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Direct Contracting – The collaborative approach to employee health coverage.

Direct Contracting - The collaborative approach to employee health coverage.
Healthcare spending is now growing at an average annual rate of 5.5%. With employers carrying the insurance burden for nearly half of the U.S. population, finding new ways to manage these escalating rates for health benefits has become essential in the C-suite. That’s why strategies like direct contracting are now getting serious consideration as a viable solution to controlling costs.

What is direct contracting?

Direct contracting is essentially when self-insured employers partner with healthcare organizations – like Together Health Network – who have the capability to package price provider networks and care programs that fit employer needs. These arrangements offer self-insured employers the opportunity to control both the type and costs of health benefits provided. Working directly with healthcare organizations, self–funded employers can design care packages tailored to meet the specific needs for their employee population.

What are the benefits of direct contracting?

By partnering with a healthcare organization directly, employers have more control to address areas of specific concern to their workforce as well as gain an ability to ensure that the healthcare organization is accountable to measurable quality and patient satisfaction performance. The employer and healthcare organization can negotiate direct reimbursement rates, cost trend guarantees and shared expense risk. These approaches will allow the employer to recognize lowered costs and manageable trends that help with overall financial performance and future forecasting. Through direct contracting and regular monitoring and reporting of performance, employers gain a level of transparency into costs and quality that is uncommon in typical third party administrator arrangements.

What’s next for direct contracting?

As the healthcare marketplace evolves from an old volume-driven fee-for-service model into value-based care, direct contracting arrangements offer a unique opportunity for employers to collaborate with healthcare organizations to hold down the cost of providing thoughtful, well-designed health benefits to their employees. Employers can proactively partner with healthcare organizations, like Together Health Network, to achieve affordability, quality and patient satisfaction goals that can ultimately improve health and wellness outcomes for all employees.

To find out if direct contracting is right for your organization, contact Mark Casmer at mcasmer@togetherhealthnetwork.org or Ryan ORoark at roroark@togetherhealthnetwork.org.