If you have any questions, please call us at (281) 809-6960 or email us at HBCHmembership@HoustonBCH.org
Register Here for our inaugural conference on March 27 at the Houston Hilton Post Oak. The theme of the conference is Excellence in Population Health and will feature local and national employer case studies of innovative benefits solutions.
I have had the fortunate experience of spending the last three years as executive director of HBCH. We will be featuring some of the best employer case studies and innovative design concepts in the U.S., including Houston. One of my roles is to be aware of what is happening locally and nationally to improve employers’ cost, quality and experience in health benefits design and delivery, and to present those to our market. I have had the opportunity to serve on the Board of Governors of the National Alliance of Healthcare Purchaser Coalitions, work with my peer coalitions from around the country and become engaged in the national discussion of employer health benefits. I can, with conviction, say that we really will have the best in the U.S. with us on March 27. We are focused on four primary pillars that are of high importance to employers who want to change the current unsustainable path of health care delivery to its employees and dependents. We will highlight the critical need for transparent pharmacy management; emerging opportunities in innovative delivery & payment; benefits design strategies based on the capture and analysis of all available data in the health investment portfolio; and best-in-class examples of employer success in population health management. Our conference can be described as one in which the status quo will be respectfully challenged. Our keynote speaker, Dr. Elizabeth Rosenthal, award-winning author of How Healthcare Became Big Business and What You Can Do To Take It Back will set the tone for the day. See you on March 27!
Chris Skisak, Ph.D., HBCH Executive Director.
HBCH is leading two employer projects that address high-cost employer concerns. The Specialty Pharmacy Collaborative can save 30%. The Diabetes Prevention Program reduces conversion to T2D by 60% and saves $2,700 per year per participant. Join us!
Specialty Pharmacy Employer Collaborative. Specialty pharmacy (SP) spend and management is of high concern for employers. Employers currently pay an average of $650 PMPY for SP. SP currently make up more than 45% of total pharmacy cost under the PBM and medical plans despite being utilized by 1-2% of the population. The cost of SP is expected to increase another 60% by 2020 and will represent the largest cost of employer pharmacy spend. The major issue confronting employers in the management of SP is the lack of understanding of their data and the lack of coordinated SP management between the PBM and medical plan. The SPP will identify opportunities for improved and coordinated management using a deep-dive data analysis that is not currently being offered by PBMs, health plans or major benefits consultants. Our proposed partner in this initiative has a proven track record of demonstrating a more than a 30% cost reduction opportunity with more than 200 employers. Contact HBCH for more information.
Houston Diabetes Prevention Program (DPP). The Centers for Disease Control National Diabetes Prevention Program (DPP) is an intervention method PROVEN to decrease the incidence and cost of diabetes. It is designed for those at high risk for its development and typically results in cost savings of more than $2,500 per individual per year with an investment cost of ~$500. The PILOT will be conducted with a small subset (20-100 employees) of your ~30% pre-diabetic population to demonstrate its impact on your workforce. Employers will be provided with significant support by several organizations to minimize your valuable time.
TOP 10 REASONS FOR PARTICIPATING IN THE HOUSTON EMPLOYER DIABETES PREVENTION PROGRAM (DPP) PILOT
- Persons with diabetes average more than $10,000 in annual health care costs which is more than twice that of healthy individuals.
- Approximately 30% of the workforce is pre-diabetic and 15-30% of those convert to Type 2 diabetes within 5 years.
- The year-long DPP has demonstrated a 58% decrease the conversion to Type 2 diabetes over three years.
- There is a $2,671 annual cost savings over three years of those with controlled pre-diabetes vs. those converted to Type 2 diabetes.
- The pilot will be conducted with a very small subset (20-100) of your pre-diabetic population so cost is minimal, the risk is low, and opportunity is high.
- The DPP cost of ~$500 can be paid through the existing claims process and/or by use of health plan wellness funding budgets.
- Participants will receive significant support from a variety of organizations.
- The DPP will be Medicare required on April 1, 2018, and may become the new employer standard for diabetes prevention.
- You can earn recognition, as DPP use by employers is new and Houston is being followed by the State and National organizations.
- It’s the right thing to do, as the DPP improves population health and total well-being.
