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Direct contracting with hospitals: alternative payment arrangements.

D G Cave

    Employee Benefits Journal
    |May 9, 1989
    PubMed
    Summary

    Large self-insured employers can benefit from direct contracting with hospitals. This approach offers advantages and involves specific negotiation strategies and impact analysis.

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    Area of Science:

    • Healthcare Management
    • Health Economics
    • Employer Health Benefits

    Background:

    • Self-insured employers face rising healthcare costs.
    • Traditional healthcare purchasing models present challenges.
    • Alternative payment arrangements are being explored.

    Purpose of the Study:

    • To outline the advantages of direct contracting with hospitals for self-insured employers.
    • To describe the process of negotiating per diem or per case contracts.
    • To discuss the effects of these direct contracting arrangements.

    Main Methods:

    • Review of direct contracting models in employer healthcare.
    • Analysis of negotiation strategies for hospital agreements.
    • Discussion of outcomes and impacts on employers.

    Main Results:

    • Direct contracting offers financial and operational benefits for large employers.
    • Negotiation requires understanding of hospital pricing and services.
    • Implementation impacts include cost savings and improved care coordination.

    Conclusions:

    • Direct contracting is a viable strategy for self-insured employers seeking cost control.
    • Successful negotiation is key to realizing the benefits of these arrangements.
    • Further research on long-term effects is warranted.

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