In conversation with Mehul Agarwal, Founder of Health Compiler, David Balat traces a path from healthcare executive to policy director to founder, explaining how he came to build Direct Care Alliance and why he believes the fee-for-service system was never designed with prevention in mind.
From the C-Suite to the State Capitol
David Balat spent roughly two decades as a healthcare executive and CEO before shifting to policy work. He became healthcare policy director at a think tank in Austin, Texas, where he worked with two presidential administrations and the governors of three states. That work produced real legislative outcomes: 18 bills became state law in Texas, including legislation advancing hospital price transparency.
What Balat saw during those years reinforced a conviction he had developed on the executive side. The traditional healthcare system, in his view, is not broken. "The system is designed," he says. "It's not an accident." Fee-for-service incentivizes volume over outcomes, and the entities operating within it are behaving rationally given the rules they are working under.
The Case Against Hospital Pricing
Balat is particularly forceful on hospital pricing practices related to transparency. He points to price transparency legislation as a tool for exposing disparities, though he acknowledges the gap between legislation and enforcement remains wide.
His work in policy gave him a front-row seat to how hospital systems respond to transparency requirements. The pattern, as he describes it, is resistance followed by minimal compliance. The data is technically available but not always accessible or understandable to the employers and patients who need it most.
Building Direct Care Alliance
After years of studying these problems from both the executive and policy sides, Balat founded Direct Care Alliance, a point solution designed for self-funded employers. DCA handles direct contracting with hospitals, care navigation, and bundled pricing.
The model is built around taking the intermediaries out of the equation and connecting employers directly to expensive hospital-based care. "We're not trying to build a network," Balat explains. DCA negotiates directly with facilities and physicians, bundling pricing so that the employer knows the cost before the procedure happens, not after.
DCA currently operates in six states, including Utah, Arizona, Texas, Louisiana, and Florida, with a goal of reaching all 50.
Why DPC Stands Apart
"DPC is the only model that was designed for prevention," he says. Fee-for-service was designed for treatment, and every reform built on top of it inherits that orientation. DPC, by contrast, starts from a fundamentally different premise: keep people healthy in the first place.
He sees DCA as a complementary layer. Where DPC handles the primary care relationship, DCA addresses the specialist, surgical, and hospital side of the equation, everything that happens when a patient's needs go beyond what a primary care physician can manage in their office.
Leadership and Relationships
Balat's approach to leadership is rooted in relationships. He describes his management philosophy as centered on human connection, knowing the people you work with and understanding what drives them. For a 14-person organization working across six states, that personal approach is both a cultural value and a practical necessity.
He is candid about the challenges of scaling. Direct contracting requires trust, and trust requires presence. Building relationships with hospitals, physicians, and employers in each new state is labor intensive. But Balat sees that as a feature, not a limitation. The relationships are what make the model work.
Advice: Start With the Model, Not the Fix
For employers looking to take more control of their healthcare spend, Balat's guidance begins with a structural question: are you operating within a system designed for treatment, or one designed for prevention? If the answer is the former, no amount of optimization within that system will fundamentally change outcomes. The shift, in his view, has to begin with choosing a different model entirely, one where the incentives align with keeping people healthy rather than treating them after they are sick.