Studies show that patientsenrolled in direct primary care practices have 59 percent fewer ERvisits, spend 30 percent fewer days admitted to the hospital andare referred to specialists 62 percent less often.

As Dave Chase writes in “The CEO's Guide toRestoring the American Dream,” ”Step one [in fixing the health caresystem] is to accept that you run a health care business. It'slikely your second largest operating expense after payroll. Justask your CFO. You'd probably prefer not to run this business, butit's there, whether you like it or not.”

Yet even if they acknowledge this truth, most CEOs, CFOs andCOOs are too consumed with running their businesses to take steptwo; that is, to spend the time and emotional energy required tolearn about the specific ways in which health care in America is broken. As a result,their health care strategy remains the same year after year. Theycontinue to accept the increase (typically around 9percent) in insurance premiums that their benefits brokernegotiates for them and continue to transfer health care costs totheir employees by raising deductibles.

Related: 4 reasons employer-sponsored health insurance won'tgo away

This strategy isn't sustainable. According to a survey fromMilliman, the cost of health care for a typical family of fourcovered by an average employer-sponsored preferred providerorganization (PPO) plan in 2017 was $26,944.

Further, the survey notes, of the $26,944 spent by a family offour, $11,685 is paid by the employee—a combination of $7,151 inpayroll deductions for the premium and $4,534 in out-of-pocketcosts. That comes to 43 percent of expenses paid by the employeecompared to 57 percent by the employer.

Why is health insurance so expensive? Because health care is soexpensive. But why is health care so expensive? Contrary to popularopinion, it's not because the unit cost of health care hasincreased. In Chase's book, Jeanne Pinder says, “cash or negotiatedself-pay prices for many procedures vary little from year to year.”Health care is expensive because third-party insurance carriershave kept the true cost of health care opaque so that consumerscan't comparison shop. And it's expensive because there's anepidemic of unnecessary health care overutilization.

For example, in 2010, $29.7 billion was spent in hospitalizingpatients for potentially preventable complications of conditionslike diabetes, congestive heart failure, and osteoarthritis. Theseare only three conditions among many that primary care doctors areexpert at managing. So why the failure to manage them effectivelyin an outpatient setting? Because patients lack timely access toprimary care. And even once they gain that access, their primarycare physicians have too little time to spend with them. Accordingto Merritt-Hawkins, in 2017, the average length of time primarycare appointments last is only 15.7 minutes.

Unlike fee-for-service primary care, direct primary care offers24/7 access to and a surplus of time with primary carephysicians—often an hour or more at each visit. As a result,studies show that patients enrolled in DPC practices have 59percent fewer ER visits, spend 30 percent fewer days admitted tothe hospital, are referred to specialists 62 percent less often,have 65 percent fewer radiology exams, and 80 percent fewersurgeries. Because of this, some employers who self-insure—and whoare therefore responsible for paying their employees' medical billsout of their own pockets—have saved as much as $260 per member permonth on health care expenses.

In sum, companies that commit to spending more money upfront onprimary care (which represents perhaps 2 percent to 5 percent of acompany's total health care spend) can expect to spend far less ondownstream care like ER visits, specialty visits, surgeries, andx-rays, which represent perhaps 40 percent to 60 percent of acompany's total health care spend.

Yet the ability to rein in health care costs isn't the onlything DPC offers employers; it also offers them a way to win thetalent war. According to McKinsey senior partners Scott Keller andMary Meaney: “A recent study of more than 600,000researchers, entertainers, politicians, and athletes found thathigh performers are 400 percent more productive than average ones.Studies of businesses not only show similar results, but alsoreveal that the gap rises with a job's complexity. In highlycomplex occupations—the information- and interaction-intensive workof managers, software developers, and the like—high performers arean astounding 800 percent more productive.”

High-quality employees are in high demand. Attracting andretaining the best talent can make the difference between a companysucceeding and failing. Workers carefully compare the differentbenefit packages that prospective employers offer them. Fewcompanies are able to use their health benefit packages to enticeprospective employees.

But with DPC, this changes. Most companies cover the cost of themembership fee for their employees, which means employees can nowenjoy a direct relationship with a primary care doctor who respondsto their calls, emails, and texts immediately; who gets employeesin for office visits the same day or the next day as many times asnecessary; and who can spend as much time with employees as theyneed—all at no cost to employees. What employee wouldn't considerthat the best health benefit they've ever been given?

Direct primary care doesn't just improve access and quality ofcare, it reduces the cost of care by reducing unnecessarydownstream health care over-utilization. For a self-insured companythat pays its employees' medical bills out of its own pocket, DPCrepresents not only one of the best ways to control costs, but alsoby providing better service to its employees, a way to attract andretain the best talent.

Want to learn more about direct primarycare? 

• Direct primary care 101
• Search direct primary care The evolution of directprimary care – with Jon Hernandez
• Direct primary care helps employers get more whilepaying less

Alex Lickerman is a physician, formerassistant professor of medicine, former director of primary care,and former assistant vice president for Student Health andCounseling Services at the University of Chicago. He currentlyleads a direct primary care private practice in Chicago calledImagineMD.