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Direct purchase contracts carry risks, benefits.

A Fine

    Healthcare Financial Management : Journal of the Healthcare Financial Management Association
    |April 9, 1991
    PubMed
    Summary
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    Employers are pursuing direct managed care contracts to control healthcare spending. Providers must establish pricing, monitoring, and auditing processes for successful partnerships.

    Area of Science:

    • Healthcare Management
    • Health Economics

    Background:

    • Employers seek greater control over healthcare service purchasing.
    • Direct managed care contracts are emerging as a strategy for cost containment.

    Purpose of the Study:

    • To outline key considerations for healthcare providers entering direct purchase contracts with employers.
    • To emphasize the importance of strategic planning for mutual benefit.

    Main Methods:

    • Analysis of employer strategies in healthcare procurement.
    • Identification of essential provider-side preparations for direct contracting.

    Main Results:

    • Direct contracting requires providers to evaluate markets, develop pricing, and implement monitoring and auditing systems.

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  • Successful implementation hinges on robust internal controls and strategic planning.

    • Conclusions:

    • Direct purchase contracts can offer significant advantages to both healthcare providers and employers.
    • Thorough preparation, including market assessment and internal process development, is crucial for realizing the benefits of these agreements.