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More innovative employers are realizing that directly contracting with health systems can reap long-term rewards for high quality, value-based care. Better yet, forging these relationships is not as daunting as you may think.

In fact, in 2019, 11% of employers reported having some form of direct-to-provider arrangement, and 22% said they were planning to offer some form of it by the end of 2020.

Advancements in data management, technology, and scalability – along with new companies and models in the marketplace – are ushering in fresh options for employers to adopt a range of direct contract models that were not possible even a decade ago.

Even wary benefits managers, regardless of geographic challenges or company size, are finding they can engage directly with providers for long-term solutions that elevate quality, reduce waste, and help make costs more predictable. Whether it's a minor enhancement to an existing plan or an entirely new approach, it's possible to integrate a direct contract over time to minimize the impact of change on associates, so it feels "frictionless" to them.

The COVID pandemic has created an even greater urgency to maximize healthcare benefits. Employers see firsthand that a healthy employee population is a critical business issue and that access to patient-centered, high-value healthcare is fundamental to their operations. And now, more than ever, associates want to know that their employer has the health tools and data to advocate for them.

Employers and providers align through quality

Employers are ready for change. In a recent survey of roughly 400 companies representing 7.1 million employees, 73% of respondents confirmed that their organization intends to adopt a value-based healthcare model in the next three years.

Generally, employers have relied on healthcare products from intermediaries that aren't necessarily incentivized to meet their associates' needs, even as costs keep rising. Savvy employers are trying to flip the script by re-focusing on outcomes. That includes more or less service utilization as needed while eliminating wasted administrative and benefits costs that don't result in their most important goal: quality care and improved outcomes for associates.

Employers (and their associates) are sharing a heavy burden of U.S. healthcare costs. Employer-sponsored health insurance plans cover about half of the U.S. total population, so employers want to help ensure that their employees have access to the best quality and value in care.

In a recent survey of roughly 400 companies representing 7.1 million employees, 73% of respondents confirmed that their organization intends to adopt a value-based healthcare model in the next three years.

At the same time, health systems have a vested interest in providing the highest quality care to remain thriving and competitive. When providers combine guideline-driven, patient-appropriate care models with employer insights, they can achieve improved clinical and financial outcomes.

When their shared focus centers on quality care, providers and employers are naturally aligned to work together.

New trends and changing technologies open doors

Health systems and providers have made enormous investments in their electronic health records (EHRs) technologies and clinical decision support (CDS) infrastructure, allowing for greater data engagement while ensuring individual associate privacy. These advancements enable a direct-to-employer market not previously available.

Employers have the population, their plan's insights, and the motivation to explore innovative product solutions with providers directly. Because plan insights are retrospective data sets, they create a lag in assisting an employer for prospective planning. In a direct contract relationship between a health system and an employer-sponsored plan, clinical and claims data can intersect to become powerful tools.

This data can support early diagnosis, test results, and outcomes, for example, to help associates navigate their care and manage their expenses. By combining employer-purchased care extensions with this data, clinicians can offer more effective advice and guidance to patients. Greater data collaboration and transparency – while protecting privacy – help everyone involved gain more control over the patient's care management, navigation, and spending.

Putting data into practice

Consider the real-world example of a current direct contract pilot between a major health system and a Fortune 100 employer focusing on maternity care. The employer's associates are being seen by clinicians who have the tools to deliver real-time, guideline-driven care based on national best practice standards. For a woman receiving maternal care, this might mean she receives a glucose test at the right time during her pregnancy, kidney function studies if she has high blood pressure, or further coagulability testing if she has a history of blood clots.

By using these care standards, clinicians can more effectively address the root causes of pregnancy complications that can lead to poor outcomes, high cesarean section rates, and neonatal intensive care stays. In the past, employers often relied on traditional claims review using data from clinical activities that already occurred to develop ancillary programs to help support associates. Time lags between identification that a test is needed, test administration, and test reporting were contributing to unnecessary care gaps.

Companies exist that can help employers across multiple geographic areas, with one clinical strategy that aligns with multiple health systems.

Health systems have been using guidelines and doing clinical transformation projects for many years to help ensure patients receive the right care at the right time, but it's been hard to scale across multiple providers, systems, and states. Using best practice guidelines as clinical decision support via the EHR makes it easier for clinicians to do the right thing every time.

Direct contract questions to ask employer benefit companies

One of the first questions many employers ask about direct contracting is how to address their geographical challenges. Employer plans may cover associates across multiple locations, while providers are often regionally concentrated.

Companies exist that can help employers across multiple geographic areas, with one clinical strategy that aligns with multiple health systems. Ask employer benefits solution providers about their relationships with health networks and how they can leverage them to supplement and support what happens in clinical settings.

Some smaller to medium-sized companies think they're not big enough or that direct contract models would be too complex to manage, but experienced partners can assist with all aspects of the benefit execution strategy.

Ask potential solution providers about their range of products across the employer benefits ecosystem. Ideally, a partner can help you maximize the effectiveness of your existing healthcare relationships or seamlessly introduce new product solutions and partners to help elevate your plan to higher levels of clinical quality and cost control.

A shared vision for high-value care

Partnering directly with health systems enables data and technology collaboration to improve outcomes and utilization while helping to cut out waste and lower administrative costs. This helps employers focus on their most important goal: offering associates the right amount of high-value care at the right time for a better quality of life and greater productivity on the job.