DirectPath: Turning Strategic Design into Real-World Savings
DirectPath: Turning Strategic Design into Real-World Savings. Few things are more challenging for a leadership team than making high-stakes financial decisions without the data to back them up. Yet, that is exactly what happens for many small and mid-size organizations during renewal season. Employers are handed extreme premium increases and are expected to absorb the costs with little insight into what is driving them.
At Conner Insurance, we believe there is a better way.
In our last edition of Benefits Architecture: Learn the framework. Elevate the design, we discussed Conner Insurance’s DirectPath. Built on a level-funded foundation, DirectPath helps small and mid-size employers gain more control over their benefits strategy and greater visibility into where their healthcare spend is going.
Starting in Indiana, DirectPath helped many small and mid-sized employers rethink their benefits strategy. The next step was to expand into additional states. DirectPath’s flexible design made it possible to adapt to different healthcare markets, provider networks, and employer needs — where traditional, one-size-fits-all plans may fall short.
A great example from Iowa.
Two years ago, we partnered with an Iowa employer of about 70 employees who were enrolled in a traditional, fully insured plan. Instead of searching for another cheaper carrier at renewal, we completely redesigned their healthcare strategy.
During the first year, we transitioned them to a DirectPath model using level-funded financing, reference-based pricing, and a transparent pharmacy benefit manager (PBM). Because DirectPath helps employers proactively manage their healthcare plan throughout the year, we didn’t stop there.
We introduced a direct contract with an independent surgery center located within driving distance of their office. To encourage employees to use the high-quality, lower-cost independent center, the employer waived all employee out-of-pocket costs for imaging and surgeries performed there. Information sessions and ongoing support were also provided to help employees navigate changes to the plan and feel confident with the transition.
The financial impact was immediate.
Here are two examples of how DirectPath created affordable and sustainable results within this organization:
- Colonoscopy: An employee needed a routine colonoscopy with polyp removal. At the independent surgery center, the total plan cost came to $2,995. The employee paid $0. If that same procedure happened at a traditional hospital, the typical insurance payout after discounts could have been $4,649 out of a $9,300 bill.
- The DirectPath strategy generated $5,602 in savings on a single procedure.
- Hysterectomy: Another employee required a hysterectomy. At a local hospital, the billed charges average $19,461, leaving the plan to pay $9,731 and costing the employee about $2,000 in out-of-pocket costs. By using the independent center, the total cost dropped to $7,080.
- The employee kept $2,000 in their bank account, and the company plan saved $10,381.
Now imagine the impact of redirecting 100 procedures like the colonoscopy. That’s more than $560,000 in unnecessary spend in a single year.
During the second year, we also incorporated access to Direct Primary Care (DPC). DPC gives employees and their families more convenient access to everyday healthcare through an employer-paid membership model. Utilizing access to discounted premiums through the stop
loss component of the plan, this employer was able to finance the cost of DPC enhancements. With this membership, employees and their families have access to:
- Unlimited primary care visits
- Routine laboratory services
- Imaging
- Generic medications
All provided with $0 out-of-pocket cost.
Continued success.
With a stronger foundation in place, the organization can focus on building and improving the plan over time, instead of starting over year after year. The savings continue to work toward creating a better employee experience and greatly impacting your organization’s bottom line.
If you have questions about DirectPath or would like to discuss your current benefits program, reach out today.
Cost figures, coverage details, and plan design elements presented in this blog are for illustrative purposes only and do not reflect any specific insurance policy or provider. Actual costs will vary based on your organization’s health plan, the insurance carrier, provider contracts, and the specifics of each medical situation. Employers and employees should refer to their official plan documents or speak with their broker or benefits consultant for guidance if needed.
