Beyond HMOs: trends in employer direct contracting

The California Public Employees' Retirement System (CalPERS) is exploring the possibility of contracting directly with providers to furnish healthcare services to its members. This move may signal a trend among employers to pursue direct-contracting opportunities. The direct-contracting experience of Minnesota's Buyers Health Care Action Group (BHCAG) high-lights how such arrangements may be structured. Direct contracting may not yet exist in every market. Nonetheless, providers that proactively position themselves to meet employer expectations should be able to strengthen their market position and gain leverage in contracting with managed care organizations.