Direct Primary Care Layered Into Level Funded: The Integration That Works and the One That Is Marketing

Direct primary care provides unlimited primary care access through a fixed monthly membership fee, bypassing insurance for primary visits. The DPC model has grown from approximately 100 practices in 2009 to over 2,100 practices nationwide by 2023, with 58 percent of all DPC memberships in 2024 coming from employer sponsorship. The integration that works is structural: DPC as a carved in primary care layer paired with a higher deductible wrap around level funded plan, with claims integration and member routing. The integration that is marketing is cosmetic: DPC added alongside an unchanged plan with no design adjustment and no routing. The distinction between these two approaches is the clearest example in this series of why benefits architecture matters.

What DPC Is and How It Works

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The DPC model operates outside the insurance billing system. Members pay a monthly fee directly to the DPC practice, typically ranging from $50 to $150 per adult with lower fees for children. In exchange, the member receives unlimited primary care visits, often same day or next day access, extended visit times of 30 to 60 minutes compared to the typical 15 minute primary care visit, direct physician communication through text, email, and phone, and basic labs and procedures included in the membership.

DPC practices do not bill insurance for primary care services covered under the membership. They are not in insurance networks. They accept no third party payment for the services included in the membership fee.

The membership model eliminates the administrative overhead of insurance billing, which various estimates place at 25 to 40 percent of primary care practice revenue. This allows smaller panel sizes and longer visit times. A traditional fee for service primary care physician may have a panel of 2,000 to 2,500 patients. A DPC physician typically serves 400 to 600 patients. The smaller panel enables the access model that DPC promises.

Research published in the Journal of General Internal Medicine in 2024 presented a financial analysis comparing a hypothetical DPC practice with a traditional fee for service practice. The analysis found that a DPC practice servicing 1,000 patients with two physicians could yield upwards of $25,000 in annual cost savings over a comparable fee for service practice while providing more personalized patient care. The analysis noted that DPC may contribute to a more financially sustainable primary care model by minimizing the involvement of intermediaries such as insurance companies.

The employer sponsored DPC market has matured since the early adoption phase. According to Hint Health’s Employer Trends in Direct Primary Care 2025 report, employer sponsored DPC represents an 18 percentage point increase since 2022. Retention data suggests this is not a short term experiment: 85 percent of employers remain with DPC one year after launching, and 70 percent continue at two years. The strongest per capita adoption appears in Minnesota, Wisconsin, and Colorado, with South Carolina leading the nation at 95 percent of DPC clinicians serving employers.

Major DPC vendors serving the employer market include Marathon Health, Nextera, Paladina (now part of Everside), and Vera Whole Health. These vendors operate on site and near site clinic models for employers large enough to support dedicated facilities. Smaller employers access DPC through local independent practices or regional DPC networks. The delivery model affects the integration question: a large employer with an on site DPC clinic has different integration options than a 25 person employer contracting with a community DPC practice.

The Integration That Works

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Structural integration pairs DPC with a redesigned level funded plan. The employer sponsors a DPC membership for all employees as the primary care access layer. The level funded plan is redesigned around the DPC access: a higher deductible because the member’s primary care is covered through DPC rather than insurance, with wrap around coverage for specialist, hospital, and catastrophic care. The stop loss structure reflects the higher deductible. The member’s first point of care for non emergency needs is the DPC physician.

This integration works when four conditions are met.

First, the plan design is adjusted to reflect DPC access. If the DPC membership covers primary care, the level funded plan should not also cover primary care at first dollar. The higher deductible captures the cost savings from DPC. An employer paying $100 per employee per month for DPC memberships and maintaining the same level funded plan design as before has added cost without capturing savings.

Second, the member is routed to DPC for primary care needs. This requires member education and navigation. The member must understand that the DPC physician is their primary care provider, that they have direct access, and that the DPC physician should be their first contact for non emergency health needs.

Third, claims data integration allows the TPA to see whether DPC utilization is reducing downstream specialist and emergency department claims. The TPA cannot measure the value of DPC if they cannot see whether members using DPC show lower specialist referrals, lower ED utilization, and better chronic disease management than they would without DPC access.

