Micheal Schneider is the Chief Executive Officer of Joe East Enterprises, Inc., a privately held company in the security services and retail industry and parent company of A-1 Locksmith. In the second of our three-part series regarding the legal future of DPC and HSAs, Mr. Schneider shares what led to his organization to incorporate DPC into their healthcare strategy and why he is so passionate about advocating for DPC to be considered an HSA-eligible expense.
What was your health plan strategy prior to implementing a direct primary care program, and what were the reasons or “tipping point” that led you to your decision to shift gears?
We were on a fully-funded plan prior to implementing a DPC program, facing 15-20% increases in premium costs each year at renewal. We accepted the rising costs and never asked too many questions. We assumed the increases were just "how it was." However, the introduction of the Affordable Care Act (ACA) and the costs that came with it forced us to stop and think about how our company plan was serving both us as an employer and our employees.
After researching our options, we decided to move to a partially self-funded plan (wrapped with a stop-loss) and began paying closer attention to claims with new access to the actual cash cost per employee. The results were eye-opening, and having that data changed everything. We realized that if we were going to spend the money to provide health benefits, our employees needed better, faster, high-quality access to preventative care. By doing so, we could address potential larger health issues (i.e., larger claims) before it was too late.
I came across an article in a magazine about how direct primary care works and decided to get in touch with Dr. James Pinckney, an old high school friend and co-founder of Diamond Physicians. Using myself and my family as a beta test, we tried out the direct care model and I knew it was the right solution for my employees, as well. With the help of Accresa and its ability to facilitate the provider selection and payments aspects of the model, A-1’s new direct care benefit was born.
What are a few of the most significant results you (as an employer) have experienced following your transition to a DPC-centric benefits model?
First and foremost, we’ve seen tremendous cost savings. While employees were more likely to make appointments for minor illnesses such as a cough or cold, providers took the time to understand their medical and family history, and in some cases, were able to address high-risk factors that may have put them at risk for things like heart attacks or diabetes down the line. Addressing those future high-dollar claims before they become problems has saved us more money than I can imagine and has improved the general health of my employees.
Secondly, from a business perspective, the time saved has been a huge benefit for us. Every time an employee is out of work due to illness, we lose money. Access to direct primary care has allowed my team to get access to care immediately, get better faster, and thus back to work faster. This in and of itself has been invaluable to us as an organization.
What drove you to become a DPC advocate/participate in the DC trip with the Accresa team?
The traditional healthcare system is broken and bloated, and tax benefits around providing direct primary care don't exist. It made me think: if Washington doesn't do something about this, other small businesses like mine will have no incentive to focus on the health of their employees. Those same people might then be forced into the exchange, or worse, become a Medicare expense to the American taxpayer, with no better access to care than they had before. Through lobbying efforts, Accresa is fighting for small businesses like us, and I feel a duty to join the fight and advocate for my employees, their families, and my peers.
What do you think is preventing DPC from being mainstream? What would you hope to see happen, in order to remove these barriers?
Unfortunately, I believe it’s typical Washington gridlock. The benefits of DPC resonated with everyone we met with in DC, from both sides of the aisle, however, nobody wants to take ownership of the problem (or the solution).. There is power in numbers. I think educating more business owners on what a direct primary care model can do for their company, and being able to extract data from those programs, will be the push Washington needs.
In the conversations you had with lawmakers in DC, what were some gaps you identified in how they understood DPC? What misconceptions were you able to address?
One of the things we would like to see happen, to enable further expansion of DPC, is to make it a qualified medical expense so that employers can fund DPC benefits through a health savings account (HSA), and so employees can use HSA funds to pay for DPC membership fees. A big misconception as it relates to this issue seems to be that HSAs are for the wealthy, and DPC is concierge medicine for the wealthy, by a different name. This is false. Come see my employees who make $40k a year and have to provide for their families. See how DPC has changed their healthcare experience, improved their health outcomes, and, see how having this additional tax benefit would encourage more businesses like mine to wake up and take control of their healthcare costs AND be able to offer better benefits to their employees.
Check out the other blog posts in this series:
- Part 1 | Advocating for DPC + HSA Legislation: A Recap of Our Trip to Capitol Hill with Donna Wilkinson, Legal Counsel, Ameriflex/Accresa
- Part 3 | Advocating for DPC + HSA Legislation: How Diamond Physicians is Improving Patient Outcomes and Decreasing Physician Burnout with DPC with Dr. James Pinckney II, CEO and Founder, Diamond Physicians