Doctor and business man holding up medication concepts Direct contracting is a strategy in which self-funded businesses partner directly with integrated health systems for health plan services that have a visible impact on cost, quality and employee satisfaction. (Photo: Shutterstock)

Self-insured employers are in a constant battle to reduce health care costs, improve quality of care and help plan participants make informed decisions. In recent years, high deductible health plans have been a logical choice for employers seeking relief from rapid cost increases. But as businesses see the disadvantages of HDHPs play out in real time, many are searching for other solutions. Direct contracting is an effective alternative.

While HDHPs may succeed in reducing health care claims, that success may be fleeting, as it often comes at a medium- and long-term costs. Employees or dependents often try to avoid high out-of-pocket costs by delaying or declining necessary care, which reduces immediate spending but leads to higher health care costs later when delayed care leads to worsened conditions that become more expensive to treat. Also, HDHPs offer no incentives for health providers to improve care coordination or quality, or for employees to maintain their health through regular check-ups and management of chronic conditions. In general, employee satisfaction with high-deductible plans is lower than with other health plans.

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