Quad/Graphics Inc., a longtime national leader in direct health care contracting, is canceling its roughly 400 medical provider contracts in Wisconsin and shifting to Anthem Inc.'s national network effective Jan. 1, 2015.

The Sussex, Wisconsin-based commercial printer will save “millions of dollars” a year by switching to Anthem's network for all health care services for its employees, said John Neuberger, Quad's director of client partnerships.

The move is the opposite of the trend among self-insured employers, in which 11% already contract directly with providers for various health care services and 28% are considering doing so in the next three to five years to reduce costs, according to an Aon Hewitt survey released earlier this year.

Quad offers its 6,200 Wisconsin employees a narrow network of doctors, hospitals and ancillary providers.

Many directly contracted health care relationships go back 15 years, with pricing that historically beat national insurers, Mr. Neuberger said. But as health plans have expanded their presence in the state, their discounts have improved, he said.

“We did get good pricing, but in large markets like this, I'm learning it's just hard to compete with the big guys,” Mr. Neuberger said.

Quad conducted a request for proposals in the first half of the year to compare its direct contract pricing with national insurers'. By summer, it decided to go with Anthem's proposal.

The new package replaces about 400 direct contracts with providers covering a broad range of services.

“We were buying everything, and that was kind of the challenge of renegotiating all of those things,” Mr. Neuberger said.

Gerald Frye, president of The Benefit Services Group Inc., an employee benefits consultant in Pewaukee, Wisconsin, said the rise of accountable care organizations under the federal health care reform law, the growth of health insurance exchanges and the emergence of new health-system partnerships in the state means “you're going to see dramatic purchasing pattern changes” as insurers offer new products and target different markets, and providers align to deliver value-based care.

Quad's decision “is not abnormal at all” given the changing dynamics, Mr. Frye said.

A. Michael La Penna, founder and a principal at Grand Rapids, Michigan-based health industry consultant The La Penna Group Inc., said if Anthem came along with better pricing, “it was because Quad set a standard that Anthem had to achieve.”

But A.J. Lester, president of the Houston-based direct contracting consultant A.J. Lester & Associates Inc., questioned whether large managed care companies' discounts offset administrative fees and other costs of doing business with commercial insurers.

Quad declined to discuss specifics of its deal with Anthem.

Quad, which has about 25,000 employees at 70 facilities in North America, Europe and Latin America, dropped its rental network and direct contracts with providers outside of Wisconsin about four years ago and shifted to a national U.S. network with Anthem.

The printing company also is growing by acquisition, including the May purchase of Waseca, Minnesota-based Brown Printing Co. and the February purchase of Woburn, Massachusetts-based UniGraphic Inc.

“We're in 35 states now, so to go out and develop direct contracts is kind of impractical,” Mr. Neuberger said.

He insists that Quad remains committed to maintaining a dialogue with quality medical providers in Wisconsin and, if possible, selectively contracting with them.

“While we're getting out of the network contracting business, we're not getting out of the provider-employer relationships business,” he said.

Mr. Neuberger expects disruption of existing patient-provider relationships of no more than 1% to 2% since employees will have access to a broader provider network.

Health plan members may continue to receive primary care through clinics operated by the company's QuadMed subsidiary, which still has outside clients.

Quad's priority in the next year will be steering patients to high-value hospitals, specialists and other providers within Anthem's network, Mr. Neuberger said.