Landing DPC Employer Contracts, Part 3: How to Find and Engage Self-Funded Employers

There’s nothing that can take your direct primary care (DPC) practice to the next level like landing an employer contract, but they can seem overwhelming to negotiate. In this five-part blog series, join me as we cover the most fundamental aspects of finding, engaging, and closing deals with businesses of all sizes to get them promoting your DPC clinic as part of their employees’ healthcare.

In this third part, we’ll cover some of the most robust tactics for finding and successfully engaging with self-funded employers. For a primer on what these businesses are and why you want to be involved with them, check out our first article in this series.

The final two parts of the series will follow soon, but if you don’t want to wait, you can download our full ebook on DPC employer contracts right now: “Secrets of Direct Primary Care: 5 Keys to Landing Employer Contracts.”

Key #3: Know How to Find and Engage Self-Funded Employers

Once you’ve identified that self-funded employers are the best fit for a DPC practice, and you’ve learned how to communicate your value to them, the next step is to find some in your area and engage them.

Finding Self-Funded Employers

Size may be the strongest independent predictor of whether a company self-funds. “These are groups with 200+ employees, typically,” says Megan Freedman of the FMMA, and she’s right. According to a 2011 study sponsored by the U.S. Department of Labor, nearly half of all businesses with 200 to 999 employees have a self-funded health plan, but this fraction drops below one in twelve for companies with fewer than 49 employees.1 Happily, there are many such medium-to-large firms to go after, with the U.S. Census Bureau reporting more than 100,000 businesses with 100 employees or more, a set of organizations which, in total, employs over 80 million people (66.3% of the workforce).2

While firm size is predictive of self-funding, it is far from the only important factor, so don’t write off smaller businesses in your area immediately. The Department of Labor study, for instance, also identifies features of companies with fewer than 200 employees that make them disproportionately likely to self-fund. These include having a workforce with 35% or more of its members younger than age 27 (nearly 4x as likely to self-fund), being located outside of a southern state (2–3x), and being unionized (2x). Check out tables 3.3 and 3.4 in the full report for more details, and you can get a leg up on potential leads in your area.

Chart: Likelihood of self-funding by company size. A company is dramatically more likely to self-fund as it grows in size. Data adapted from table 3.2 of Eibner et al.

Engaging Self-Funded Employers

Finding all of the self-funded employers in the world won’t help if you can’t get in front of their decision-makers to pitch your plan. Luckily, while engaging these companies can be tricky, it’s not impossible. Here are five proven approaches to use:

1) Professional Networking

Professional networking and promoting not only your specific practice but DPC in general to the business community were oft-cited as being productive tactics.

“More than anything, it’s about education,” said Dr. Jeffrey Davenport of One Focus Medical. “You have to talk to the same businesses over and over again. To most people, DPC is new and they don’t even know about it. I used the local chamber of commerce, referral groups like BNI (Business Network International), things of that nature, places where you can meet someone and shake their hand. It can take some effort and patience because they want to tell you about their business and you want to tell them about yours, but it does help.”

Paths to employer engagement can be hard to predict; don’t discount opportunities.

Dr. John Birky of Wellspring Family Healthcare echoed this sentiment, saying he had fairly regular presentations with his local chamber of commerce, and Ms. Freedman similarly concurred: “Chamber meetings are really good for getting in front of the people who write the checks.”

Interestingly, all of the successful DPC physicians I spoke with independently related that their paths to employer engagement via networking were most often circuitous and hard to predict.

“I did a Rotary Club, I did a Lions Club. The point is, take any opportunity to talk to four or five individuals or more,” said Dr. Davenport. “I even did a society of medical transcriptionists meeting because one of my patients was a medical transcriptionist. I don’t think I got a single patient, but I did educate about 25 people, and you never know how that spreads: 6, 8, 10, maybe 12 months later, someone shows up because A told B told C, and D is here now.”

2) Personal Networking

You can also tap into your existing connections to see if you may be only one or two people away from a good employer lead. Sometimes, you might find that you’re already connected directly to an opportunity.

“The first company I ever signed up, the owner was one of my patients,” said Dr. Davenport. “He came over from my fee-for-service practice, liked the DPC model, and brought his company on.”

Ms. Freedman of the FMMA has heard that story from other DPC physicians, too: “They may have CEOs among their patients already. They should find out what their patients do and talk to them.”

Organic media exposure is the most effective advertising, both in terms of cost and impact.

This tactic can also be successful even if your patients don’t have high-level influence within a company. Dr. Davenport, for instance, noted that it is useful to understand where your patients work, since at least part of the reason they were attracted to your model of medicine likely had to do with the benefits situation at their workplace. “Get a couple people in the door, and they’ll tell everybody else at the company how fantastic it is. You get that word of mouth inside a company of 300 people that already has an HRA (Health Reimbursement Account) set up, and the news will spread like wildfire because you’re getting attention in fertile ground where the employees don’t have actual out-of-pocket expenses to see you.”

