Congress Held a Hearing on Direct Contracting and Health Costs. DPC Was at the Witness Table.

Chad Savage told a House subcommittee on Wednesday that an Arizona employer using direct primary care saw a 14% drop in emergency department visits. Nomi Health CEO Mark Newman, at the same witness table, cited Michigan employers who cut medical spending by 29%. The hearing ran under a title that left nothing to guess: “Direct Contracting: A Prescription for Lower Health Care Costs.”

This was DPC’s day in front of Congress. The Subcommittee on Health, Employment, Labor, and Pensions, part of the House Education and Workforce Committee, convened the hearing under Chairman Rick Allen, a Georgia Republican. Four witnesses testified. The argument stretched for hours: can employers actually cut healthcare costs by contracting directly with providers instead of routing everything through an insurer?

The employer case

Three of the four witnesses said yes.

Newman’s pitch was structural. Employers cover nearly half of U.S. healthcare spending but have almost no visibility into what things cost. Nomi Health builds direct contracts between employers and providers: the employer pays the provider, the insurance layer comes out. Newman cited Michigan employer clients who cut medical spending by as much as 29% even as statewide commercial healthcare costs kept climbing. “There is a real price of healthcare that exists,” he told the committee. “If you simplify the system down to its core, where a provider can deliver care and get paid for it, that’s the nugget that unlocks everything in employer health.”

Savage, who founded YourChoice Direct Care and serves as president of DPC Action, kept the focus on primary care. His argument: DPC pushes routine care into the cheapest setting in the system, and that reduces ER visits downstream. “Primary care is the cheapest place to access care,” he said. “By freeing up space within the primary care arena, we will actually have lower ER utilization, which helps everyone.” DPC Action, the advocacy nonprofit Savage leads, has spent several years building the case for the model on Capitol Hill.

James Gelfand, president and CEO of the ERISA Industry Committee, backed the model from the employer buyer’s side. Witnesses cited data showing that nearly one in four healthcare dollars goes to waste.

The pushback

Brad Woodhouse, president of Protect Our Care, was the fourth witness. His testimony focused on the legislative backdrop surrounding the hearing.

H.R. 1, the reconciliation package working through Congress, could strip coverage from roughly 15 million Americans: about 10 million through Medicaid reductions and 5 million through the end of ACA premium subsidies. Woodhouse argued that employer savings from direct contracting won’t hold if millions of newly uninsured people start showing up in emergency rooms. “There is no doubt that all these millions of people are losing coverage,” he said. “People show up at the emergency room. They have to be cared for.”

Rep. Bobby Scott pressed on whether employer contract negotiations can address hospital cost burdens from uninsured patients. His question highlighted a tension in the hearing: direct contracting works as a cost strategy for employers with covered employees, and H.R. 1 would leave millions without coverage entirely. The hearing grew contentious when Rep. Randy Fine, a Florida Republican, accused Woodhouse of misrepresenting CBO coverage estimates. The Republican majority voted to sustain Fine’s objection.

What This Means

A House subcommittee put direct primary care and direct contracting at the center of an employer healthcare cost hearing and entered real outcome data into the congressional record. The data came from live employer programs, not projections. The 29% spending reductions and 14% ER visit drops are now available to benefit consultants, employer HR teams and anyone building a business case for the model.

The partisan divide will shape what comes next. Republicans framed direct contracting as a market-driven fix for insurance inefficiency. Democrats argued the conversation is beside the point if millions lose coverage under H.R. 1. Both positions will influence how DPC fits into whatever healthcare legislation this Congress produces.

Congress is paying attention to DPC in a way it wasn’t two years ago. Between the HSA eligibility changes earlier this year, the ongoing fee cap debates and now a hearing with the president of DPC Action at the witness table, the model has moved past the point where lawmakers could treat it as a fringe experiment.