Employers buying primary care directly are doing what capitated systems do, on a smaller scale and with a shorter payback window.
The primary care course made the case that primary care is the center of every population-based payment model. Employers reached the same conclusion independently and act on it directly, through onsite and near-site clinics, contracted advanced primary care providers, and dedicated navigation services.
What employers buy
The arrangements vary in form but share a structure. The employer pays a fixed amount per employee per month for enhanced primary care access rather than paying fee-for-service claims for each visit. In exchange members get same-day or next-day appointments, longer visits, direct messaging with a clinician, and often on-site or near-site convenience.
The elements are the same ones the primary care course covered: empanelment, team-based care, redesigned access, and proactive management rather than visit-triggered care. What differs is who pays and why.
The theory of the case
The employer’s expected return comes from four sources:
| Source of return | How it works |
|---|---|
| Site of service | Care delivered at a fixed monthly rate instead of at hospital-affiliated fee schedules |
| Referral steering | A primary care clinician paid by the employer refers into preferred, lower-priced specialists and facilities |
| Avoided utilization | Better access reduces emergency department use for conditions primary care can handle |
| Productivity | Less time away from work for care, which is a real benefit no health plan captures |
The productivity channel is worth noting because it is the one benefit unique to the employer. A health plan does not gain when a member spends less time getting care. An employer does, which is why onsite clinics can be rational for an employer even when the pure claims math is marginal.
The structural problem
The investment case runs into a fact that has no equivalent in Medicare. Median employee tenure with a current employer was 3.9 years in January 2024, down from 4.1 years in January 2022 and the lowest since January 2002. For younger workers it is far shorter, while “the median tenure of workers ages 55 to 64 (9.6 years) was more than three times that of workers” in the youngest groups.
Investments in prevention and chronic disease control commonly pay back over five to ten years. An employer with a median tenure under four years captures only part of that return, and the rest accrues to whichever employer or insurer covers the person later.
Worth remembering: this is a genuine externality, not a failure of employer commitment. Every employer faces it, each rationally underinvests in long-horizon health improvement, and the aggregate result is systematic underinvestment in exactly the interventions with the largest long-run value. It is also why the returns employers pursue first are the fast ones, site of service and referral steering and avoided emergency visits, rather than the slow ones. Medicare, covering people until death, has no such problem, which is one reason the most patient capital in population health is public.
Key takeaways
- Employers buy advanced primary care through a fixed monthly payment rather than fee-for-service claims.
- Returns come from site of service, referral steering, avoided utilization, and productivity.
- Productivity gains are unique to the employer and are invisible to a health plan’s claims analysis.
- Median tenure of 3.9 years truncates the payback window for long-horizon prevention, causing rational underinvestment.
Sources
Check your understanding
Why does an employer purchasing advanced primary care face a harder investment case than a Medicare Advantage plan does?
Median tenure with a current employer was 3.9 years in January 2024. Prevention and chronic disease management often pay back over longer horizons, so a share of the benefit accrues to whoever covers the person next.