Direct provider contracts in healthcare can benefit both providers and patients, and can also help employers control costs and improve access to care:
- Improved patient experience: Direct contracting can lead to a more positive care environment, where providers focus on wellness and patients have stronger relationships with their providers.
- Lower costs: Direct contracting can lead to lower, more consistent costs without compromising quality.
- Improved access to care: Direct contracting can lead to improved access to top-level care.
- Better price transparency: Direct contracting can lead to improved price transparency.
- Faster cash flow: Direct contracting can lead to faster cash flow for providers.
- Eliminates middleman processes: Direct contracting can eliminate complex “middleman” processes.
- Aligned incentives: Direct contracting can lead to aligned incentives for all parties.
- Improved patient outcomes: Direct contracting can lead to improved patient outcomes.
- Higher member satisfaction: Direct contracting can lead to higher member satisfaction.
- Differentiation: Direct contracting can help providers differentiate themselves in a competitive market.
- Steppingstone to larger-scale arrangements: Direct contracting can be a steppingstone to larger-scale value-based arrangements.
Direct-contracting arrangements embody the belief that “health care is local” and can serve to build valuable bonds between healthcare providers and local employers and their patients. It’s important to be aware that direct contracting is complex and requires navigating and coordinating relationships between the employer, the provider, and the third-party administrator (TPA) to facilitate claims payments and audits. In addition, network adequacy and capacity must be carefully assessed to ensure that employees have convenient, reasonably timely access to care. Employers and providers negotiating direct-contract arrangements will also need to ensure compliance with an array of legal issues.
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