We often hear about the promise of direct contracting with employers for musculoskeletal care and disrupting the current insurance model. However, that does not always happen.

Ryan Wells of Health Here spoke at TOA’s 2026 Annual Conference about direct contracting with employers for episodic care and what the actual future holds.

Click here to learn more about Ryan Wells and Health Here.

Health Here’s Qub Anchor Providers are actively receiving referrals from 775,000 lives, and it expects this number to rise dramatically by end of year as it has recently onboarded multiple Center of Excellence (COE) partners. The platform is integrated with 900-plus physicians across 17 states, and Health Here expects to surpass 1,500 physicians within the next 12 months.

While the majority of specialists are currently orthopaedic, Health Here has recently expanded to GI and is open to any specialists providing discretionary care.

TOA sat down with Ryan Wells to follow up on his talk at TOA’s 2026 Annual Conference.

TOA: We’ve heard a lot about direct contracting for many years now, and TOA has heard from many companies in the space. However, many of those companies seem to have fallen off. What is the current outlook on direct contracting?

Ryan Wells: Past attempts for direct-to-employer (DTE) contracting by specialist groups had many obstacles; we advise groups to take an “omni-channel” approach to this theme. Like all healthcare models, specialists need to optimize for their local market.

At current state, it’s unlikely that one employer or even referral source will yield a game-changing number of net new referrals. However, there is no reason not to start with any model as long as partner expectations match the opportunity. We break direct contracting into three categories: Local DTE, COE, and Marketplace.

In our data, the COE models yield the highest volumes of referrals, which is to be expected given there are over 50M covered lives tied to these models.

The Goldilocks local DTE deal is a self-funded employer that is geographically aligned with the anchor provider group, is not bigger than 5,000 covered lives (HR gets more complicated when you get bigger), and is a high utilizer of MSK services (typically, MSK is top three for any major employer). We have seen independent school districts as an ideal fit, as teachers are heavily influenced by waived cost share. Ideally, groups can align with local benefits consultants to accelerate self-funded employer adoption. We also see Direct Primary Care models as well-aligned referral partners to accelerate local market direct-contracting growth.

TOA: It seems like direct contracting hasn’t taken over the way that employers approach their health care decisions. Why is that?

Ryan Wells: Many brokers and TPAs embrace the themes, but it is the execution and scale layer that generates the most friction on these deals. No stakeholder wants to put effort into a health plan carve out that doesn’t yield member utilization or create member experience problems (HR cringes at the thought of their employees confused or upset about a benefit that does not deliver on its promises). Our technology enables these models to operate outside traditional fee-for-service revenue cycle payment rails by intercepting and rerouting claims into value-based payment workflows. From member surveillance and episode creation to multi-provider payment distribution, Qub automates the full episodic payment lifecycle. In doing so, we are helping unlock a $350B specialty-care marketplace increasingly driven by self-funded employers emerging as a new and influential payor class.

Specialists appreciate our approach because we are attacking the administrative layer to find efficiency and savings, while allowing for their revenue to remain whole or better. Employer/TPA/Broker/COEs appreciate our model because they do not have the capacity to execute on each member experience, modify the claims process, or manage payments beyond current FFS infrastructure. This optimization allows for a positive sum healthcare model, allowing for independent practices to differentiate and thrive.

TOA: ERISA covers many of the commercial lives in Texas. How does that affect direct contracting?

Ryan Wells: Important nuance: “ERISA plan” and “self-funded plan” are not identical. Most private employer health plans are ERISA-governed, but self-funded ERISA plans matter most commercially because ERISA preemption limits state insurance mandates and lets employers directly design networks, steerage, bundles, Centers of Excellence, and claims payment strategy. The Department of Labor explicitly notes ERISA preemption and that states regulate insurers but cannot deem ERISA plans to be insurers.

TOA: What are the implications for Texas employers’ high-risk MSK spend?

Ryan Wells: MSK is a major employer cost category because it combines high prevalence, imaging, PT, injections, surgery, facility-price variation, and lost productivity.

For Texas employers, the opportunity is not to “pay surgeons less.” It is to remove waste around the surgeon:

Main savings levers

• Site-of-care migration and optimization: ASC / outpatient where clinically appropriate instead of high-cost hospital outpatient or inpatient.
• Episode bundles: one prospective price covering surgeon, imaging, facility, anesthesia, implant, post-op pathway, and potentially a warranty/complication terms.
• Appropriateness controls: second opinions, conservative-care pathways, PT-first for non-red-flag spine/MSK, evidence-based implant selection are common mechanisms for utilization management.  We would like for PROMs to play a role in defining appropriateness, so as to not delay surgery if the candidate criteria fits and better manage patient expectations as to when surgery is appropriate.  
• Direct contracting: employer + orthopaedic group + ASC + TPA contract outside opaque carrier contracts.
• Navigation and steerage: waive deductibles/copays for high-value providers; require pre-op optimization; guide employees early.
• Quality guarantees: track PROMs, infection, revision, readmission, return-to-work, avoidable imaging, opioid utilization.

