McAllen credits Frontier Health with lower medical claims but flags pharmacy surge; staff proposes premium changes

City staff told the McAllen City Commission at a workshop that the city’s direct primary care arrangement with Frontier Health has boosted primary-care access, reduced certain high-cost medical claims and produced large estimated savings, while pharmacy expenses have surged and driven a budget shortfall.

Frontier Health began serving city employees in October 2022, replacing a single preferred clinic model. Staff said Frontier’s direct-care model, combined with cash-based contracting with some specialists and an International Rx pharmacy program, produced higher primary-care utilization and improved outcomes for engaged members.

Staff reported that 60.6% of active members have used Frontier providers; primary-care visits rose about 66% compared with the pre-Frontier period. Staff said members who used Frontier tended to have more clinical conditions but showed substantially lower inpatient admissions and readmissions than members who had not engaged Frontier. “Our sickest population, the 60.6 percent that are going to Frontier, is…