Direct contracting between hospitals and employers is expected to grow in the future, according to a report from Fitch Ratings.
These arrangements will become more popular and accepted as employers seek to contain healthcare costs and healthcare providers continue to focus on population health management, according to the report. Fitch predicts providers with superior clinical outcomes and cost savings will benefit from direct contracting arrangements, although the short- and long-term financial implications aren't clear.
Providers will likely take on limited risk under first-generation contracts and gradually increase risk over time as they develop better risk management skills. "Fitch expects that it will take time for providers to develop best practices and to hone pricing methodologies to manage the associated risk," according to a news release.
Additionally, Fitch predicts community health systems that serve local employer-based populations will likely favor narrow network and shared savings contracts. Meanwhile, providers with national market recognition and high-quality outcomes in specific service lines will likely turn to bundled payments.
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