A new coalition called the Association for Direct Care launched last week, aiming to expand direct contracting and lower healthcare costs.
Direct contracting is an arrangement in which a healthcare buyer — like an employer — negotiates care delivery and pricing directly with healthcare providers, versus going through traditional insurance. The purchasers often have transparent pricing, and contracts typically involve incentives tied to quality and outcomes. Examples of direct contracting include direct primary care and centers of excellence.
The Association for Direct Care seeks to advocate for policies that make it easier to contract directly with providers, as well as increase transparency and support innovative payment arrangements for direct contracting. The coalition’s members include employers, healthcare clinicians and health tech companies.
“Americans and the job creators who provide health benefits to millions of workers are sick and tired of watching health care premiums rise year after year,” said Taylor Hittle, executive director of the Association for Direct Care. “Direct contracting offers a better way to purchase health care by lowering costs, cutting administrative waste, and bringing greater transparency to the system. The time is right for employers, clinicians, and health care innovators to lead the way. We look forward to working with Congress and the administration to remove barriers to direct contracting and make health care more affordable.”
The organization has six main policy priorities, according to its website:
- Create a federal framework for direct contracting between employers and healthcare providers.
- Allow joint purchasing so employers can buy healthcare through one contract.
- Remove contract restrictions that prevent employers from steering patients toward higher-value care.
- Give employers access to healthcare data, including claims, pricing and audit information.
- Make it easier to operate direct-contracting arrangements across multiple states by clarifying federal and state requirements.
- Support implementation of direct contracting through grants and Department of Labor assistance, particularly for smaller providers and administrators.
Employers are becoming more and more interested in direct contracting as a way to reduce healthcare costs. A recent Business Group on Health survey found that employer healthcare costs are projected to rise 9.2% in 2027.
“Employers continue to look for innovative ways to deliver high-quality, affordable healthcare to their employees and families, and direct contracting is an important tool to help get there,” said Jenny Goins, interim president and CEO of the National Alliance of Healthcare Purchaser Coalitions, in a statement. “Direct contracting gives employers greater flexibility to purchase care in ways that reduce costs, improve quality, and deliver better value for working families.”
Photo: Oleksandr Hruts, Getty Images