The DPP has demonstrated that Type 2 diabetes can be prevented or delayed in high-risk individuals through lifestyle change. The initiative is comprehensive and focused on behavior modification, weight loss through exercise, and healthy eating. The DPP is not designed to be a weight loss program. It is a lifestyle change program. That said, participants have seen a 5-7% body weight loss, reducing the risk of developing diabetes by 58% over three years. The program also resulted in a 25% reduction in medication use for hypertension and hyperlipidemia and a 2% reduction in workforce absenteeism for participants.
Register here for an HBCH EMPLOYER ONLY meeting to review local health plan performance. eValue8 is a national tool developed and used by employers and others to improve plan delivery, quality and design which directly impacts costs.
eValue8 benchmarks health plan by assessing its local and national performance. All major health plans are invited to participate, and all do on a national basis, but only United Healthcare elected to participate locally in 2017. HBCH believes that by attending the eValue8 site visit employers will request that their health plan participates in 2018. One HBCH employer Board member, after participating in an introductory overview of eValue8, responded with “Why have we not been doing this before now?"
eValue8 is a national, standardized health plan evaluation used to articulate purchaser expectations, facilitate value-based purchasing by supplying the quality factor in the value equation, provide benchmarks for local and national comparisons - between plans, and over time, promote continuous quality improvement, drive collaboration between plans and purchasers and educate employees on plan quality. It does not address cost but rather how well a plan is assisting members to manage costs and improve health. There are eight eValue8 modules of which two will be highlighted on January 26, Pharmaceutical Management and Helping Members Manage Chronic Conditions (CAD, Diabetes, and Behavioral Health). Other modules include Provider Measurement and Management, Helping Members Stay/Get Healthy, Helping Members become Good Consumers, Helping Members Helping Members Manage Acute/ Episodic Conditions and Advanced Care, and Client Support, Data Analyses and Reporting. It is unfortunate that a 2014 nationally representative survey of employers finds that only 7 percent of employers who offer health insurance use objective quality information.
Purchasers & Coalitions have used eValue8 as a basis for discussion on performance improvement in key areas, to assess the value of contract/accountability tool, as a quality score in an RFP, as an online plan chooser tool for employees, and to drive community collaboration in areas of interest. Employers are extremely pleased with its value. More than 85% of employers responded that eValue8 provides information that they aren't getting anywhere else; that they took take away something that they would address with their account rep; that it covered topics that are relevant that they want to stay on top of; and that they want their local coalition to continue to support eValue8.
CEOs of four organizations serving employers present the case in the Harvard Business Review for why current measures of health care quality are adequate to support the movement away from fee-for-service toward value-based payment.
By Brian J. Marcotte, CEO, National Business Group on Health; Annette Guarisco Fildes, CEO, ERISA Industry Committee (ERIC); Michael Thompson, CEO, National Alliance of Healthcare Purchaser Coalitions; and Leah Binder, CEO, Leapfrog Group.
There’s a debate in the United States about whether the current measures of health care quality are adequate to support the movement away from fee-for-service toward value-based payment. Some providers advocate slowing or even halting payment reform efforts because they don’t believe that quality can be adequately measured to determine fair payment. Employers and other purchasers, however, strongly support the currently available quality measures used in payment reform efforts to reward higher-performing providers. So far, the Trump administration has not weighed in.
The four of us, leaders of organizations that represent large employers and other purchasers of health care, reject any delay in payment reform efforts for the following three reasons:
Even imperfect measurement and transparency accelerate quality improvement. One set of measures often questioned is the Agency for Healthcare Research and Quality’s (AHRQ) Patient Safety Indicators (PSIs) used by the Centers for Medicare and Medicaid Services (CMS) and others in value-based payment programs. These indicators measure surgical complications and errors in hospitals, which is critical given that one in four hospital admissions is estimated to result in an adverse event.
PSIs remain among the most evidence-based, well-tested, and validated quality measures available. CMS uses many in its value-based purchasing programs. Use and reporting of PSIs through AHRQ’s Medicare Patient Safety Monitoring System has measurably improved quality. For instance, CMS reported a reduction in inpatient venous thromboembolisms (VTEs) from 28,000 in 2010 to 16,000 in 2014, meaning that 12,000 fewer patients had potentially fatal blood clots in 2014.
In addition to using quality measures in payment programs and for quality improvement, making measures public is key to accelerating change. “If transparency were a medication, it would be a blockbuster,” concluded a multi-stakeholder roundtable convened by the National Patient Safety Foundation’s Lucian Leape Institute in 2015. The foundation’s report cited the Leapfrog Group’s first-ever reporting of early elective delivery rates by hospitals in 2010, which galvanized a cascade of efforts to curtail the problem and thus reduce maternal harms and neonatal intensive care unit (NICU) admissions. This was effective: The national mean of early elective deliveries declined from a rate of 17% to 2.8% in only five years.
