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Eligible employers can secure healthcare services directly from a facility, group of physicians, or an integrated healthcare system through direct contracting (D2E). By self-funding benefits, the employer’s insurance program can cover costs for any employees within the organization. Employer-funded benefits allow employees to obtain healthcare services from partner healthcare systems affiliated with their company.

Employers & Direct Contracting

Direct contracting helps employers obtain more efficient and affordable health benefits while improving the quality of care for their employees. Direct contracting can alleviate some of the challenges of working with traditional partners, such as health plans or TPAs. Employers who establish their own independent Qualified Health Plan (QHP) can create efficiencies by coordinating all their healthcare services directly through clinically integrated Physician-Hospital Organizations (PHOs).

Direct contracting also allows employers the flexibility to design a customized benefit model that meets the needs of their employees and the organization, while giving them control over pricing and the quality of care that their employees receive.

Qualified Health Plans (QHPs)

A Qualified Health Plan (QHP) is an insurance plan that allows employers to provide essential health benefits directly to employees, including dental. Nurse practitioners and physician assistants are not members of QHPs but participate via attending physicians and practices.

Applying for a Qualified Health Plan (QHP)

QHPs are part of the Affordable Care Act (ACA) and are certified by the Health Insurance Marketplace. Companies must meet several standards, including limits on cost-sharing and other requirements outlined in the application, in order to apply for a QHP.

Clinically Integrated Physician-Hospital Organization (PHO)

A Physician-Hospital Organization (PHO) is a joint venture between authorized healthcare providers and organizations with QHPs.

Benefits of a Physician-Hospital Organization (PHO)

Historically, the Federal Trade Commission (FTC) did not allow independent healthcare providers to negotiate with health plans through a PHO or other organizations such as the Independent Physician Associations (IPA). The FTC has amended this to improve quality care by allowing providers to negotiate with organizations with whom they are clinically integrated.

Clinically integrated PHOs provide systems and processes that improve quality of care and reduce costs through evidence-based medicine, performance measurement, information sharing, and incentive alignment.

There are 475 providers engaged in PHOs, including three Southern Illinois Healthcare facilities. The participating SIH locations include:

There are 70 Clinics and Medical Practices in 18 counties that participate in PHOs, including:

Healthcare providers offering tertiary & quaternary care through PHOs:

Additional Services & Resources:

  • Lockton Benefit Consulting
  • Lockton Reinsurance
  • Benefit Plan Design Assistance
  • Benefit Administration Assistance
  • Pharmacy Plan Design
  • Driving Domestic Utilization through Plan Design
  • Network development
  • Wellness Programs/Health Coaching
  • Collaborative Care Model/Population Health Management
  • Workers’ Compensation Management
  • Pre-employment physicals, drug screens, etc.
  • Telehealth

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