32BJ Health Fund and Northwell Direct announce direct health care contract
The 32BJ Health Fund and Northwell Direct have entered into a direct health care contract, described as the largest of its kind. The agreement will provide approximately 200,000 union members and their families with access to Northwell Health's network of hospitals, outpatient facilities, and physicians, aiming to reduce costs and improve care coordination.
Background
- Northwell Health is New York's largest private health system, with 21 hospitals and over 900 outpatient facilities. Northwell Direct is its arm that negotiates direct, employer-paid health care contracts, bypassing traditional insurance middlemen.
- 32BJ SEIU is one of the country's largest property-services unions, representing over 175,000 janitors, doormen, security officers, and similar workers, mostly in the Northeast and Mid-Atlantic. Its Health Fund administers union-member health benefits.
- This deal is the largest "direct health care contract" of its kind in the U.S.: the 32BJ Health Fund will pay Northwell Direct directly for member care, rather than reimbursing through a traditional insurer network. That cuts out insurance company administrative costs and gives the health system a guaranteed patient volume, in exchange for negotiated lower rates.
- Direct contracting has grown in recent years as large employers and unions seek to control rising health costs, but such a large-scale arrangement between a major health system and a major union is highly unusual.