Here are six things to know:
1. Several major companies have entered direct contracting agreements with health systems as a way to gain more control over employee health benefit design and to realize savings.
2. Instead of looking to health insurers to help control the rising cost of employee health benefits, Cisco Systems, an IT and networking company, directly contracted with Palo Alto, Calif.-based Stanford Health, according to Reuters.
3. Stanford Health physicians track about 12 health indicators for employees covered by the plan, with the aim of improving health outcomes for Cisco employees and driving down costs for the company. If they meet these goals, Stanford gets a bonus payment from Cisco. If they fail, Stanford pays Cisco a penalty.
4. Cisco told Reuters costs for the Stanford plan are 10 percent lower than conventional coverage, which is still used by most of the company’s employees.
5. Technology company Intel offers a similar plan called Connected Care. The company told Reuters it is saving 17 percent on healthcare costs for the 38,000 employees enrolled in the plan.
6. Although the movement toward direct contracting between health systems and employers is small, a few other large companies, including Boeing and Walmart, have also entered direct contracts with provider organizations, according to the report.
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