Direct Contracting in Employer-Sponsored Healthcare
Direct contracting in healthcare, particularly between employers and providers, has been a growing trend driven by the desire to manage rising healthcare costs and improve quality of care via a more direct and transparent relationship between plan sponsor and provider(s).
This approach allows a plan sponsor or employer to directly negotiate with healthcare providers, bypassing traditional insurance intermediaries like PPOs and HMOs. This model is particularly attractive to self-funded employers who bear the financial risk of their employees’ healthcare costs.