By Manny Pastreich, President, 32BJ SEIU and Nick Stefanizzi, CEO, Northwell DirectPosted on May 14, 2026
American healthcare is dynamic and lifesaving – while also becoming unattainable for too many Americans at a price they can afford. For decades, the standard response to rising costs has been to shift costs to workers by raising deductibles, raising premiums, cutting services or shrinking access. The primary payers of American healthcare, employers and workers, now face a staggering $18,500 per employee cost.
As a result, the traditional commercial insurance model, defined by murkiness and overreliance on third-party intermediaries, is no longer just inefficient. It is broken.
But there are solutions starting to emerge from a new kind of market-driven approach that keep quality at the center. They are solutions that prioritize cost efficiency over cost shifting, transparency over complexity, directness over bureaucracy.
The goal of the system should be high quality and good access. But too often the friction that exists between healthcare financing and delivery gets in the way.
That friction increasingly results in the passing of the financial burden to employers and union health funds. And it’s not sustainable. This pressure is creating a new opportunity: a shift toward direct contracting. The solution is simple. Those who pay for care (employers and union health funds) deal directly with those who provide it (health systems).
There is a living case study for this model here in the New York metro area. In a historic move, the 32BJ Health Fund, representing 100,000 building service workers locally, and Northwell Direct have implemented a direct-to-purchaser solution that bypasses the traditional insurance model. The model is now fully operational for 32BJ members, giving members expanded access to an extensive network of 39,000 providers at lower cost, including thousands of Northwell Health providers available at a $0 copay. The result is that the 32BJ Health Fund expects to save $46 million (20%) in the first year alone. It is a total reimagining of how health benefits are provided, and the mechanics of the deal offer a blueprint for employers and union health funds nationally.
First, by contracting directly, 32BJ Health Fund and Northwell Direct remove expensive layers of third-party bureaucracy that add cost without adding a single ounce of clinical value. Second, the cost savings aren’t achieved by cutting care, but by aligning economic interests. Third and most importantly, it adds predictability. While the rest of the country braces for double-digit spikes, this agreement caps annual price increases at 5%. Furthermore, by slashing hospital copays by 90%, from $1,000 down to just $100, 32BJ members are expected to save $5 million in out-of-pocket costs in the first year alone.
This model proves that when the incentives of the provider, the payer and the patient align, everyone wins. The health system gains predictable volume and faster payments. The union health fund saves millions to preserve its benefits without sacrificing access to care. And the worker gets quality care without the fear of a surprise bill.
By establishing a transparent framework for direct care, we are proving that it can be a blueprint for the entire industry. With 50 percent of Americans receiving health benefits through an employer or union health fund, this is a scalable model for how we can bring down healthcare costs and actually start to improve our healthcare system. We are proving that when those who provide the quality care and those who pay for the care are aligned, you can find a sustainable middle ground that protects the patient’s wallet and the nation’s health.