Under a traditional health care benefit plan, a patient tellsthe doctor what's wrong. Then the patient, insurance company, orself-funded employer pays the doctor for each of the things shedoes in trying to fix it.

For the past three years, that's not how things have worked atSeattle-based Becker Trucking. For Becker, funding employee healthcare is a little like paying for gym memberships.

The company pays Seattle-based Qliance, a defined primary carebusiness, $54 a month for every covered adult and $39 a month forevery covered child. Employees and their families see participatingQliance doctors as many times as necessary, from none to twice aweek for a worker that Becker CEO and president Frank Riordan calls“the biggest hypochondriac in Washington.”

There's no co-pay or additional cost for patients to see Qliancedoctors. Covered services include labs and imaging technology, anddoctors try to prescribe generic drugs, which are typicallyinexpensive. The company doesn't provide emergency room care,hospitalization, or outpatient care (such as chemotherapy) forserious conditions. 

For that, Becker relies on an insurance policy with an annual$5,000 deductible for each covered individual. The company pays thefirst $2,500 of individual claims on that policy. Workers pay theremainder.

“We've always provided medical and dental insurance for ourpeople,” Riordan says, “but it's so difficult to provide medicalcoverage.” When the company offered a fully insured plan throughRegents, that company wanted a 34 percent increase. The firmswitched to HealthNet, which wanted a 14 percent increase over theprevious year. 

The Qliance fee, by contrast, has stayed level. 

The employee reaction, Riordan says, “is all over the place. Forsome of my drivers it's good. You get an hour with the doctor everytime you go in for a physical. My industry is notorious for stillsmoking and for poor eating habits, and the doctors work to helppeople improve their overall health.” At least two employees havelost significant amounts of weight with help from Qlianceproviders, he says.

Those that don't use Qliance often prefer to see a doctor whodoesn't work for the company; gynecologists and pediatricians oftengenerate particularly loyal followings. Becker offers a traditionalmedical benefits plan for workers who want to see a non-Qliancedoctor. “Those people have more out of pocket expense—a co-pay onthe visits and so forth,” Riordan says. “The average age at thiscompany is 52, and they're not huge on change.”

Pros and cons

Some workers, however, are proving flexible. “So far I'm prettyhappy,” says Bruce Campbell, who drives a truck for Becker and usesa Qliance clinic for his health care. “I like the fact that there'sno out of pocket when you go. The doctors are nice—maybe too nice.They try to set aside an hour for each patient and, when you go tofix your hurt hand, they want to talk about blood pressure and howmuch exercise you're getting. It's a small complaint. I work 11 to12 hours a day, and that doesn't lend itself to exercise.”

Campbell recently went to the emergency room for a finger thathe hurt badly when he caught his hand in his truck's steeringwheel.  “In that case Qliance does nothing for you, but weunderstood that. If there's a drawback, it's that they are not a24/7 provider. I think the benefits outweigh those drawbacks,” hesays. “I train new guys and this is a selling point.”

The basics

Qliance is the brainchild of physician Garrison Bliss, who ran adirect care practice for about ten years and decided to expand theidea in 2006. Initially he thought of the model as a way to helpstressed physicians. 

“Environments were increasingly difficult for primary carephysicians, who were expected to do all they should do in seven toten minutes and were getting paid less and less to do that,” saysErika Bliss, the founder's cousin and Qliance's current presidentand CEO. “The reimbursement rates are so low that you have to seemany patients to make your practice work.”

Qliance employs its doctors and can count on a steady incomestream and reduced overhead, because the company doesn't hire theinsurance reimbursement specialists that help keep most traditionalpractices in the black. 

Doctors are each responsible for about 800 patients, down fromthe 2,000 to 3,000 they might see in another practice, and can earnbonuses based on patient satisfaction and quality ofcare. 

“We work with a lot of companies that have wellness programs inplace,” Erika Bliss says. “We can partner with the program that'sin place or offer wellness incentives on our own. We've gone onboats to give flu shots when a fishing company's people are onshore, for instance.”

The firm grew 65 percent between August 2011 and August 2012,with the majority of growth coming from employers and unions.“We're usually one choice of several, and the vast majority ofemployers we work with pay all or most of the monthly fee. Somehave a small cost share,” Erika Bliss says. “Some employers get agroup rate from us and then their employees can buy from us at thatrate.” Sometimes they couple it with a high deductibleplan. 

