Direct contracting: the future of managed care

Direct contracting is an agreement whereby healthcare providers directly contract with employers or health plan purchasing cooperatives to provide healthcare services to their employees or enrollees. While this type of arrangement requires a high degree of integration and cooperation between the delivery and financing of care, the flexibility it offers makes it a necessity in the new world of integrated healthcare financing and delivery systems. This article demonstrates the importance of strong vertical and horizontal links with both other providers and various components of the financing system. It also shows how those organizations with the capacity to finance and assume risk for employers will be most successful and play a major role in the healthcare system of the future.