For some employers, yes, and the reason has nothing to do with medicine. It's about incentives. Traditional insurance doesn't lose when your claims go up. In a lot of structures it does better. Direct Primary Care flips that: the practice gets paid to keep your people healthy, not to process what happens after they get sick. I talked this through with the founders of a Direct Primary Care practice I had on the show. This is a financial-leadership question, not medical advice, so treat everything here as a starting point for your own math, not something to hand your broker tomorrow morning.
The incentive problem, in plain terms
Here's how I put it back to them during that conversation: in the traditional model, the incentive is to drive claims up, because that's more bottom line for the insurance carrier. In the DPC model, the incentive runs the other way, drive cost down and get people healthy, because that's what keeps the relationship worth paying for.
Nobody built the traditional model to be malicious. It's just a business where a bad health year for your employees isn't necessarily a bad year for the people selling you the plan. One of the founders said it about as directly as you can: it's an intelligent design by the insurance industry, but it's built on the employer's back. That's their whole business case in one sentence.
The claim, and why you have to check it yourself
Their pitch, in plain terms, is that a large share of a company's routine health spend can be handled directly, in-house, so it never runs through the carrier's claims system at all. Routine visits, basic labs, the everyday stuff. The membership cost is predictable, and the theory is that catching things early and handling them directly keeps people out of the expensive parts of the system.
I want to be clear about what that is and isn't. That's their business making its case, not an independent DAT Finance analysis. The savings numbers any DPC practice quotes you are a hypothesis to test against your own claims history, not a fact to take at face value. Some employers see real savings. Some don't. It depends entirely on your current plan, your claims experience, and your workforce. So treat the sales pitch as the beginning of the math, not the end of it.
The one point in that conversation worth sitting with the longest wasn't a savings figure at all. It was this: smaller employers often can't even get their own claims data from the carrier. Below a certain group size, you're frequently told you're too small to see the numbers driving your own renewal. If that's you, you're renewing blind every year, with no way to know whether your premium increase reflects what actually happened or just reflects that the carrier controls every piece of the pricing puzzle and marks each one up along the way.
Why this is a CFO question, not an HR line item
Most companies handle the benefits renewal as an HR task: get the quote, pick a plan, move on. That's fine when health spend barely registers. It stops being fine once health spend is a real percentage of payroll, which it is for most companies in the size range I work with.
Ask these the same way you'd ask about any cost line that's grown without explanation:
- What percentage of total compensation cost is health spend, and how has that moved over the last three years?
- Do we actually have access to our own claims data, or are we just accepting whatever number the broker hands us at renewal?
- What would a DPC membership cost per employee, and what would it need to prevent, in ER visits or specialist referrals, to pay for itself?
- Is our current plan structure rewarded for controlling cost, or does it do fine no matter what happens to our claims?
None of this replaces a benefits broker or a benefits attorney. It's the financial framing that usually never happens, because nobody on the team is ever asked to think about benefits the way they'd think about a piece of equipment or a pricing decision.
Run the numbers before you touch anything
This isn't a recommendation to drop your group plan. It's a recommendation to model it the way you'd model any other recurring cost: what's your real spend per employee today, what would a DPC layer cost, and what would it need to save in avoided claims to be worth doing. Most companies never sit down and run that exercise, because health benefits get treated as fixed overhead instead of a cost center you can actually manage.
That kind of modeling, treating a cost you've always just paid as a cost you can actually manage, is core to what a fractional CFO does. DAT Finance works with healthcare-adjacent and other Sidney, Ohio area employers on exactly this kind of cost analysis, benefits included.
FAQ
Is Direct Primary Care a replacement for health insurance? Typically not. Most DPC arrangements pair with a high-deductible or catastrophic plan for major medical events. DPC covers primary care access directly; it isn't designed to replace hospitalization or specialist coverage.
How much can a company actually save with DPC? It varies widely, and any specific savings figure a practice quotes should be treated as a claim to verify, not a promise. Your real number depends entirely on your current claims experience and plan structure. Model it against your own numbers before you believe any headline figure.
Why can't small employers see their own claims data? Many carriers restrict detailed claims reporting below a certain group size. Below that, employers are commonly told the data driving their own renewal isn't available to them, which makes it very hard to judge whether a renewal increase is fair.
Is this medical advice? No. This is a financial framing of a benefits decision, not a clinical recommendation. Loop in your broker and a benefits attorney before changing anything about your plan.
Where do I start if I want to model this for my own company? Ask your broker point blank whether you can see your own claims data. Then build out your real cost per employee. If you want a second set of eyes on that math, DAT Finance works with healthcare and healthcare-adjacent employers on exactly this kind of cost analysis. Get in touch to talk through your numbers.