http://khn.org/news/boeing-contracts-directly-with-california-health-system-for-employee-benefits/?utm_campaign=KHN%3A+Topic-based&utm_source=hs_email&utm_medium=email&utm_content=31951328&_hsenc=p2ANqtz–1HG-Jyei7aqz_SWbkRKhJG3Jw-W5nU83bCCryWsDE_3IBpyXne8Y1g4rT4k4e1DlPo9TS25nZBfQF85pxcSd5aXiVuQ&_hsmi=31951328

In another sign of growing frustration with rising health costs, aerospace giant Boeing Co. has agreed to contract directly for employee benefits with a major health system in Southern California, bypassing the conventional insurance model.

The move, announced Tuesday, marks the expansion of Boeing’s direct-contracting approach, which it has already implemented in recent years in Seattle, St. Louis and Charleston, S.C.

Other large employers are also pursuing this idea in regions where they have big concentrations of workers. In some cases, they refer employees to nationally top-performing hospitals for select surgeries.

MemorialCare Health System said Chicago-based Boeing selected it from a group of bidders for the five-year contract in Southern California, where the company has roughly 37,000 employees and dependents. Financial terms weren’t disclosed.

“More employers are interested in moving in this direction,” said Barry Arbuckle, chief executive of the MemorialCare Health System, based in Fountain Valley, California. “It reflects the desire of these employers to participate in bending the cost curve for health care, and it allows the provider to have a more unfettered relationship with the employer and employees.”