Tri-State firms mull direct medical contracts.(Brief Article)(Statistical Data Included)

As insurance rates climb, some are bypassing HMOs

With health insurance premiums rising, more large employers are reconsidering an old idea -- bypassing HMOs and directly contracting with hospitals and physicians to provide certain types of medical care for their employees.

These direct contracts, employers hope, will save money while keeping the quality of care high for employees who are easily lured away in a tight labor market. The danger is that by cutting out the middleman role of insurance companies, employers and health care providers must take on the administrative work of a health plan, managing such aspects as contract negotiations and patient eligibility.

One local company embracing direct contracts is Cincinnati Financial Corp. Direct contracts for certain cardiac, orthopedic and gastroenterology procedures save the company 25 to 30 percent over …