In an effort to combat rising healthcare costs and to address health issues faced by their employees, a growing number of employers are contracting directly with physicians to provide care for their companies. Direct care practices typically provide healthcare to individual patients, contracting with them for a monthly membership fee. The expansion of direct care as an employer healthcare plan is also gaining steam with many organizations.
The direct to employer care model has been shown to benefit the provider as well as the employer. Providers build their practice by contracting directly with employers and those employers are able to offer their employees healthcare coverage that is effective and typically less expensive.
A recent article in Healthcare Dive outlines three common types of direct relationships between employers and providers:
- Accountable care organizations (ACOs) for an entire employee population
- A bundled payment, carve-out or Centers of Excellence (COE) for a defined condition
- An advocacy role, such as meeting with hospital leaders to advocate for quality initiatives or payment reforms
The 2017 22nd Annual Willis Towers Watson Best Practices in Health Care Employer Survey found that 22% of employers anticipated directly contracting with providers to secure improved pricing of medical services by 2019. That number is a significant increase from the current 6% of employers who contract directly with healthcare providers for their employees’ care.
Large organizations such as WalMart are among those who have chosen to move toward the direct to employer care model. WalMart is the biggest private US employer. The company offers a COE network focused on reducing unnecessary spinal surgeries for its employees through a value-based payment program, incentivizing specialist to provide quality treatment through bundled payments.
The Willis Towers Watson survey found that employers recognize the employee experience with health and well-being is becoming increasingly important. Providing innovative, quality healthcare options to employees is a key strategy for employee recruitment and retention as well as for reducing costs for the employer.