The Buyers Health Care Action Group (BHCAG) in the Twin Cities has implemen
ted a new purchasing initiative that offers employees a choice among care s
ystems with nonoverlapping networks of primary care providers. These system
s offer a standardized benefit package, submit annual bids, and are paid on
a risk-adjusted basis, Employees are provided with information on quality
and other differences among systems, and most have financial incentives to
choose lower-cost systems. Generally, providers have responded favorably to
direct contracting and to risk-adjusted payments but have concerns about t
he risk-adjustment mechanism used and, more importantly, the strength of em
ployers' commitment to the purchasing model.