ATTN: Milliman. Even if Union County had not waived the $750 deductible, the County still would still have lost money on DPC.

The lead actuary on Milliman’s study of direct primary care has suggested that the employer (Union County, NC, thinly disguised) would have had a positive ROI on its DPC plan if it had not waived the deductible for DPC members. It ain’t so.

Here’s the Milliman figure presumed to support that point.

https://www.soa.org/globalassets/assets/files/resources/research-report/2020/direct-primary-care-eval-model.pdf

It is true that removing the $31 figure of Line H, would lead to a tabulated result of total plan cost of $347, which would suggest net savings.

The problem is that the $61 figure of Line J of the Milliman report has been too low all along — and by more than $31.

Milliman got the $61 by estimating the plan cost of DPC membership, rather than learning what it actually was. $61 was the result of Milliman applying a 60:40 adult child split to fee levels drawn from Milliman’s survey of $75 adult and $40 child. But the publicly recorded contract between the DPC provider, Paladina, and Union County set the fees at $125 adult and $50 child, and $95 is the correct composite that should have been in Line J, representing $34 PMPM missed by Milliman.

Accordingly, even if the $31 cost that fell on the County for waiving the deductible is expunged from the calculation, the total plan costs for DPC would work out to $381 and would still exceed the total plan costs for FFS. The County’s ROI was indeed negative.

I can not tell you why Milliman used estimated fees of $61 rather than actual fees of $95. But doing so certainly made direct primary care look like a better deal than it is.

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