Home Care Heroes Blog

Employers Look to Direct Contract with Doctors, What about Home Care

I came across a post on the American Medical News web site.  Discussing the issue that more self-insured employers are considering direct contracting with healthcare providers.  The drive health benefits industry insiders say is the combination of upheaval in health care because of reform and continual increases in the cost of coverage.  Self-insured employers say they save the fees they pay plans to put together networks and handle claims and, in many cases, pass the savings along to “their” doctors. 


Roger Merrill, MD, chief medical officer at chicken processor Perdue Farms, has been contracting directly with physicians and hospitals for more than 10 years.  He now has approximately 15,000 provider contracts.  Dr. Merrill, an internist by training, said direct contracting has improved Perdue employees’ health, brought better pay to primary care physicians, and saved the company money, all without a health plan’s involvement.  Dr. Merrill goes on to say, “We at Perdue and provider have the same goal: maximize the health of the patient.  Typically, large insurance companies do not have that same goal.”


Though there is no official count of employers engaged in direct contracting, people in the industry say interest is growing.  Employers’ direct contracts vary in scale.  For some large employers, such as Lowe’s, the home improvement chain, direct contracting has created a niche side benefit for employees.  Some employers, like Toyota, are creating optional narrow or “high-performance” networks made up of physicians and hospitals with high clinical quality scores and low prices.  Other employers, like Perdue, are creating entire networks, including primary care, specialty care and hospital care for their employees, using a third-party administrator just to adjudicate and pay claims. 


Andrew Webber, president and CEO of the National Business Coalition on Health, said “It’s not the same as when we had the managed care wars in the mid-1980s.  Rather than a [network in which] you just signed up a lot of doctors with cheap prices, now we truly have better measurement systems so that we’re first looking at the quality of care.” 


Among the reasons Perdue chose direct contracting was the company’s belief that primary care physicians should not be at the bottom of what Dr. Merrill calls the medical network “food chain.”  Perdue pays primary care doctors well, he said, and that’s intentional.  “We want the doctors to smile when one of our employees come through the office,” Dr. Merrill said. 


We know the most cost effective delivery model is healthcare delivered in the home.  My question is have you approached companies in your area.  Even if they are not self-insured employers healthcare insiders say direct contracting structure is gaining acceptance, so a marketing initiative contacting companies should be a worthwhile exercise for those of you interested in new payment arrangements.  Even if company is not self-insured at this time, this exercise should set you up for being first on employer’s minds as they move to start direct contraction.  The use of a care coordination portal and other communications tools could and will bring huge value to the self-insured company.  

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