“More and more we deal with large, self-insured companies,” sheadds. Such employers save on overall costs within one to two years.They also bend the cost curve down, so that they see increases inline with inflation on what they're paying for overall healthcarecosts.

Reinsurance rate increases are typically smaller forself-insured Qliance customers, at least in part because theinsured populations are healthier. “It's easier to get reinsuranceif you've got lots of things that protect reinsurance companies,”Erika Bliss says, adding that Qliance is considering possiblepartnerships with reinsurance companies. 

Cigna, she says, is the first insurance company that has offeredcredits and discounts for employers using Qliance. The firm hopesothers will follow.

Working with brokers

Qliance works with brokers and third-party administrators.Broker Robert Anderson, who is vice president at BenefitsStrategies in Richland, Wash., has worked with a variety of plantypes, including primary care. 

Plans involving direct primary care pay him less than thoseinvolving traditional insurance, Anderson says, but make up for itin other ways. 

“You lower prices for your client and that could mean a lowercommission, but you'll have the employer as a client for a longerperiod of time and you'll have a more loyal client,” he says. “It'shard to pull an employer out of that plan because people like itand they're saving money. Brokers may make a little less per headbut they'll make it up in volume, because there's so much interestin this kind of plan design.”

Cutting costs

Another defined primary care provider is MedLion, based inMonterey, Calif. Samir Qamar, the company's founder and CEO, sayshe started the firm to help people who couldn't otherwise affordcare.

“I had a concierge, VIP medical practice, and my wife, HisanaQamar, had a more traditional primary care practice,” Qamar says.“In 2008 there was a huge decline in her practice because of theeconomy. People were reluctant to come in because they had losttheir jobs and the benefits associated with them. They found itdifficult to pay self-pay rates out of pocket.”

Preventive care went out the window. “People don't want to pay$200 to be told how to lose weight when they need to pay themortgage with that money,” Qamar says. His wife's incomesuffered. 

The couple decided to combine concierge medical practiceprinciples with a more affordable monthly fee. “We experimentedwith different monthly rates. We needed something that wassustainable from a business standpoint that didn't also scarepeople away,” Qamar says. 

The business began in late summer 2009. 

“We did the math and realized we were on to something. We sawhalf the patients but made more money because of decreasedoverhead, and we could keep patients healthier, which meant theydidn't come in every month,” Qamar says.

MedLion charges patients $59 a month, plus a $10 per-visitco-pay for “essentially unlimited” doctor visits, Qamar says. LikeQliance, MedLion doctors try to prescribe generic medications. Itsplan doesn't include labs and imaging, though the company has dealswith various labs, imaging providers and pharmacies that make theseservices and products less expensive for theirmembers. 

Unlike Qliance, MedLion doesn't employ its physicians directly.The company licenses its model to other physicians and takes apercentage of their income from direct primary care. The samedoctors can also accept insurance if they wish, allowing them tokeep their existing patient base. 

So far, Qamar says, most of MedLion's business has come frompeople who are self-employed or between jobs. “Businesses aren'tcoming to us. We're coming to them,” he says, with about 75 percentof MedLion's marketing dollars spent to reachbusinesses. 

“We helped a small business, an orthopedic practice, that waspaying a $1,500 deductible. They went to a $3,000 deductible withMedLion and saved 42 percent,” Qamar says. 

In addition to saving by paying less for primary care andreinsurance, a business could also use direct primary care to saveon worker's compensation claims. “When you absorb workman's compcosts into direct primary care, it doesn't get charged againstinsurance. At the end of the year, you don't see paid claimsagainst you and that reduces your workman's comp premiums,” Qamarsays.

A market shift?

MedLion is pitching its services to bigger companies. They hopea variety of factors will help them improve their marketpenetration. 

First, the combination of direct primary care andhigh-deductible insurance coverage will be an option on theinsurance exchanges that healthcare reform mandates. 

Second, Qamar says, “we've found a way to make costs qualifiedmedical expenses and therefore tax deductible for the company. Weequate it to direct medical care in the contracts.”

Up in Washington, Qliance is also looking to expand. A newclinic in January will offer on-site or near-site clinics foremployees to use while at work. “That clinic becomes part of theQliance network,” Bliss says, adding that an employee's home cliniccan still be in their neighborhood. 

“This is a total benefit option for primary care,” Bliss says.“It has the potential to completely shift the health care deliverysystem.”

As always, the market will decide.