Direct to employer healthcare, sometimes called direct contracting or DTE arrangements, has rich benefits for everyone involved — particularly the health system itself. To unlock these benefits, however, it’s important to understand what this relationship looks like, how it differs from other healthcare models, and what arrangements you need to make.
Here’s your guide to direct to employer healthcare.
What is Direct to Employer Healthcare?
In most traditional healthcare models, an employer works with a health insurance provider and is encouraged to stay within a preselected network for primary care, specialist visits, and more. A direct contracting arrangement essentially cuts out the traditional insurance carrier by allowing employers and health systems to work together directly.
In many cases, this model means the company — often a self-funded employer — works with a particular provider for certain kinds of care. It can result in many smaller contracting opportunities or a single partnership with a health system.
One of the key elements of DTE arrangements is the expectation of high-quality care and specific health outcomes. Without an insurance company in the middle, employers can more directly communicate their needs and expectations to a healthcare system, laying the groundwork for a more transparent and effective relationship.
Benefits of Direct to Employer Healthcare
A healthcare system stands to see numerous benefits from direct to employer arrangements. For example, the more straightforward relationship creates simplicity via communication, visibility, and transparency. Having fewer points of contact means your system can focus on delivering employee health outcomes that more directly relate to personalized needs. There are also plenty of financial advantages, such as the ability to focus on value-based care, which reduces everything from overtreatment to bottlenecks in the patient experience.
Perhaps most important, direct to employer healthcare helps you remain competitive in a fast-changing environment. As employers look for ways to cut costs and make employee health benefits more valuable, it’s critical to stay at the forefront of their minds — and to present your offerings as a simpler way to access primary care and specialists.
Of course, employer direct healthcare is a partnership, which means you benefit when other parties do. Here are just a few examples:
Employee Benefits
Employees — your patients — get the chance to work more directly with their providers through DTE arrangements. They may be able to better communicate their needs, which in turn enables you to create a personalized health plan and achieve more crucial outcomes. That doesn’t just improve overall well-being, but also employee satisfaction with (and potentially even utilization of) the health plan.
Employer Benefits
Small and large employers alike want to ensure their teams are healthy, content, and productive. By working directly with your healthcare system, these companies can control costs and optimize employee benefits. As a result, you’ll be better able to focus on excellent care because your partners will tell you what they need and what cost limitations they’re working with.
Overall, DTE arrangements are advantageous for health systems because they put you in control of the relationships that enable your work. You’re more directly responsible for what you do, why you do it, and how much it costs — which means you have more opportunities to deliver unmatched healthcare services.
Challenges and Hurdles in Direct to Employer Healthcare
While direct-to-employer (DTE) healthcare offers significant benefits, it’s not without its challenges. Understanding these hurdles is crucial for a successful implementation:
- Complexity of Negotiations: Establishing DTE arrangements requires navigating detailed contracts that clearly outline expectations, outcomes, and responsibilities for both employers and health systems. Without clear communication, misunderstandings can arise, leading to frustration for all parties.
- Balancing Cost and Care Quality: Employers are often looking for cost-effective solutions, but this focus can sometimes create tension with health systems striving to deliver high-quality care. Striking the right balance is essential for mutual success.
- Scalability Issues: As DTE arrangements grow in popularity, health systems may find it challenging to scale their operations to meet increased demand without compromising care quality or operational efficiency.
- Technological Integration: Implementing the right technology to manage these contracts and provide seamless communication can be a barrier, especially for systems that are new to direct contracting models.
By proactively addressing these challenges, health systems can foster stronger partnerships and position themselves as leaders in the evolving healthcare landscape.
The Direct to Employer Healthcare Partnership
Many of the benefits discussed above are only accessible through a truly strong partnership. But what does that partnership entail?
First, it’s important to understand the different contracting options available. For example, a third-party administrator (TPA) can help structure your offerings and present your network to the market.
Here’s what to look for when building a DTE partnership with a contractor:
Unique Provider Directories
Let your partner create and manage a directory of all the providers in your health system. You can include expected co-pays for each physician, which puts employers and employees in control of how they access your services.
Custom Lookup Opportunities
A contractor can organize a system with lookup tools for users, which means an employee can type in a specific condition, ailment, or provider and find exactly what they need within your network. This feature doesn’t just expand visibility and user-friendliness; it also helps guide health plan members to customized solutions and better health outcomes.
Flexible Technology Platforms
Technology platforms are key for good relationships, especially in DTE arrangements. Look for a contractor with flexible, intelligent platforms that encompass a large variety of services. From prioritizing preferred service providers to offering custom account options, this technology can help your health system see better results.
Once a strong partnership is established, it’s essential to focus on effective implementation strategies
Considerations for Successful Implementation
Launching a direct-to-employer healthcare model requires thoughtful planning and efficient execution. Focus on these five key areas to ensure success:
- Set Clear Expectations
Define responsibilities, performance metrics, and reporting requirements in contracts. Clear terms create accountability and reduce the risk of misunderstandings. -
Engage Stakeholders
Involve employers, employees, and internal teams early in the planning process. Their input ensures the program meets real needs and gains buy-in from all parties. -
Leverage Technology
Invest in platforms that offer real-time analytics, provider directories, and integration capabilities. These tools streamline operations and improve user experiences. -
Pilot and Refine
Start small with pilot programs to test your approach, refine processes, and address challenges before scaling to a broader audience. -
Communicate Benefits
Regularly highlight the advantages of DTE healthcare to employers and employees, such as cost savings, personalized care, and improved health outcomes. Clear communication drives adoption and satisfaction.
Start your direct to employer healthcare journey
As a health system, you have a responsibility to your providers and your patients. To foster this relationship, it’s increasingly important to look for new ways of offering your services — and with direct to employer healthcare arrangements, you can capture that opportunity.
Whether you want to learn more about DTE contracting or need a full-service partner, Brighton Health Plan Solutions is here to help. Find out what we can do for you.
