How Small Businesses Are Cutting Healthcare Costs With Direct Primary Care

For many businesses, the traditional health benefit model is reaching a breaking point. According to Mercer's National Survey of Employer-Sponsored Health Plans, average cost per employee rose 4.5% in 2024, 6.0% in 2025, and is projected to rise even further in 2026, to 6.7% – the highest increase in 15 years. These rising premiums, coupled with a 9.4% surge in prescription drug costs have left many organizations with no choice but to shift the financial burden onto their employees.

However, a growing number of businesses are breaking this cycle by adopting Direct Primary Care (DPC) – a model that prioritizes the doctor-patient relationship over insurance bureaucracy and has been linked to lower downstream healthcare costs.

What is DPC, and is it built for Small Businesses?

Direct Primary Care is a subscription-based model where employers pay a flat monthly fee (typically between $50 and $150) per employee, giving each employee access to as many primary care visits as they need, with no per-visit charge. While large corporations are often slow to pivot, the DPC movement is being driven by smaller firms. Data from Hint Health reports that 58% of employer sponsors currently offering DPC have fewer than 10 members enrolled, demonstrating that the model is uniquely accessible for small teams.

Actuarial Proof: Measuring the Outcomes

The shift toward DPC isn't just about convenience; it is supported by objective analysis of its outcomes. A multi-year study by Milliman and the Society of Actuaries found that DPC enrollment was associated with significant reductions in high-cost healthcare utilization: 

Total Healthcare Utilization: Decreased by 12.6%.

Emergency Department Visits: Dropped by 40.5%.

Inpatient Hospital Admits: Reduced by nearly 20%.

By providing same-day access and longer appointment times (often 30–60 minutes), DPC clinicians are able to address chronic issues like hypertension and diabetes before they escalate into expensive medical crises.

The Impact on Your Team

In today’s tight labor market, DPC serves as a powerful recruitment and retention tool. Research published in Industrial and Organizational Psychology found that employees engaged with a DPC provider reported significantly higher levels of job satisfaction, patient satisfaction, and perceived organizational support.

This satisfaction is reflected in the numbers: DPC boasts a Net Promoter Score (NPS) of over 70. Furthermore, 85% of employers who sponsor DPC choose to keep the benefit after the first year, because employees who get it tend to genuinely rely on it.

A Modern Solution for 2026

The case for DPC has become even more compelling due to recent regulatory shifts. On January 1, 2026, the IRS re-classified DPC arrangements as qualified medical expenses and thus HSA-compatible. This allows employees on High Deductible Health Plans to use pre-tax HSA funds for DPC fees, removing one of the final barriers to mass adoption.

The Bottom Line: For the small business owner, DPC offers a way to regain control over healthcare spending while providing a benefit that employees actually value and use. It is a transition from "buying insurance" to investing in health.

Contact us at [email protected] to talk through what Direct Primary Care could look like for your team. 

References:

1. https://www.mercer.com/en-us/solutions/health-and-benefits/research/national-survey-of-employer-sponsored-health-plans/ 

2. https://www.hint.com/hubfs/HintEmployerTrendsDPC2025_6.pdf 

3. https://www.soa.org/resources/research-reports/2020/direct-primary-care-eval-model/ 

4. https://www.cambridge.org/core/journals/industrial-and-organizational-psychology/article/abs/employee-response-to-employersponsored-direct-primary-care/8E1CEDF86E5D711B1EF4E331301DCF02 

5. https://www.irs.gov/newsroom/treasury-irs-provide-guidance-on-new-tax-benefits-for-health-savings-account-participants-under-the-one-big-beautiful-bill