As medical utilization, chronic disease and pharmacy spending continue to push employer healthcare costs higher, direct primary care gives organizations a practical way to influence how and where healthcare dollars are spent.
For employers, another year of significant healthcare cost increases is taking shape. Aon projects that employer healthcare costs will rise 9.5% in 2027, pushing average costs above $19,000 per employee. [1]That would mark the fourth consecutive year of near-double-digit increases, with employer healthcare cost increases more than doubling since 2022, from 3.7% to 8.8% in 2026.[2]
Other projections point to similar pressure: WTW reports that employers expect healthcare costs to increase 11.1% next year, which would represent the steepest increase in more than 20 years[3]. At the same time, employers are already absorbing more than 80% of health plan costs, while the average employee is expected to spend nearly $5,300 on healthcare in 2026.[4]
For a 500-person organization, an average annual cost of $19,000 per employee represents approximately $9.5 million in healthcare spending. Another 9.5% increase would add roughly $900,000 to that expense before accounting for workforce growth or other changes.
At that scale, healthcare spending becomes much more than a benefits issue; it is part of the organization’s broader financial strategy. Significant annual increases can directly affect how much capital is available for employee compensation, recruitment, expansion, new services and other investments. As employers plan for another year of rising costs, the question is increasingly where they have an opportunity to meaningfully influence that trajectory.
Understanding What is Driving Employer Healthcare Costs
There is no single factor behind today’s healthcare cost increases. Employers are confronting a combination of higher medical utilization, increasing prevalence and complexity of chronic disease, continued growth in pharmacy spending and higher prices throughout the healthcare system.
Many of these forces are difficult for an individual employer to control. Employers cannot determine what a hospital charges, prevent the introduction of another high-cost specialty drug or eliminate the
possibility of a major medical event. What they can influence is how employees access and use healthcare before they reach some of the most expensive parts of the system.
That distinction becomes important when looking at medical utilization. When employees have difficulty accessing primary care, healthcare needs do not disappear. A sore throat that cannot wait several days for an appointment still needs to be addressed. The same is true when a child develops an ear infection over the weekend or an employee develops symptoms after traditional office hours. Without an accessible primary care option, employees may turn to urgent care or the emergency room because it is the most readily available choice.
The same dynamic can occur over a longer period with chronic disease. Employees managing diabetes, hypertension, high cholesterol or other conditions need consistent monitoring and follow-up. When scheduling, out-of-pocket costs or other barriers make that difficult, routine care can be delayed until the condition requires more complex and potentially more expensive intervention.
For employers looking at where healthcare dollars are going, these utilization patterns matter. They also represent an area where direct primary care can provide a more accessible and predictable pathway to care.
Changing Where Care Happens First
Direct primary care provides members access to primary care for a predictable monthly membership fee. It is designed to complement insurance, which continues to play an important role in covering hospitalizations, surgeries, specialty care and other significant medical needs.
The difference is where employees begin.
At Hy-Vee Health Exemplar Care, membership includes primary care and care for many urgent needs, with same-day and next-day appointments and extended hours available at many clinic locations. That gives employees another option for common healthcare needs that might otherwise result in a higher-cost encounter simply because care is needed outside traditional office hours.
Improving that access can change utilization: internal Hy-Vee Health Exemplar Care employer data has shown a 40% reduction in emergency room visits, a 22% decrease in outpatient visits and a 20% decrease in overall claims costs.
Importantly, those results are not driven by limiting care. Direct primary care is built around making care easier to access. The financial opportunity comes from helping employees receive the right care in the right setting, including addressing routine concerns in primary care rather than allowing access barriers to push them toward more expensive settings.
Addressing the Long-Term Cost of Chronic Disease
Avoiding unnecessary emergency room utilization is one of the more immediate ways employers can think about the financial impact of better primary care access, but it is not the only one. Chronic disease management represents another important opportunity because these conditions can generate healthcare spending over many years.