Fourth, the DPC practice reports utilization data to the TPA. DPC does not generate claims data because DPC does not bill insurance. But the DPC practice can report encounter data: which members are using the DPC benefit, what conditions they present with, how often they access care. This reporting enables the analytics that determine whether DPC is producing value.

The structural logic is sound even where outcome data is thin. If DPC provides better primary care access through same day appointments, longer visits, and direct physician communication, and if that access routes appropriate care to primary care that would otherwise go to the emergency department or a specialist, then downstream claims on the level funded plan should decline. The higher deductible reduces the plan’s exposure to the primary care claims that DPC now handles.

The Integration That Is Marketing

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Cosmetic addition adds DPC as an extra benefit alongside the existing level funded plan. The plan design does not change. The deductible does not change. The member has DPC access and insurance primary care access simultaneously. There is no routing: the member can see the DPC physician or go to an in network primary care provider, with no incentive to use DPC first.

This fails for three reasons.

Utilization splits. Some members use DPC, some use the insurance network. The plan captures no measurable cost reduction because the plan design does not capture the savings from DPC utilization. The members who use DPC may have lower claims, but the premium and deductible structure is unchanged, so the employer pays the same amount regardless of which members use DPC.

Cost addition. The DPC membership is an additional cost on top of the unchanged plan premium, with no offset mechanism. The employer is paying for DPC and paying for primary care coverage through the level funded plan. One of these costs is redundant.

No claims integration. The TPA cannot see whether DPC utilization is reducing plan claims because the plan design does not create the measurement conditions. Without the higher deductible that shifts primary care cost to DPC, there is no baseline against which to measure DPC savings.

DPC vendors who sell into the employer market frequently present this model as innovation. It is not. It is benefit addition without design change, and it is the clearest example of accretion rather than architecture in the benefits space.

Evidence Gaps and Selection Effects

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The honest assessment of DPC outcome data requires acknowledging what is known and what is not.

Most published DPC cost studies are produced by DPC practices or advocacy organizations with commercial interest in favorable results. The Hint Health data cited in this article comes from a DPC software platform. The Plum Health and other practice publications are from DPC practices marketing their model. This does not mean the data is wrong; it means the data should be read with the source in mind.

Selection effects are significant. Employers who adopt DPC tend to be more engaged with employee health, and their workforces may be healthier or more health conscious than average. A comparison showing that DPC employers have lower claims than non DPC employers may reflect employer selection rather than DPC impact.

Two doctoral dissertations published in 2024 examined DPC programs that had been cited as success stories. One study concluded that savings in claims costs fell short of offsetting the employer’s investment in DPC monthly fees. The other concluded that total medical service expenditures for employees enrolled in DPC rose by more than the amount paid in monthly DPC fees, finding that DPC increased expenditures by $107 per member per month in the examined program.

The structural argument for DPC integration is stronger than the outcome data supporting it. The logic is sound: better primary care access should reduce emergency department utilization, specialist utilization for conditions that could be managed in primary care, and complications from poorly managed chronic conditions. The outcome data supporting this logic is developing, not established.

The article does not dismiss DPC. DPC may produce value for employers who implement it structurally. The distinction between structural integration and cosmetic addition is what determines whether the logic can translate to outcome. An employer evaluating DPC should ask whether the plan design is being changed to capture DPC savings, whether members are being routed to DPC, and whether the data integration exists to measure the result. A vendor selling DPC without addressing these questions is selling marketing, not integration.

Closing

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DPC layered into level funded is a design decision, not a product addition. The integration that works requires plan design change through a higher deductible that reflects DPC primary care access, member routing through education and navigation, and data integration that enables measurement. The integration that is marketing adds cost without structural change.

The evidence base is developing. Selection effects make interpretation difficult. The structural logic is sound even where outcome data is thin. An employer considering DPC should evaluate whether the vendor’s implementation model creates the conditions for structural integration or whether it simply adds a benefit alongside an unchanged plan. The distinction between these two approaches is the clearest illustration in this series of why benefits architecture matters more than the individual components within it.