RAND’s commercial-price work shows employers/private insurers paid hospitals 254% of Medicare on average in 2022, and that within-state hospital price variation creates large potential savings from smarter purchasing.

TOA: How can employers and orthopaedic groups align without hurting surgeons?

Ryan Wells: The right model protects surgeon economics by removing administrative and complication waste, optimizing site of care, implant, and PT/OT.

Recommended structure

• Employer contracts with an orthopaedic COE or independent orthopaedic group.
• Surgery performed at physician-aligned ASC or efficient outpatient facility when safe.
• Prospective bundles include transparent surgeon fee, facility fee, anesthesia, implant, and PT. It is best to focus on a broad offering of elective procedures while understanding the employer’s market footprint when considering 30 or 90 day bundles. Consider date of service bundles to complement a 30 or 90 day bundle offering for members that are traveling considerable distance to access care.
• Surgeon professional fees respect local commercial market rates, not Medicare.
• Savings come from lower facility cost, lower implant markups, fewer unnecessary surgeries, fewer complications/readmissions, faster return to work, and reduced carrier/network spread.

TOA: What’s the bottom line?

Ryan Wells: Texas is a strong market for direct employer–orthopaedic partnerships because roughly 62% of private-sector covered lives are already in self-insured plans, and among larger firms it is about 71%. The winning pitch to employers is: lower total episode cost, faster recovery, measurable quality, and no haircut to high-performing surgeons.

TOA: Identifying all the potential employers in Texas seems overwhelming. How much of the Texas employer market has been captured by direct contracting?

Ryan Wells: Our data supports COE covered lives in Texas to be greater than 760K lives. We are only active in the San Antonio market to date; the annualized episodic growth rate in SA is 85% (April ’25 vs. April ’26 is up 350%). We are seeing this level of acceleration in multiple major metro markets across the US.

TOA: With so many of the Texas commercial lives covered by ERISA, do you see a scenario one day in which some orthopaedic surgeons only partner with employers through direct contracting deals?

Ryan Wells: We see the self-funded employer market as a new payor class that is the most progressive. It is likely groups that lead with these themes will have 15-20% of revenue derived from self-funded employers directly or via COE models.

TOA: The traditional health insurance market finally seems poised for major disruption. Increasing premiums and other factors may lead to major changes. What’s your take?

Ryan Wells: Per above, the commercial incumbents are in a challenging position as COEs have opportunistically snagged the largest self-funded client product requests. However, given ASOs are not actually losing the “lives” per the COE contracts, it will be interesting to see how they continue on as the COEs gain more market power and build out new offerings (ie, Hinge has launched a Migraine product). Now that the MA market is less profitable, BUCAs most likely are being forced to circle back to less profitable ASO products (PPOs as a product have been neglected for over a decade). Can they build and release new products and plan designs to match the demands of self-funded employers? That is the big question.

TOA: What do you predict happens to the traditional insurance market over the next few years?

Ryan Wells: Reinvent Prior Auth, Gold Card 2.0 (doubtful PA will be removed entirely), restructure HDHP with flexible payment models (retaining patient accountability, without limiting access to care), or continue to lose self-funded employer clients—as the “waive all” feature of bundle payments is the carrot that steers patient referrals…I would like to see quality measures such as a baseline functional PROM score grant Gold Card status for related procedure, PT or image.  We are all still waiting for commercial payors to reward specialists for capturing and reporting functional outcomes.

ASOs might mirror the themes of the COE models: waived cost share, prior auth, and specialist-friendly payment models (United is active with Surest).

TOA: Back to employers. It seems like employers could control the insurance market since they bring so many covered lives to the table.

Ryan Wells: Yes, my take is that self-funded plans will be treated as their own payor class and will have plan design and models that match the need to innovate and control for cost and quality. This might be challenging for specialists as it might include narrow, curated networks that control referrals on an NPI level as compared to TIN level, even down to the CPT level for procedures.

TOA: What trends have you seen in terms of employers taking control of health care over the past few years?

Ryan Wells: Health benefit cost growth will hit a 15-year high this year. One third of CFOs reference healthcare costs as a top 3 operating expense concern. We have entered the era where employers are no longer satisfied with lazy PPO networks.  This is demonstrated by the majority of Fortune 500 companies adopting COE models for MSK, Oncology, Bariatrics and Women’s Health.    Both large and small employers will continue to push back on traditional plan models to find a sustainable solution.  We view this as a significant opportunity for orthopedic surgeons to lead and prosper by proactively managing episodic care.