For health systems, challenges lurk around every corner. They stem from a variety of factors, including the lingering effects of the COVID-19 pandemic, rising costs, a shortage in healthcare workers, falling reimbursement rates, and increasingly tough payers. With all these factors, how can health systems secure their future? Now, more than ever, it’s important for them to shift their thinking and consider unorthodox approaches. One bold approach that health systems are looking more closely at is to redefine the relationship between the real customer (the one that pays the bill!) and the provider, by creating a direct relationship with employers.
In the second session of Revive’s Summit Series, Nick Stefanizzi, CEO of Northwell Direct, shared his experience in launching a direct-to-employer offering for Northwell Health, one of the nation’s most prominent health systems. We developed three key takeaways from the session for those who are considering developing a program like this.
Earn buy-in on a long view
Northwell Direct is not an overnight success story. In fact, this is the health system’s third attempt at getting into the insurance space. Because of this, a big part of Nick’s job early on was to build alignment from stakeholders across the organization on a long-term strategy. He emphasizes that it’s important to ensure everyone understands that a direct-to-employer strategy is a long-term commitment that requires time and resources to blossom. Without those clear expectations at the outset, it can be difficult to see the effort through to fruition.
Be an added value for brokers
For Nick and Northwell Direct, relationships with health insurance brokers have been critical to reaching employers. That was the intention from the very start. When Nick began building his team, he knew it was important to build credibility with brokers, who are a trusted partner to employers in their health plan purchasing. So, he recruited team members with significant experience in benefits design and already-established broker relationships. Northwell Direct might be direct-to-employer, but it leans heavily on brokers as a major channel for reaching, educating, and ultimately partnering with employers. By leaning into brokers and making them a key part of its sales process, instead of trying to disintermediate them, Northwell Direct has been successful in building credibility and being considered as a viable option by the employers it’s trying to attract.
Start somewhere
There are so many reasons organizations may decide to avoid direct-to-employer models. “We have so many other priorities.” “It’s too risky.” “It might upset our payor partners.” “Our market isn’t right for this.” Nick has heard them all. While these concerns are valid, as the healthcare market continues to evolve, health systems must keep up with the changing landscape. As you’re evaluating options, you don’t have to develop a full program immediately. But it’s important to start. Find ways to build toward a comprehensive solution by building an offering at a time, or by piloting, rather than trying to be everything to everyone all at once.
Direct-to-employer strategies can prove highly beneficial for health systems by helping move them upstream and closer to the ultimate buyer of healthcare services.
Not only can it provide a valuable alternative payment model, but it can also shift the power dynamic between health systems and big insurance companies. Such a shift can only be good for health systems, who are coming under increasingly unsustainable reimbursement demands from insurers.
If you’re interested in direct-to-employer relationships at your health system and want to hear more about the efforts from Northwell Direct, reach out to Nick Stefanizzi, CEO of Northwell Direct, to get some sound advice: nstefanizzi@northwell.edu.
