New year, new health insurance model: It's time to take control

For many years, insurance companies have served as intermediaries between health systems and employers purchasing health plans for their teams. But the insurers have only one priority, and it isn’t improved health outcomes. It is profits. Patients, employers and health systems have been getting more and more frustrated with the situation. One of the solutions that have emerged and is becoming popular today is direct-to-employer plans.

Direct-to-employer plans bypass the insurance company, allowing self-insured companies to contract directly with a provider. These plans give employers more control over their spending as well as more flexibility when it comes to the plan itself. At the same time, this system allows health systems to maximize their profits and provide a higher level of care to their patients.

While we are still at the beginning of 2024, it is the time for businesses and health systems to make their decisions and to switch their approach to providing and receiving health care services, opting for more control and better care.

Past, present and a glimpse into the future

The current U.S. health care system is experiencing a lot of issues. It is continually failing patients and contributing to lower levels of care while insurance prices keep increasing. Patients, as well as their employers who pay for coverage, are growing increasingly impatient and frustrated. It is not surprising. The structure we have now fails to do the very things it was created for – treating patients.

The model, where insurance companies receive significant chunks of revenues with no progress on the health care front, makes companies all over the country dissatisfied. Throwing money into the health insurance abyss doesn’t make sense anymore.

At the same time, health systems are missing out on revenues that could be reinvested into medical staff, their education, equipment and new treatment protocols. All of which would lead to better patient health outcomes, which is the ultimate goal.

All of these frustrations explain why direct plans have been gaining traction in the U.S. For instance, direct contracting adoption rates have increased over 266% in the past two years. Looking for ways to lower their costs and have more control over their health care spending, businesses turn to direct-to-employer plans.

Direct contracting provides numerous benefits for everyone involved. Health systems are the ones that can reap the most benefits. This model allows more transparency and simplicity when it comes to communication with employers and patients and provides more control over finances. And more revenue for health care providers means higher budgets for equipment, new specialists, or research, all of which are in the best interest of the people receiving care from these organizations.

We like to think of direct-to-employer health care as a partnership, and in partnerships, each party gains something valuable. Direct contracting offers benefits to all: health systems, employers and patients.

Patients can expect improved health outcomes, which lead to increased satisfaction with their health plan. Higher satisfaction with the health plan translates into more robust relationships with their employers and more revenues for the health systems. On top of that, employers also get to optimize the cost of employee benefits.

Related: A blueprint for selecting employee benefits partners

So, how does a company get into direct contracting? There are several ways; and one is using a Third-Party Administrator (TPA). With or without insurance companies, health care is incredibly complex to navigate. TPAs are entities that offer operational and administrative support. These include processing claims and managing employee benefits management. TPAs take the administrative burden off the health systems’ shoulders and allow all the parties to maximize the benefits of their direct contracting partnership. They can also help create a customized plan based on the needs of a company’s team. Ultimately, TPAs help increase the efficiency of the employer-health system relationship.

The end goal

While cutting costs and increasing revenues are benefits, the ultimate goal of any health care system is improved patient outcomes and people’s lives. It seems that the traditional model has forgotten about it, which may be the root of many of its problems. So, what can we do to remedy this?

Improved health outcomes come from establishing a clear, more transparent system of communication between patients and doctors. They come from service providers getting to know their patients and their needs, tracking their histories and individual conditions. Improved health outcomes also come from a health system’s ability to innovate, implement new protocols and use new technology. All of these are possible with direct-to-employer contracting. This model allows the elimination of costly and often inefficient intermediaries between those buying health care plans and those providing the services, freeing up resources to do the important work.

First and foremost, health systems have a responsibility to their patients. To keep delivering outstanding results, it’s essential to look for ways to improve services. Direct-to-employer health care arrangements do precisely that.

Tom Malczewski, Vice President of Sales at Brighton Health Plan Solutions