Using measures improves measurement. Providers and health care executives sometimes point to flaws in their medical-record and billing systems as a main reason certain measures shouldn’t be used. As they see it, their performance on the measures isn’t the issue; it’s their medical records or billing coding that’s the problem. They believe these internal systems should be fixed before measures that use this information are applied in payment formulas or public reporting.
But use of these measures is often necessary to break logjams in correcting the health care industry’s long-neglected weaknesses in data-quality control. Indeed, many of the nuanced imperfections providers criticize were only uncovered by public reporting, which revealed unexpectedly poor performance for some providers, prompting them to research the medical records to find out the reasons.
Even rough measures make a big difference when they are publicly reported. For instance, New York State’s release of surgical mortality data for coronary artery bypass grafting (CABG) procedures jump-started the movement to define and more carefully collect much stronger measures of CABG outcomes, and today we have many advances in cardiac care and its measurement.
In the New York example, the success in generating ever better measures — and more importantly, achieving ever better outcomes for patients — came about because providers made the changes that saved lives, and they deserve all the credit for that. A thorough, respectful process for building scientific and stakeholder consensus around measures has been orchestrated by leaders like the National Quality Forum (NQF) and the National Committee for Quality Assurance (NCQA). Purchasers are committed to partnering in the development and refinement of excellent measures while we advance transparency and payment reform alongside that work.
Returning to fee-for-service is not an option. Given the widely acknowledged waste, heavy costs, and quality-of-care issues produced by the fee-for-service system, the fact that there are rough spots on the road to value-based payment is hardly a justification for slowing down reform. If converting to a more sensible payment system were easy, it would have been done a long time ago.
The change to performance-based payment and market share requires tenacity and patience. Current quality measures may have rough edges, but stakeholders have worked hard to steadily improve their validity and reliability. Employers and other purchasers, such as those involved in our organizations, must work with forward-thinking colleagues in the health care system to continually improve the measures that publicly signal value. It will be a learning process for providers and purchasers as long as we’re guided by a spirit of transparency.
Whatever the risks of imperfect measurement, America’s first priority must be to eliminate avoidable suffering, mortality, and waste in its uniquely costly health care system. We hope that the Trump administration and lawmakers on both sides of the aisle will continue to recognize what our members see clearly: delaying payment reform is not an option.
Employers still struggle to obtain their health plan claims data. There is no ambiguity in Texas about the employer’s right to their data. Claims data integrated with other health-related data sets is a key to an effective management strategy.
Sec. 1215.003. RECEIPT OF AND RESPONSE TO REQUEST FOR CLAIM INFORMATION. (a) Not later than the 30th day after the date a health insurance issuer receives a written request for a written report of claim information from a plan, plan sponsor, or plan administrator, the health insurance issuer shall provide the requesting party the report, subject to Subsections (d), (e), and (f). The health insurance issuer is not obligated to provide a report under this subsection regarding a particular employer or group health plan more than twice in any 12-month period.
INSURANCE CODE TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE A. HEALTH COVERAGE IN GENERAL CHAPTER 1215. REPORTING OF CLAIMS INFORMATION
Sec. 1215.003. RECEIPT OF AND RESPONSE TO REQUEST FOR CLAIM INFORMATION.
(a) Not later than the 30th day after the date a health insurance issuer receives a written request for a written report of claim information from a plan, plan sponsor, or plan administrator, the health insurance issuer shall provide the requesting party the report, subject to Subsections (d), (e), and (f). The health insurance issuer is not obligated to provide a report under this subsection regarding a particular employer or group health plan more than twice in any 12-month period.
(b) A health insurance issuer shall provide the report of claim information under Subsection (a):
(1) in a written report;
(2) through an electronic file transmitted by secure electronic mail or a file transfer protocol site; or
(3) by making the required information available through a secure website or web portal accessible by the requesting plan, plan sponsor, or plan administrator.
