https://mailchi.mp/b7baaa789e52/the-weekly-gist-september-29-2023?e=d1e747d2d8

On Tuesday, San Francisco, CA-based healthcare navigation company Transcarent announced ten health systems that will form the initial network for its new direct contracting offering for self-insured employers. The participating health systems include prominent systems like Advocate Health, Intermountain Healthcare, Baylor Scott & White Health, and Mass General Brigham, among others.

Transcarent plans to supplement these care delivery networks with virtual care offerings and digital wraparound services, supported by its recent acquisition of virtual care provider 98point6’s physician portfolio. Transcarent CEO Glen Tullman, who launched the company after selling Livongo to Teladoc in 2020, says the new network’s direct contracting package will guarantee same-day payments to providers and also include value-based incentives. 

The Gist: Transcarent was founded with the stated goal of lowering healthcare costs for employers, so it’s notable that the company is launching this direct contracting network with a group of big-name systems that aren’t all known for being value-oriented or low-cost. 

But these highly sought-after systems may end up forming an appealing “string of pearls” that attracts large employers and consumers to the product. More employers may be enticed to take a look at Transcarent’s direct contracting model, given employer healthcare costs are projected to rise another 7 percent in 2024, after a similar hike in 2023, and competition for talent has begun to soften

—but the ability of the product to deliver value will depend on the incentives and structure of the offering, about which public details are scarce.