Digital Health Talks: Direct Contracting Explained On How Northwell Direct Cut Employer Costs 20%

Direct Contracting Explained: How Northwell Direct Cut Employer Costs 20% | Nick Stefanizzi, CEO, Northwell Direct Every health system that considers selling directly to employers hits the same wall. The discounted rate lands on patients you may already have, and nobody can prove the trade works. Nick Stefanizzi says it does. He is the CEO of Northwell Direct, Northwell Health's for-profit direct-to-employer company, where an employer or union agrees on price with the health system and no carrier sits in the middle. Since its first customer in 2022, Northwell Direct reports serving more than 300,000 employee members across more than 75 employers and unions, with a network that now spans more than 55 hospitals, over 125 urgent care centers and more than 5,000 behavioral health providers. In December, it signed the 170,000-member 32BJ Health Fund, the largest direct contract of its kind in the country, with the fund projecting 20% savings in year one. Stefanizzi told HFMA the business contributes more net-new volume and margin than it cannibalizes, and is profitable on its own P&L. Before Northwell Direct, he was chief administrative officer and interim CEO of Formativ Health, and spent eight years in operating roles across Northwell Health. • How Northwell measures cannibalization against net-new volume, and how to run that analysis before signing anyone • What a system should own outright versus rent, and what Stefanizzi says they deliberately chose not to build • Why stop-loss economics turned into an unexpected sales driver • Where technology actually produces the savings, since a lower rate alone does not lower total cost • Whether any of this counts if the contract itself stays private For CFOs, CIOs and the executives weighing whether to become a network operator instead of a network participant. Find all of our network podcasts on your favorite podcast platforms and be sure to subscribe and like us. Learn more at www.healthcarenowradio.com/listen/