(c) A report of claim information provided under Subsection (a) must contain all information available to the health insurance issuer that is responsive to the request made under Subsection (a), including, subject to Subsections (d), (e), and (f), protected health information, for the 36-month period preceding the date of the report or the period specified by Subdivisions (4), (5), and (6), if applicable, or for the entire period of coverage, whichever period is shorter. Subject to Subsections (d), (e), and (f), a report provided under Subsection (a) must include:
(1) aggregate paid claims experience by month, including claims experience for medical, dental, and pharmacy benefits, as applicable;
(2) total premium paid by month;
(3) total number of covered employees on a monthly basis by coverage tier, including whether coverage was for:
(A) an employee only;
(B) an employee with dependents only;
(C) an employee with a spouse only; or
(D) an employee with a spouse and dependents;
(4) the total dollar amount of claims pending as of the date of the report;
(5) a separate description and individual claims report for any individual whose total paid claims exceed $15,000 during the 12-month period preceding the date of the report, including the following information related to the claims for that individual:
(A) a unique identifying number, characteristic, or code for the individual;
(B) the amounts paid;
(C) dates of service; and
(D) applicable procedure codes and diagnosis codes; and
(6) for claims that are not part of the report described by Subdivisions (1)-(5), a statement describing precertification requests for hospital stays of five days or longer that were made during the 30-day period preceding the date of the report.
(d) A health insurance issuer may not disclose protected health information in a report of claim information provided under this section if the health insurance issuer is prohibited from disclosing that information under another state or federal law that imposes more stringent privacy restrictions than those imposed under federal law under the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191). To withhold information in accordance with this subsection, the health insurance issuer must:
(1) notify the plan, plan sponsor, or plan administrator requesting the report that information is being withheld; and
(2) provide to the plan, plan sponsor, or plan administrator a list of categories of claim information that the health insurance issuer has determined are subject to the more stringent privacy restrictions under another state or federal law.
(e) A plan sponsor is entitled to receive protected health information under Subsections (c)(5) and (6) and Section 1215.004 only after an appropriately authorized representative of the plan sponsor makes to the health insurance issuer a certification substantially similar to the following certification:
"I hereby certify that the plan documents comply with the requirements of 45 C.F.R. Section 164.504(f)(2) and that the plan sponsor will safeguard and limit the use and disclosure of protected health information that the plan sponsor may receive from the group health plan to perform the plan administration functions."
(f) A plan sponsor that does not provide the certification required by Subsection (e) is not entitled to receive the protected health information described by Subsections (c)(5) and (6) and Section 1215.004, but is entitled to receive a report of claim information that includes the information described by Subsections (c)(1)-(4).
(g) In the case of a request made under Subsection (a) after the date of termination of coverage, the report must contain all information available to the health insurance issuer as of the date of the report that is responsive to the request, including protected health information, and including the information described by Subsections (c)(1)-(6), for the period described by Subsection (c) preceding the date of termination of coverage or for the entire policy period, whichever period is shorter. Notwithstanding this subsection, the report may not include the protected health information described by Subsections (c)(5) and (6) unless a certification has been provided in accordance with Subsection (e).
(h) A plan, plan sponsor, or plan administrator must request a report under Subsection (a) before or on the second anniversary of the date of termination of coverage under a group health plan issued by the health benefit plan issuer.
Added by Acts 2007, 80th Leg., R.S., Ch. 700 (H.B. 2015), Sec. 1, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 700 (H.B. 2015), Sec. 1, eff. September 1, 2007
This Purchasing Value Network guide provides four steps employers can take to improve the value of primary care. Primary care is central to employer efforts to lower health spending, enhance patient experience, and improve health outcomes. Click link to learn more: Promoting High Value Primary Care: An Action Guide for Employers
Health literacy is the single strongest determinant of health status, life expectancy and medical costs. Investing in the promotion of health literacy is a proven way to decrease unnecessary medical expenses, especially ER visits. Click link to learn more: Health Literacy Linked to Unnecessary Medical Episodes of Care
Employee healthcare costs are rising, fueled in-part by increasing deductibles. Employees may lack the health literacy skills needed to make the best choices when selecting and using their benefits. HDHPs can discourage needed medical services. Click link for more information: High Deductible Health Plans Resulting in Poorer Health & Higher Costs
Bundled payments reduce costs and help improve outcomes. Episodic bundles cover the cost of care from start to finish—all the procedures, devices, tests, drugs and services a patient will need for, say, a knee replacement or back surgery.
Jonathan R. Slotkin, MD Olivia A. Ross, M. Ruth Coleman, Jaewon Ryu, MD
Bundled payments in health care have gained favor because they can reduce costs and help improve outcomes. In essence, episodic bundles cover the cost of a patient’s care from start to finish—all the procedures, devices, tests, drugs and services a patient will need for, say, a knee replacement or back surgery.