Managing conditions such as diabetes, hypertension and high cholesterol requires regular follow-up, medication management, monitoring and an ongoing relationship with a provider. When employees interact with healthcare primarily through episodic visits, it can be difficult to maintain that consistency. A condition may be addressed at one appointment, but follow-up can become another scheduling challenge and another out-of-pocket expense.
Direct primary care is structured differently. Members can establish an ongoing relationship with a provider and return for follow-up care without an additional copay for each visit. That creates more opportunities to monitor conditions, adjust treatment and address changes earlier.
Medication access can also be part of that equation. Hy-Vee Health Exemplar Care offers approximately 40 common medications in its clinics that are included with membership. When appropriate, a member can see a provider and leave with medication the same day, reducing another layer of cost and friction associated with routine care.
For employers, the potential financial value extends beyond the cost of an individual appointment or prescription. Better chronic disease management can create more opportunities to intervene before manageable conditions contribute to higher-cost specialist care, emergency visits or hospitalizations.
Healthcare Spending Competes with Other Business Priorities
One of the challenges with employer healthcare spending is that annual increases are often discussed primarily as a benefits problem. For executive teams, however, the impact reaches much further into the organization.
Consider an employer facing a 15% to 25% increase in healthcare costs. Depending on the size of the organization, that increase can quickly become a seven-figure expense. Absorbing it may mean making difficult decisions elsewhere: delaying hiring, limiting salary increases, reducing other benefits, postponing expansion or shifting capital away from strategic priorities.
This is why lowering employer health costs is not simply about finding the least expensive health plan. It is about determining where the organization can create greater predictability and make healthcare dollars work more effectively.
Direct primary care can be one component of that strategy. By creating a predictable cost for primary care while helping employees use lower-cost settings appropriately, employers have an opportunity to influence a portion of healthcare spending that can otherwise be difficult to manage.
There is also an important behavioral component. Changing the healthcare model only works if employees understand where to go for care. Employers introducing direct primary care need to clearly communicate that the membership is intended to be the first stop for primary care, common urgent needs and ongoing health management. Over time, establishing that access point can help change how employees navigate the broader healthcare system.
Looking Beyond the Annual Renewal
As employers prepare for 2027, much of the benefits conversation will understandably focus on the size of the next increase. But the annual renewal number only tells part of the story. Leadership teams also need to understand what is driving utilization within their employee population and where they have realistic opportunities to intervene.
That includes examining whether emergency room utilization could have been appropriately managed in primary care, whether employees with chronic conditions are consistently engaged with a provider and whether cost or scheduling barriers are contributing to delayed care. It also means considering whether employees have a clear, accessible first point of contact when they need healthcare.
Direct primary care will not eliminate medical inflation, rising specialty drug costs or high-cost claims, and it is not intended to replace comprehensive insurance coverage. What it can do is give employers greater influence over an important part of healthcare spending: the everyday decisions employees make about when, where and how they access care.
That opportunity becomes more important as annual increases compound. A 9%, 10% or 15% healthcare increase does not remain isolated within the benefits budget. Over time, those costs affect the organization’s ability to invest in its workforce, compete for talent, expand operations and pursue other strategic priorities.
Employers cannot control every force driving healthcare costs higher. But they can take a closer look at the parts of the healthcare experience they can influence. For many organizations, improving access to primary care is a practical place to start.
Learn more about offering direct primary care membership to your team.
[1] https://aon.mediaroom.com/2026-08-20-Aon-U-S-Employer-Health-Care-Costs-Continue-Multi-Year-Climb,-Projected-to-Rise-9-5-in-2027
[2] https://aon.mediaroom.com/2026-08-20-Aon-U-S-Employer-Health-Care-Costs-Continue-Multi-Year-Climb,-Projected-to-Rise-9-5-in-2027
[3] https://www.wsj.com/health/healthcare/u-s-workers-are-paying-more-for-healthcare-and-next-year-will-be-worse-0924d0dd?mod=e2li
[4] https://aon.mediaroom.com/2026-08-20-Aon-U-S-Employer-Health-Care-Costs-Continue-Multi-Year-Climb,-Projected-to-Rise-9-5-in-2027