Direct Contracting is a healthcare payment model where healthcare providers or organizations contract directly with self-insured employers, patients, or other purchasers to provide healthcare services at pre-negotiated rates, bypassing traditional insurance companies.

Payment Structure and Benefits
This model typically involves fixed monthly or annual payments for a defined set of services, creating predictable costs for both providers and payers. It aims to reduce administrative overhead and improve healthcare value by eliminating third-party billing complexities and focusing on patient outcomes rather than service volume.

• Eliminates insurance company intermediaries
• Provides transparent, predictable pricing
• Reduces administrative costs
• Allows for more flexible care delivery models

Practical Impact and Implementation
Organizations implementing direct contracting often see significant cost savings and improved care quality. For example, a manufacturing company might contract directly with a local hospital network to provide all employee healthcare services at set rates, leading to:

• 20-30% reduction in healthcare costs
• Faster access to care for employees
• Better preventive care utilization
• Improved chronic disease management
• Enhanced employer-provider communication