Making direct-to-provider contracting work

Are recent announcements of direct-to-provider contracting arrangements a bellwether of the direction that value-based care will take in the United States? Direct-to-provider contracting is a strategy in which a self-insured entity negotiates a contract directly with a provider of healthcare services rather than through a third-party administrator (TPA), often with the goal of driving value-based care. As part of a value-based contract, the provider is held accountable for improving patient outcomes through achieving key quality, cost, and utilization metrics on a wide range of services. This provides the “value” in value-based care for the self-insured entity.

The interest that providers and employers have expressed for direct-to-provider solutions is complicated by the numerous ways these arrangements can be structured. The key challenge is implementing a model that is acceptable to both the employer and the provider. In this article, Milliman’s Andrew Timcheck, Cory Gusland, and Mike Gaal discuss what each stakeholder wants in a direct-to-provider arrangement and how they can make it work.