Cut Health Plan Costs By Cutting Out the Managed Care Middleman
Cutting out the managed care middleman and contracting directly with medical providers may seem like a drastic solution for reducing health plan costs. Yet for employers who’ve been whipsawed by relentless cost increases, it may be the only solution that actually works. The profit-bloated managed care industry, with much to lose, has propagated many myths about why this sensible approach won’t work. But their solutions haven’t worked. Costs continue to surge and employers are desperately seeking relief. It’s time to debunk the myths about direct provider contracting and shed some light on this ingenious, innovative cost-containment strategy.
Myth 1: Employers cannot negotiate as good a deal with medical providers as can managed care companies. The truth is employers can often negotiate just as good a deal, or better. Providers welcome direct agreements for the very reason that they are not like conventional managed care contracts. Physicians have complained for years about adversarial agreements and poor reimbursements forced upon them by...
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