How the economic downturn has affected direct contracting with employers

The economic downturn from the COVID-19 pandemic is placing new strain on health systems' relationships with employers, especially amid unemployment challenges and insurance changes.

Melinda Hancock, chief administrative and financial officer at VCU Health System in Richmond, Va., and Jeanette Wojtalewicz, the senior vice president and CFO of CHI Health in Omaha, Neb., discussed this topic and more during Becker's CEO + CFO Virtual Event. Their Nov. 10 panel was titled, "How Does the Health System-Employer Dynamic Evolve During an Economic Downturn?"

Here is an excerpt from the conversation, lightly edited for clarity. To view the full session on demand, click here.

Question: Does the recent economic stress place any renewed attention on direct contracting relationships with employers in your area or elsewhere in the U.S.? 

Jeanette Wojtalewicz: We have entered into several direct-to-employer arrangements over the past 10 years, including full-risk arrangements, and learned a ton, some good and some not so good. To date, while we continue to have that be an option in our portfolio for employers, we're just trying to be available and be a resource now more than ever. We're actually going together with the insurance company and the broker as a team of three to the employer to explain options. How do we use virtual care in this new model? How do we develop primary care networks with no copays to help keep your people out of the ER? These are just some examples of the conversations we're having.

Melinda Hancock: Our market is not that mature yet in this space. We are just starting some of those conversations. The pandemic has sped some of that up, to be honest with you. More employers are wondering, how can you help us? And some of those reach-outs are turning into, well, how should we be working better together? Can you bring your expertise on-site? We've been trying to actively reach out from that perspective. While we're really far behind what Jeanette's talking about, I think we're going to see an acceleration to that in this market right now.

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