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Bucking the Trend of Rising Health Benefits Costs

June 3rd, 2022 | 2 min. read

By Everside Health

Many of the problems in the U.S. health system—fragmented care, variable quality, and rapidly rising costs—find their source in fee-for-service payments, where providers are paid per visit, test, or procedure. It creates a perverse incentive for providers and healthcare systems to recommend unnecessary and expensive care without coordination, leading to increased costs for both patients and employers.

Fee-for-service is a broken system

According to a 2021 national survey from an HR consultancy:

  • Health benefits costs per employee rose 9.6% from 2020 to 2021 among smaller self-insured employers (50-499 employees)
  • That equates to a nearly $15,000 price tag per worker
  • Rx spending rose 7.4% among larger employers in the same time frame
  • Driven by an 11.1% increase in specialty prescriptions

More spend equals better outcomes? Not quite. While health expenditure per capita is $12,500 (more than double peer countries), the U.S. has the:

  • The lowest life expectancy
  • Highest number of preventable hospitalizations
  • The highest chronic disease burden and an obesity rate two times higher than peer countries 

Physicians are struggling, too

This failure in healthcare is due in part to clinicians being overburdened and overstressed: Several studies have estimated burnout rates at 50% or greater among U.S. physicians, with even higher rates estimated among primary care physicians.

  • 2,200 patients – The average patient panel in fee-for-service healthcare
  • 5 mins – the average talk time patients get in the traditional fee-for-service model
  • An average 24-day wait to schedule a primary care visit

Fee-for-service health care prioritizes billing and scheduling over people. It compensates physicians for volume, not quality of care. The result is a primary care Net Promoter Score (NPS) of -1.7, indicating patients are fed up with the status quo and choosing to avoid the doctor entirely.

Your workforce deserves better

Fortunately, you and your workforce don’t need to settle for healthcare as usual. Direct primary care is a value-based model that shirks fee-for-service pitfalls. Incentives are based on patient outcomes, not patient volume. Instead of rushed appointments, providers get ample time with their patients to set goals and collaborate on a care plan, thanks to smaller patient panels.

It’s why 99% of Everside providers report improved satisfaction with their work, and 97% report better patient-provider relationships. It's how a cost savings analysis of Everside's clients--using a methodology independently validated by actuarial firm Millliman--shows:

  • an average 17% gross savings by Year 3,
  • 31% gross savings by Year 5,
  • and an annual spend trend of <1.5% vs the 6-7% industry average

Low to no copays and a suite of health services—including primary and preventive care, occupational health, mental health, virtual care, prescriptions, and more—mean workers stay engaged with their health benefit.

And a flat recurring fee for employers means the end of rising and unpredictable costs. It means year-over-year savings that open the door to reinvestment in other benefits. And most importantly, it means a healthier workforce that’s happier, more productive, and more likely to be retained.