Every company wants to save money on health insurance costs without sacrificing quality. That can feel like the impossible dream, but there is a way to increase quality and employee satisfaction while saving money and upping efficiency. And it’s trending: Direct-to-employer provider networks, in which companies directly negotiate contracts with providers of health care services without the need for an intermediary insurance company, are growing by leaps and bounds. In these networks, your ability to negotiate transparently and directly with providers benefits your bottom line as well as your employee benefits and experience, as providers are driven to improve patient health outcomes while keeping overall costs low.

What is direct-to-employer health care?

Direct-to-employer health care, also known as direct contracting or direct-to-employer contracting, is a model where employers directly engage with health care providers to deliver services to employees, bypassing traditional insurance companies, according to Medical Economics. This approach is especially appealing to self-insured employers, allowing them to negotiate terms directly with health care providers, leading to better pricing and customized health benefits tailored to workforce needs. Employers benefit from reduced health care costs and improved employee satisfaction, while employees enjoy better access to personalized primary care and potentially lower out-of-pocket expenses. Primary care physicians gain a steady patient stream and the opportunity to demonstrate cost-effective, high-quality, appropriate care.

Why you should consider direct-to-employer contracts

More than 1 in 10 large employers, like General Motors and Walmart, have signed up with direct-to-employer provider networks to provide value-based care to their employees, though companies of all sizes can benefit. Here’s a closer look at some reasons your company should consider making the switch, too:

Administrative cost savings

The traditional health insurer models mean your company has to decide how much of the health care costs to absorb, and how much will be passed on to employees. By contracting directly with a curated provider network (meaning providers are selectively screened and chosen for providing high-quality care at lower costs), you can reduce the high costs associated with employer health plans, as well as lower out-of-pocket costs for plan members.

“Direct-to-employer networks use numerous metrics like patient satisfaction surveys and physician recognitions to thoughtfully pick top physicians to participate in the curated provider network,” said Lisa A. Janis, assistant vice president, employee health plan at Northwell Direct. “This selectiveness in choosing providers allows the network to negotiate a heavily discounted rate that translates into cost savings for companies.” While the networks are selective, the fact that providers are carefully selected to meet employees where they are means they’re also robust.

Fewer headaches and hassles

Self-funded employers who contract directly with provider networks can avoid the extra layers that exist when you have the intermediary of the traditional insurance company. When you work directly with the provider network, you can be efficient and proactive in coordinating health care services for your employees, increasing their satisfaction and reducing hassles that come with a traditional plan. You interact directly with a team that is invested in keeping your employees healthy. “Companies can partner with the network provider to customize health care plans that address the specific needs of their workforce,” said Nick Stefanizzi, chief executive officer at Northwell Direct. The payoff can be great: Employees who receive coordinated health care services may be happier and healthier and have fewer missed workdays. “As an employer, you’ll come away knowing exactly what you’re getting for your money, and you don’t have to pay an outside administrator to do so,” said Janis.

Greater transparency

“As a valued-added partner, direct-to-employer providers believe it’s only right to share your company’s data with you,” said Mr. Stefanizzi, who notes that this type of transparency isn’t something companies get with traditional health insurers. “You can see data about your employees’ most-utilized services and work with the provider network to create programs that meet the unique needs of your employee population.” These customized preventive care management programs ensure better experiences for your workforce and enhanced savings for all.

To learn more about the benefits of a direct-to-provider network with Northwell Direct, contact us.

The Northwell Direct Network is provided by the Northwell Direct Administrative Services Organization, Inc. Wellness and clinical service offerings from Northwell Direct are provided by affiliated Northwell Health entities and their licensed providers. The Northwell Direct Network currently is available only to self-insured employers.