For self-funded employers, healthcare is one of the largest expenses on the balance sheet. But even with that level of spending, it can still be difficult to understand what you are paying for, how provider rates are determined, and whether your network is actually built around the needs of your employees.
That is where a direct-to-employer network platform can change the conversation.
A direct-to-employer network platform is technology that helps self-funded employers build and manage customized provider networks, establish more direct relationships with healthcare providers, and gain greater visibility into healthcare costs and network decisions.
Instead of simply choosing from a traditional, pre-built provider network, employers can take a more active role in how their network is designed, which providers participate, and how those relationships are structured.
In simple terms, it gives employers more control over how they purchase healthcare.
What Is a Self-Funded Employer?
A self-funded employer is a company that pays its employees' healthcare claims directly rather than paying an insurance company to take on that financial responsibility.
With a traditional fully insured health plan, the employer pays a set premium to an insurance carrier, and the carrier is responsible for paying covered medical claims. With a self-funded plan, the employer uses its own funds to pay those claims, typically working with a third-party administrator (TPA) to handle functions such as claims processing, eligibility, and plan administration.
Many self-funded employers also purchase stop-loss insurance to help protect the organization from unusually large claims or higher-than-expected healthcare costs.
One of the biggest differences is control.
Self-funding gives employers more flexibility in how their health plan is structured, which provider networks they use, and how they approach healthcare spending. That flexibility can also create opportunities for customized provider networks, direct provider relationships, and greater visibility into where healthcare dollars are going.
And that is where a direct-to-employer network strategy starts to become particularly relevant.
What Does Direct-to-Employer Actually Mean?
Direct-to-employer healthcare creates a more direct relationship between the organizations paying for healthcare and the providers delivering it.
Traditionally, a self-funded employer may access providers through a network offered by a national or regional carrier. The employer funds the claims, but often has limited control over how that network was built or how provider contracts were negotiated.
A direct-to-employer approach gives employers another option.
Employers can work more directly with providers and health systems to build a network around factors that actually matter to their organization, such as:
- Where employees live
- Which providers they use
- Provider access
- Cost and reimbursement
- Quality and performance
- Geographic coverage
A network platform provides the technology and infrastructure to make those relationships easier to build and manage.
How Is This Different From a Traditional PPO Network?
The biggest difference is choice and control.
With a traditional PPO, employers typically choose from networks that have already been assembled.
A direct-to-employer platform changes the starting point.
Instead of asking, “Which network should we choose?”
Employers can ask, “What should our network look like?”
That is an important shift.
The goal is not necessarily to build the smallest network or find the lowest possible provider rate. It is to build a network that makes sense for the employer, its employees, and its overall benefits strategy.
Transparency Is Only Valuable If You Can Use It
Healthcare pricing information is becoming more accessible, in part because of federal transparency requirements.
That is progress. But access to more data does not automatically lead to better healthcare purchasing.
Employers still need to be able to understand that information and act on it.
For example:
What are we actually paying for care?
How do rates compare between providers and facilities?
Where is our healthcare spending concentrated?
Are there opportunities to build better provider relationships?
A direct-to-employer network platform can help turn that information into something employers can actually use when making network decisions.
That is where transparency becomes valuable.
Does This Mean Replacing Your TPA or Other Benefits Partners?
Not necessarily.
A direct-to-employer network is one part of a larger benefits ecosystem.
Employers may still work with TPAs, stop-loss carriers, pharmacy benefit managers, benefits consultants, and other partners.
The difference is that the employer can have more flexibility around the provider network itself.
It is not about removing partners just to remove them.
It is about giving employers more control over which partners they use, what those partners do, and where they provide value.
Why Are Self-Funded Employers Looking at This?
Self-funded employers already take on more responsibility for how healthcare is financed. It makes sense that many are also looking for more control over how that healthcare is purchased.
A direct-to-employer strategy can provide:
- Greater visibility into provider costs
- More flexibility in network design
- Direct relationships with providers
- Networks built around specific employee populations and markets
- More control over healthcare purchasing decisions
None of this means direct contracting automatically lowers healthcare costs.
The network still has to work. Employees need access to care. Provider relationships have to be sustainable. Claims and eligibility have to function correctly.
But employers can have a much clearer understanding of what they are purchasing and why.
Where Open Networks Fits
Open Networks is a technology platform that connects purchasers and providers of healthcare services.
For self-funded employers, that means having the infrastructure to build customized provider networks, establish direct provider relationships, and gain greater visibility into how the network is structured.
Open Networks is not a health plan or TPA.
We provide the technology and network infrastructure that allows employers, providers, and their existing benefits partners to work together in a more flexible environment.
The idea is simple:
Give employers more visibility. Give them more flexibility. And give them more control over one of their largest expenses.
A Better Question to Ask
For years, employers have been asked to choose between the networks available to them.
Direct-to-employer healthcare creates another option.
Instead of only asking:
“Which network should we buy?”
Benefits leaders can start asking:
“If we could build a network around our organization and our employees, what would it look like?”
That is the opportunity direct-to-employer network platforms are creating.
Interested in what a more flexible provider network could look like for your organization?
Learn more about Open Networks and how we help self-funded employers build networks around their needs.