Ep #363: Direct Contracting - Doing It Right! - With T.J. Morrison

This week’s episode features a conversation with T.J. Morrison, President at Benefit Design Specialists. Direct contracting offers competitively priced bundles to patients and quick payments to providers. They carve out a niche away from networks while, at the same time, avoiding direct competition with them. Direct contracting uses data-based baseline pricing to set the most competitive rates for otherwise cost-inflated procedures.

What You’ll Learn From This Episode:

• 01:51 What is direct contracting and what are its main benefits?
• 08:55 Lowest cost healthcare provides the best quality
• 10:26 Broker interest in direct contracting is driven by partially and self-funded plans
• 14:30 Creating a database to set baseline rates
• 18:22 Looking at metrics on the patient side

Quotes:

03:25 “Many times these providers, through health plans, are waiting a month to three months to get paid for services where the typical direct contracting contracts, they’re looking for seven to ten business day turnaround.”

04:31 “Direct contracting attacking a niche that a network can’t, but at the same time we’re not trying to be in competition with any type of network.”

08:55 “The highest quality providers are the lowest price because they know their metrics. They do so many knees, hips, spinal fusions, colonoscopies, what have you that they know how long that surgeon should be in the room.”

13:49 “Good direct contracting model, you’re looking for that 30 to 80 percent savings on any given procedure, but ultimately you’re really pulling on that regional healthcare approach and a new line of revenue for the centers. That’s what gets them to act.”

17:11 “In doing all that work behind the scenes, what that helped create from a direct contracting standpoint is now we have a baseline on where we want our procedures and we know where we’re creating that value.”