Managing Editor’s Memo

Taking Direct Aim At Direct Contracting

Frank Diamond

We take on direct contracting in its many manifestations and permutations. Employers, especially large employers, grow impatient with how the health care game’s been played­—that is, contracting with a health insurer or PBM to deliver coverage. Companies are not thrilled with quality or cost, especially of medications.

Direct contracting seems likely to be part of whatever Amazon, JPMorgan Chase, and Berkshire Hathaway are cooking up in their health care skunkworks. So far, few details have come forth since last year’s splashy announcement.

Meanwhile, direct contracting moves on other fronts. For instance, Walmart is using direct contracting via a partnership with Emory University Hospital (page 17), the Service Employees International Union Local 32BJ has made Mount Sinai Health System its center of excellence (page 25), big employers are finding on-site or near-site clinics to be cost effective (page 28), and health insurer mergers with PBMs may or may not bring more transparency to drug prices (page 29).

We also talk to Jennifer Graff of the National Pharmaceutical Council about when real-world evidence will actually be fully utilized in the real world (page 11). Hint: It won’t be soon. And just how much misdiagnosis costs the health care system (page 32). Hint: A lot.

In the back there’s a book review by Peter Boland (page 40) of our Editorial Advisory Board. Peter takes a look at Reverse Innovations in Health Care and its argument that U.S. hospitals could learn a lot from the cost-effective way hospitals in India deliver care.

And Viewpoints: Erik Johnson of Optum wonders just what we talk about when we talk about value-based care (page 37), while Russel Kaufman, MD, of Kentmere Healthcare Consulting Corp. warns about the dangers of genetic testing going overboard (page 39).

This ought to keep you off the streets for a month.


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