Nick Stefanizzi is CEO of Northwell Direct, the for-profit subsidiary of Northwell Health, which is quickly picking up steam providing plans to employers. He discusses what trends the company is seeing and what they portend for providers and payers.
Tell us about Northwell Direct and who you’ve been serving before your parent organization signed up.
Northwell Health has a rich history of innovation and efforts to diversify its revenue streams and Northwell Direct is a result of that innovation culture. The system has a perspective that we thought could be valuable to other employers, given that Northwell Health is the largest employer in the state of New York. We also felt that we had a unique set of clinical and other capabilities.
So Northwell Direct went through an innovation incubator over the course of a couple of years and launched formally in the second quarter of 2020. It’s focused on providing a range of at-work solutions that can be delivered in the office or virtually for an employer and their workforce, as well as offering a network solution that would provide a direct-to-employer, direct-to-provider contracting solution for self-insured employers. In a lot of ways, Northwell Direct allowed the health system over the last year and a half to extend the reach and extend the efforts that it was making in combating the pandemic overall.
Northwell Direct has worked with over 50 different employers, large and small, for-profit, not-for-profit, across a diverse range of industries, on COVID-related efforts. Whether that was testing, vaccinations, virtual clinical triage and care navigation, or consulting services. It’s employers from JetBlue to the Port Authority of New York and New Jersey, to a number of academic institutions. And frankly, it was a really rewarding experience for us getting to be a part of not just taking care of the health and wellness of those employees, but also helping to support the economic recovery of New York.
What do you see as your advantage over larger insurers?
We had a great foundation in the network from Northwell Health, but we recognized that in order to effectively serve those New York metro area employers we had to press into places that the health system didn’t traditionally reach.
So we’ve engaged with Montefiore in the Bronx, Maimonides in Brooklyn, RWJBarnabas in New Jersey, and providers in Connecticut, and up into the Hudson Valley, so we could augment what the health system had from its employed providers and owned assets, but position us to be able to minimize disruption if an employer made a decision to adopt our network solution. We have a robust provider network, over 19,000 providers, over 50 hospitals, and growing. We are positioned to go toe-to-toe with any traditional insurer.
How many of your beneficiaries end up in Northwell facilities?
We think about the network as broader than just Northwell, and our Tier 1 network encompasses all of our providers that have opted to participate in the Northwell Direct Network. When we looked at Northwell Health’s utilization, over 85% of it fell within the Northwell Direct Network.
Outside of Northwell when we engage with other employer groups, we complete a disruption analysis, and given the breadth of the network we’ve built, the results that we’ve seen with other employers have been consistent with what Northwell is experiencing at a minimum.
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Are you involved in any value-/outcomes-based contracts?
It is something that we have been thinking a lot about. We think we have an opportunity here based on what we offer to employers—a high-performing network that can save on average up to 20% of their spend, and we do that based on a claims repricing exercise. That’s pretty compelling. But we also feel an obligation to continue to push into the forefront of moving away from fee-for-service and toward shared savings and quality-based payment models. So that is something that is absolutely on our radar, on our roadmap, and we are willing to engage with employers in a meaningful way.
What do you see employers being drawn to?
On the network side, the employers we talk to are tired and they’re ready for a change. The reason they’re tired is because in the traditional insurance models they see the year-over-year increases from the traditional payers. The trend lines for a number of years have been moving in the wrong direction. And they’re tired of the perennial question of, “How much of that premium increase is the business going to absorb, and how much are they going to pass on to their employees?”
So you’ve got that dynamic playing out in addition to the business and financial disruption created by the pandemic over the last two years. There’s an openness to new solutions to deliver a high-quality health benefit to their employees. So I think there’s a real opportunity for us for direct-to-employer, direct-to-provider solutions to have a real impact on how healthcare is organized and delivered in the New York metro area. On the other side of our business, the at-work services space, we are starting to see a lot of interest from employers in how they can invest in the health, wellness and resiliency of their workforce.
And whether that’s general wellness and engagement programs, or whether it’s something like behavioral health—where we are seeing an incredible demand for innovative solutions—we are hearing employers say, “We know that if we’re going to win the war for talent, we have to be seen as the employers that are making the investments in the health, wellness and resiliency of our workforce. Ping-pong tables and beer taps in the office don’t cut it anymore. It’s about the investments that are being made to support the employees and their health and wellness.”
What metrics are you using to identify good partners?
The nice thing is we have relationships not just in the New York metro area but across the country with providers who we believe are of a similar caliber of quality and service. We’re looking at all of the standard metrics that you would think about that we evaluate from quality perspective and a patient experience perspective. We need providers that are willing to customize and curate care management solutions and the care delivery model for the specific needs of an employer’s workforce. So it’s based on relationships—who we know are the right quality, high-performing, great experience providers. But it’s also a philosophical match so that we can most effectively maximize the direct relationships we’re creating.
