How the CEO at Northwell Direct Accelerates Growth with a Clinician-First Approach

Growth is rarely easy – specifically, growth driven by customer interest and market demand rather than the temporary variety driven by acquisition, cost takeout or organizational restructuring.

Because markets are moving faster than ever, we believe sustainable growth results from:

• Unlocking compelling customer insights to inform growth strategies
• Creating relevant, impactful growth moves
• Executing faster and more efficiently

Through this series of interviews with healthcare leaders, we explore the driving insights, key actions and anticipated impact of their recent growth strategies.

In this edition, we sit down with Nick Stefanizzi, chief executive officer at Northwell Direct, to learn more about the company’s origin and philosophy around growing its integrated care network.

---

Northwell Direct is a subsidiary of Northwell Health, one of the largest healthcare providers in New York. Established in 2020, Northwell Direct offers a direct-to-employer health care network of more than 31,000 providers and customized wellness programs to support employee health. This allows employers to offer high-quality healthcare to their employees without going through traditional insurance companies. Northwell Health utilizes Northwell Direct’s provider network for its own employee health benefits, ensuring comprehensive and cost-effective care for its workforce.

Nick Stefanizzi is the CEO of Northwell Direct, where he is responsible for the strategy, operations, growth and financial performance of Northwell Health’s direct-to-employer organization. Stefanizzi has been with Northwell Health for 16 years, serving in various roles, including assistant vice president for HR innovation and organization effectiveness as well as director of management services for Northwell’s ambulatory network.

---

What Is the Major Unlock That Informed Your Approach and Strategy for Northwell Direct?

Northwell Health had its own insurance company (Care Connect) that was incredibly successful – but we were not prepared for risk adjustment, so that business venture shuttered in 2018. While that was challenging, what wasn’t lost was our belief that playing in that space was the right approach. At the same time, our organization started to grow. We’re the largest private employer in the state of New York, in addition to being the largest healthcare provider. Organically, we started to get inbound inquiries from employers saying, we’re having these kinds of challenges in our employee plan – can you help us figure this out as both an employer and a provider? We saw that we had an opportunity to do something different for the communities we serve. That was really the genesis of Northwell Direct. We then built a business around that concept, not only to meet employer needs but to disrupt the payer space.

“It’s our belief that a more direct relationship between those who provide the care and those who pay for the care is beneficial, and that today, payers have inserted themselves between those two entities.”

There’s still a role for the major carriers to play, but they don’t need to sit between us, and in fact, by working together with the employers and their employees, it’s our belief that we can better manage care and drive improvements in quality and outcomes.

We only work with self-funded employers in their benefit design. In New York state, that means more than 100 employees, and we don’t carry any financial risk, as we do not offer an insurance product. We’re on the hook for performance. Our focus is on delivering value, savings, efficiency and outcomes for our employers. The other thing we didn’t do was invest in building an insurance company. There are third-party administrators that have the capabilities needed to support an employer-sponsored plan, so why not partner instead of building it ourselves and going at it alone?

“We saw a business model that was ripe for disruption and employers who were hungry for support, grappling with the challenges they’ve had with their employee population and desperate to arrest a trend that had been moving in the wrong direction for over a decade.”

We saw an opportunity to build the platform differently with partners.

In Addition to Opening a New Line of Business, What Impact Did Northwell Direct Create for Your Key Audiences?

We’ve made a concerted effort to remove the traditional denials and hurdles in this space that don’t add value or drive for the member or material savings for the employer. While we can accommodate any benefit design requirements, we have examples of clients for whom, if their employees receive care within our tier one network, there are zero prior authorizations needed. And it doesn’t lead to higher costs. There is no statistical difference in unnecessary utilization or unnecessary testing.

“We take a clinical-first approach – what does the doctor believe is necessary?”

We trust that we have providers who are going to do the right thing by the patient and by the plan, and then manage the care intensely to make sure it’s as efficient as possible. It’s about administering consistently with the benefits plan but providing clinically oriented insights into how that benefit design can be enhanced to drive the right patient behaviors and the right patient choice of the highest quality, lowest-cost providers, and then wrapping the member with support that is integrated with and endorsed by the clinician. By taking a provider-oriented approach, our engagement levels are much higher. We’re able to share the care management information back with the provider so they can take a more holistic view. And lastly, what we can do locally that the national carriers can’t is get on the ground. If we have a member who is admitted, we will send a nurse care manager to their bedside to coordinate their follow-up care, their appointments and make sure they’re clear on what happens post-discharge. You can’t do that from a contact center across the country.

“Clinical-first, integrated care management, boots on the ground and a structural approach that is different in terms of our philosophy around denials versus provider enablement – that’s what we’re doing, and it’s fundamentally different from how carriers think about this.”

How Challenging Was It to Get the Business Running, and How Will You Execute Your Growth Future Plans?

It’s hard for health systems to get into this business because it takes investment, and health systems are struggling financially. They are under enormous pressure, there are a lot of competing priorities, and it takes a lot to stand up a new venture like this.

“You cannot do this by having somebody do it off the side of their desk.”

You have to build competency and capabilities. For example, we brought in people with skill sets that traditionally don’t exist within the health system. We’re selling an incredibly complex product in the insurance space, even though we’re not an insurance company. I have licensed brokers that work for me – that skill set and those broker relationships don’t exist in health systems. You have to invest in building the appropriate infrastructure. You need talent that doesn’t necessarily exist from within the organization, and you have to build capabilities. But you don’t need to do it all. Just pick one thing that an employer might need or have a conversation with a major employer in your region and ask what they would want help with and start there. Yes, there are competing priorities, competing investments and a tremendous amount of pressure, but I believe this strategy in the long term will alleviate those pressures.

In the next five years, we will expand the field of play and be a major regional player. There’s an opportunity to grow our network and the geographic footprint of employers we serve. In addition to that growth, we’re diversifying the ways in which we partner with employers. That means new products and services. That means rolling out digital platforms to augment our clinical capabilities. That means partnering differently, even within the insurance space. We’re going to roll out our own bundles and centers of excellence.

“I believe, fundamentally, there is a national opportunity here for health systems to partner together and for us to take the work we’re doing here, to line it up with the work that Baylor is doing in Texas, what Orlando Health is doing in Florida, what Providence is doing up in Washington and California, and for us to figure out how to stitch something together that would allow us to scale nationally.”

That’s a very complicated proposition. I don’t know exactly yet how it will come together, but I believe there are enough health systems that see this as an interesting space and that there’s opportunity for us over time to figure out how to make that possible together.

---