Why it exists
For decades, group health insurance worked the same way: a small number of large carriers built networks, negotiated rates with providers, and sold employers a plan built on those networks. Employers paid a premium and trusted that the carrier had negotiated well. Providers accepted whatever rate a carrier offered, because access to that carrier's employer base mattered more than any single rate.
That arrangement works reasonably well when a carrier's incentives line up with the employer's. It works less well when they don't. A carrier paid based on a share of total spend, for instance, has less reason to push spend down aggressively than an employer paying the bill directly.
How it differs from a traditional network
Direct contracting doesn't remove structure — it removes the intermediary who sets pricing without the purchaser in the room. Employers still get a network. Providers still get patients. The rates, the terms, and the visibility into both simply live somewhere both sides can see them, instead of inside a carrier's internal system.
What changes for purchasers
A self-funded employer working with a direct-contract platform can see the actual rate for actual services, choose which providers to include based on real terms rather than a fixed panel, and pay a flat technology fee rather than a percentage of spend or savings.
What changes for providers
A provider working through a direct-contract platform sets their own rates instead of accepting a carrier's fee schedule, reaches new employer relationships without giving up a share of every claim, and keeps their existing billing workflows and clearinghouse relationships.
Where OpenNetworks fits in
OpenNetworks is the technology platform that makes direct contracting practical at scale. It lets providers publish rates, lets purchasers assemble networks from those rates, and automatically reprices claims against the agreed terms — without either side renegotiating for every single claim.