employer may use a third-party administrator or insurance company to cover higher cost services like specialty care, hospitalization, and pharmaceuticals or to manage claims and physician payment.

TFP: What if the employer only offers the primary care services and doesn’t provide other coverage options?

TB: If the employer chooses not to provide more comprehensive coverage, then the employee would need to strongly consider buying wrap coverage or catastrophic coverage.

TFP: What do you think the major obstacles might be for a practice to enter into a D2E contract?

TB: Scale and geography. Multi-national companies with employees spread across the country, like IBM or Southwest Airlines, want a single health care solution that can be administered across all the geographic regions where its employees live and work. It’s simply not practical for an employer to negotiate hundreds or thousands of direct contracts across the country. That, however, is not the case for large to mid-sized employers whose employees are geographically concentrated. It can also take time to negotiate terms of the contract and an agreed-to price for services.

TFP: What is TAFP hoping to offer that will help physician practices make this happen?

TB: Our plan is to offer resources including case studies and recommended contract language to help physicians decide whether partnering directly with employers makes sense for their practices.


Creating a turnkey direct-to-employer primary care strategy


The design and development of value-based care reporting driven by an agreed upon set of “measures that matter” focused on the total cost of care, improvement of covered individual health literacy and health status, and increased patient satisfaction leading to high level patient activation.


Convenient access, same-day appointments, walk-ins, virtual access, no financial barriers to primary care

Enhanced patient engagement and support, shared decision-making, understanding preferences, social determinants of health

Patient-centered experience and outcomes, quality and efficiency metrics, deemphasize visit volume

Relevant analytics, reporting and communication, continuous staff training

Risk stratification and population health management, systematic approach to gaps in care

Screening for BH concerns (e.g., depression, anxiety, substance use disorder) and coordination of care

More limited, appropriate and high-quality referral practices, coordination and reintegration of patient care