Steerage That Actually Works: How to Move Members Into Direct Contracts

Every direct contracting case study has a slide that looks something like this:

"We redirected 70% of eligible volume into the preferred network and achieved 20–40% savings per case."

What those slides rarely show is the work required to move real members with real lives into a new pathway.

Direct contracts live or die on steerage.

Here is a practical way to design steerage that members will actually follow, without turning the benefit into something they resent.

Principle 1: Make the default path the right path

Most employees do not wake up wanting to optimize network design.

They follow defaults.

If the direct contract is going to work, the "default" pathway needs to favor the new arrangement:

• Navigation vendors trained to present the direct path as the primary option
• Scheduling scripts that offer the direct network first
• Pre-cert workflows that automatically flag eligible cases for the program

The legacy network should still be available, but it should feel like a conscious deviation, not the automatic choice.

Principle 2: Make the economics obvious to members

Members rarely see the enterprise-level savings.

They see:

• The deductible
• The copay
• The bill that shows up in the mail

If you want steerage, you have to line up the member economics with the employer economics:

• Lower or waived cost sharing for direct contract providers
• Predictable out-of-pocket maximums for episodes routed through the program
• Cash incentives for completing certain procedures in the preferred pathway

Avoid clever but opaque designs. A simple "if you use this path, you pay less" story travels faster than a tiered benefit that only actuaries understand.

Principle 3: Reduce friction at the moment of need

The worst time to introduce complexity is when someone is sick or injured.

Your steerage design has to recognize how people actually seek care:

• They often follow a physician referral.
• They call the number on their ID card.
• They Google the nearest facility.

Meet them there.

• Train referral sources where possible, especially for targeted service lines.
• Make sure the main member services line understands and prioritizes the direct pathway.
• Ensure digital tools (apps, portals) highlight the preferred network when members search.

If the direct contract is three extra phone calls and a form, members will default back to the old route, even if it costs them more.

Principle 4: Start with service lines where steerage is realistic

Not every part of the benefit is equally steerable.

Direct contracting works best in areas where:

• The decision window is not purely emergent (e.g., scheduled surgeries vs. trauma)
• Members are willing to travel a bit for better economics and experience
• A limited number of providers account for a large share of spend

Orthopedics, GI, imaging, maternity, and certain chronic care programs often fit this profile.

Start there before you try to redesign primary care or every specialty at once.

Principle 5: Communicate like you are launching a product, not a policy

Most benefit communications are long, dense, and quickly forgotten.

For direct contracting steerage, treat the program like a product launch:

• Name the program and tell a clear story about what it does.
• Use simple visuals to show the difference between the old and new pathways.
• Send targeted communications to the populations most likely to use the benefit.

Examples:

• A one-page explainer mailed and emailed to members in the pilot geography
• Short videos or webinars for HR and frontline managers
• FAQs that answer "What happens if my doctor is not in this program?" in plain language

Principle 6: Align incentives across partners

Steerage breaks when the people closest to members are misaligned.

Make sure:

• TPAs understand how to route pre-certs and referrals
• Navigation vendors are compensated partly on successful use of the direct pathway
• Providers see real volume and cash-flow benefits when they participate

If a call center script says one thing, the TPA system does another, and providers see no tangible upside, the program will quietly stall.

Principle 7: Instrument the funnel and watch it weekly

You cannot manage what you cannot see.

For each targeted service line, track the funnel:

1. Eligible cases identified
2. Members offered the direct contract option
3. Members who accept and schedule through the program
4. Cases completed

Then look at why members say no:

• Travel distance
• Provider preference
• Confusion or lack of trust

Fix what you can in near real time.

Sometimes the answer is as simple as clarifying that their preferred physician is in the program or adjusting incentives when distance is a real barrier.

Principle 8: Protect member trust

If members feel tricked, the program is over.

Be clear about:

• When the direct pathway is optional vs. required
• How exceptions are handled
• What happens if something goes wrong during the episode

Direct contracting works best when members feel like the employer has negotiated something better on their behalf, not when they feel like the employer is cutting corners.

The bottom line

Steerage is not a side note in direct contracting. It is the strategy.

A beautifully priced contract with weak steerage is just an accounting curiosity.

If you design the default path, the member economics, the communication, and the incentives with the same care you bring to the contract negotiation, you will give your direct contracts a real chance to perform.

If you treat steerage as an afterthought, the model will look weak long before the contract term is up.