The Service Employees International Union Local 32BJ three years ago named Mount Sinai Health System as a preferred provider for participants and started a direct contract for those needing hip and knee replacement surgeries. In health care there are not many examples where each party succeeds. This is one of them.
The clinics range in size from a nurse who shows up in a mobile unit a few hours per week to a large-scale, full-service health clinic with multiple primary care providers and clinicians who can provide dental and vision care.
Unlike most payer–provider relationships, the parties took a go-slow approach. The plan was offered only to employees who worked in a subset of Walmart and Sam’s Club outlets and lived or worked near Emory providers, and Walmart did not set premium levels to incentivize workers to choose the Emory ACO.
In 1991, the world’s second richest man griped about health care costs. Today, Sam Walton’s Walmart empire is striking back with direct contracting. The retail giant is using centers-of-excellence contracts by which it pays high-value provider organizations to treat specific medical problems.
Taking Aim at Direct Contracting
Large employers grow impatient with the health care game. That is, contracting with a health insurer or PBM to deliver coverage. As a result, direct contracting moves on many fronts. For instance, Walmart is using direct contracting via a partnership with Emory University Hospital, the Service Employees International Union Local 32BJ has made Mount Sinai Health System its center of excellence, big employers are finding onsite or near-site clinics to be cost effective, and health insurer mergers with PBMs may or may not bring more transparency to drug prices.