What a broker should know before recommending direct contracting

Direct contracting is being sold hard, which is exactly when a broker should slow down. The model is sound and it is not universal, and the difference between those two statements is where your value sits.

Knowing which clients it suits — and being willing to say when it does not — is worth more to the relationship than knowing the pitch. Clients remember who told them not to buy something.

Clients it suits

The model works best where a meaningful share of spend is schedulable, where the employee population is concentrated enough that a contracted provider is genuinely reachable, and where the employer feels the cost directly — which usually means self-funded or level-funded.

It also suits employers who have already tried a narrow network or a reference-based arrangement and run into the member friction those produce. Those clients have already accepted that something has to change and have direct experience of what they do not want, which makes the conversation shorter and more honest.

A final marker: employers with an identifiable concentration of elective procedures. If the claims history has a recognisable shape, there is something specific to contract for.

Clients it does not

A highly dispersed workforce with a handful of employees in each of twenty states is hard to serve with contracted providers, and promising otherwise will cost you the account when members cannot find anyone nearby.

An employer whose spend is dominated by chronic and unscheduled care has less to shop, and the saving will not appear where they were told to look for it. A fully insured employer with no appetite to change funding will not see the saving reach them at all, because it accrues to the carrier.

Saying all of this plainly is what makes the recommendation credible on the clients where it does fit.

  • Good fit: concentrated population, self-funded, meaningful elective spend
  • Good fit: clients who abandoned RBP or a narrow network over member friction
  • Poor fit: highly dispersed staff with no provider density anywhere
  • Poor fit: utilisation dominated by chronic and unscheduled care
  • Poor fit: fully insured with no plan to change the funding arrangement

Questions worth asking the vendor

Ask what happens when a member goes outside the contracted set, because they will, and the answer tells you whether the model has been thought through or merely marketed.

Ask whether the published price is the complete price or a component, and get it in writing. Ask how the provider is paid and when, because provider retention depends on it and a network that erodes is worse than no network. Ask what administration the client still has to perform, and be suspicious of "none".

A vendor who answers those cleanly is describing a real operating model. A vendor who treats them as objections is describing a pitch, and you will be the one explaining the difference to your client in month seven.

How to present it without overpromising

The durable framing is narrow and specific: this set of procedures, at these prices, for this part of the population, with the rest of the plan unchanged. It is less exciting than a transformation story and it survives contact with the first plan year.

Model the saving on the client’s own claims history rather than on a vendor case study. The procedures that repeat in their data are the ones worth pricing, and the comparison is checkable by anyone.

Where Mishe sits

Mishe publishes the contracted price for defined services, handles booking and payment at the point of care, and pays the provider upfront. Prices are public, so you can check the specific procedures a client actually uses before recommending anything, and you can show the client the same page you looked at.

What this changes about your own position

A broker whose value rests on access to carrier relationships has less to differentiate on as prices become visible. A broker whose value rests on judgement has more, because the number of decisions a client faces has gone up rather than down.

The practical shift is from procuring a plan once a year to advising on where care should be routed continuously. That is a different rhythm of client contact, and it is one clients notice.

It also gives you something to show. A renewal conversation that includes specific procedures at specific prices, checked against the client’s own claims, is more persuasive than a market update — and it is verifiable, which matters more than persuasive when you are asking someone to change what they do.

Common questions

Does this replace the broker relationship?

No. Plan design, funding strategy, compliance, vendor selection and the client relationship all remain. What changes is how a subset of care is priced and paid for.

How do I show a client the saving before they commit?

Compare the published price for the procedures that dominate their claims history against what those claims actually cost. The prices are public, so the comparison needs no vendor involvement and no NDA.

What is the most common way this goes wrong?

Launching with a provider set too thin to be useful. Members try it once, find nobody nearby, and conclude the new option does not work — which makes the second attempt much harder than the first.

See it for yourself

Every price on Mishe is public. You can check what a procedure costs, and which providers offer it, without an account and without talking to anyone.