3) Getting the Word Out

Advertising is a conflicted topic among DPC physicians. Everybody agrees that exposure is critical, but getting that exposure in a cost-effective way seems to be easier said than done, and this may go double for reaching decision-makers at companies.

Above all, media exposure that you get organically (i.e., that you don’t pay for) appears to be the most effective type, both in terms of cost and impact. Aaron Monson, COO of Zenith Direct Care, noticed the biggest uptick in interest for his organization after a local TV news station ran a segment on medical practices with new business models. “They contacted us out of the blue, and we picked up two companies as a result of that news spot.”

Crucially, Mr. Monson also added that “the news station only found us because of a robust internet marketing campaign that was already in place. They went searching for direct primary care and found Zenith Direct Care at the top of a Google search. What may have seemed like a lot of wasted marketing dollars to that point suddenly paid off in one internet search.”

Of course, you can’t count on free TV coverage, but you may be able to get your practice discussed in print, on the radio, or on the web simply by figuring out what you have to share that people find valuable and interesting.

“I did everything from print to shopping carts, and while advertising does get you some face recognition, creating press is always the best,” said Dr. Khayriyyah Chandler of Chandler Wellness Care. “The best print I had was an article done on me instead of an advertisement. I have a friend who’s good at that, too; she figures out how her thing is important enough to cover.”

Ms. Freedman extended this thought to the organic promotion that happens natively on social networks. “Social media is significant for getting DPCs in front of decision-makers. If they’re willing to put their practice out there and advertise to specific groups of people, it works.”

And there is reason to believe that direct primary care is gaining interest in the public consciousness, providing increasing opportunities for media coverage. Informal data from Google News suggest that news sources as a whole have been referencing the term at a rate that is growing both exponentially (r2 = 0.989) and faster than those of other common terms. Is DPC on track to become more American than baseball or apple pie? Biased in-house analysis says “yes.”

4) Working with Upstream Service Providers

Upstream providers or coordinators of health benefits include third-party administrators (TPAs), insurance brokers, and benefits consultants. These organizations typically have multiple medium-to-large companies as clients, and they often play an important role in advising these businesses when picking or constructing plans. If you find one that is willing to work with you (and other DPC practices), then you can benefit from warm introductions to important decision-makers.

“If you find a TPA or a broker who has the right motivations, then there is value in DPC physicians working directly with them.”Megan Freedman, FMMA

Dr. Birky noted success with this approach: “I had pitched a company, and they went to their benefits consultant to have them check me out. It then worked out to build a relationship with that benefits consultant, who had multiple clients. If the benefits consultant can pitch you to [a client], then they say ‘Let’s get started. What does the contract look like?’ Otherwise they don’t know you and are suspicious.”

Ms. Freedman had a similar perspective, but with a note of caution: “If you find a TPA or a broker who has the right motivations, then there is value in DPC physicians working directly with them. They can connect you to employers. It really depends on the broker, though; many of them are making a lot of money on the status quo. If they’re making a percentage of anything, then they have no incentive to see claims go down.”

The membership of Ms. Freedman’s FMMA includes independent TPAs and other upstream providers that have an interest in DPC practices, making it a likely useful starting point for physicians looking to establish such relationships.

5) Avoiding Human Resources (HR)

There was also general agreement that approaching a company’s human resources (HR) department should be nearly a last resort in your engagement attempts. “Talking to HR people was a waste of time. You have to get to the CEO, COO, CFO, someone who can get the big picture,” said Dr. Davenport. “Although sometimes you do have to start with HR because you can’t just knock on the door and ask to speak to the owner of a business.”

Ms. Freedman paralleled this thought: “You need to get in front of the numbers person, and most human resources people have too much on their plate already. You’re going to want to talk to the CFO or CEO, sometimes the broker directly.”


These tactics should get you on your way to finding and engaging self-funded employers, so test them out and let us know how it goes! While you work on that, however, don’t forget about all of the smaller employers that are out there; you’ll want an approach for them, too. Join us next time, in part four of this series, where we’ll cover the playbook that you’ll need to appeal to and land contracts with small and medium employers in your area.

Or, if you don’t wait to wait, get our full ebook on DPC employer contracts right now: “Secrets of Direct Primary Care: 5 Keys to Landing Employer Contracts.”


References:

  1. Eibner, C. et al. Employer Self-Insurance Decisions and the Implications of the Patient Protection and Affordable Care Act as Modified by the Health Care and Education Reconciliation Act of 2010 (ACA). (RAND Corporation, 2011).
  2. United States Census Bureau. 2014 Statistics of U.S. Businesses (SUSB) Annual Data Tables: U.S. & states, totals. (United States Census Bureau, 2016).

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