Direct contracting: a Minnesota case study

During 1996, HealthEast Care, Inc., a healthcare provider-owned and governed direct-contracting company, successfully responded to a request for proposal from the metropolitan Minneapolis-St. Paul-based Buyers Health Care Action Group (BHCAG), a coalition of self-insured employers, to provide healthcare services to members of BHCAG's Choice Plus health plan. HealthEast Care developed a care system proposal for BHCAG that balanced consumer and purchaser expectations with historical healthcare costs. Providers are reimbursed for contracted healthcare services according to a unique fee-for-service, budget-based payment model. BHCAG chose to contract with HealthEast Care and 23 other care systems in the metropolitan Minneapolis-St. Paul area and other parts of Minnesota to serve more than 117,500 Choice Plus enrollees.