While Medicare has led the development of bundles in the U.S., large employers are now directly purchasing bundled care for their employees through selected providers. It is little surprise that direct employer-purchasing of bundled care is a burgeoning area of healthcare payment innovation. Purchasers of healthcare services encounter widely disparate charges across different healthcare delivery systems for equivalent surgical procedures, varying by up to 40%. Boeing and General Electric have been among the leaders in adopting bundles, in part to address these disparities. Other companies including Lowe’s, Walmart, McKesson and JetBlue Airways have recently partnered with the Pacific Business Group on Health (PBGH) and Health Design Plus (HDP) to launch the Employers Centers of Excellence Network (ECEN) which helps employers identify quality providers and negotiate bundled payments. PBGH is a non-profit, employer-led organization that represents public and employer healthcare purchasers, including numerous Fortune 100 companies. HDP is a third-party administrator with expertise in the development and management of travel surgery programs, providing strategic and operational management of this program.
ECEN began first with total joint replacement, then added spinal surgery, and recently has begun providing bariatric (weight loss) surgery at selected centers. ECEN provides employees of participating companies with 100% coverage for all travel and medical expenses at carefully selected healthcare systems; patients pay no out-of-pocket costs. Participating employers benefit from the quality assurance of the ECEN’s rigorous center selection process and the financial savings from paying competitive, pre-set rates for bundled care negotiated between participating hospitals and HDP.
Geisinger Health System began partnering with Walmart around cardiac surgery in 2012, and joined ECEN for spinal surgery in 2015. Three key questions employers and providers commonly ask about arrangements like these are: “What is the process to be selected as a site?” “What does a healthcare system look like that earns one of these contracts?” and “Does the program actually lead to improved value care delivery?”
What is the process to be selected as a site?
Hospitals and individual participating physicians undergo a thorough and iterative evaluation process. Fewer than 5% of healthcare systems initially identified for participation in ECEN meet all of the quality requirements for consideration. An invitation-only request for information from ECEN leads to an extensive review of the system’s quality, outcomes, and patient satisfaction data.
After an assessment phone call that includes PBGH, HDP, as well as physicians and administrators from the health system under consideration, an extensive request for proposal is sent for completion. Candidate centers must provide information including detailed clinical protocols, surgical-patient selection criteria, clinical registry participation (more on that below), information on multidisciplinary shared decision-making, as well as institutional and physician-level performance metrics. These metrics include length of stay, return to surgery, infection rates, and procedure-specific outcomes such as joint dislocation after hip replacement and nerve covering tears occurring during spinal surgery.
For centers remaining in consideration after these initial steps, PBGH and HDP perform an in-depth site visit utilizing a patient tracer methodology. The patient experience is reviewed from arrival at the airport, throughout the care cycle, and to departing for home. A successful visit moves the process along to negotiation and contracting.
Negotiated prospective bundled rates cover all services rendered during the episode of care including facility fees, professional fees, ancillary care, implants, and durable medical equipment; the bundles created significantly exceed the services typically included in standard fee for service (FFS) care for the same procedures. These charges usually average 10% to 15% less than what would traditionally be paid in standard fee-for-service arrangements. HDP and the hospital systems negotiate the final terms of the contract, including provisions for outlier situations (such as catastrophic or unrelated complications), and ad hoc additional services occasionally needed (such as pain injections or nerve testing studies).
Why would a health system want to enter into a relationship that potentially decreases profits relative to the system’s similar activities? This reservation has been a significant reason some hospitals have disengaged discussions with ECEN, while certain other systems presented unaccepted pricing 100% to 200% higher than that seen at other equally qualified institutions. Even though total reimbursement is likely lower than FFS models would pay, the potential customer base is huge given the national geographic draw of this travel medicine program. Moreover, participating health care systems, including Geisinger, have found that the care delivery reengineering needed to earn and maintain this type of payment model has led to improved processes and efficiencies beyond the program. For example, the ECEN spine program requires that all patients be evaluated by pain psychology, internal medicine, physiatry, and spinal surgery providers; At Geisinger, this “idealized” care — which is not routine for patients at any hospital — has become the aspirational model for the creation of the system’s integrated practice units.
What does a healthcare system look like that earns one of these contracts?
In 2012 when Geisinger Health System was finalizing a destination-care agreement for cardiac surgery, the leadership team determined that we were not ready to pursue similar initiatives in spinal surgery; the necessary care-delivery systems were not yet sufficiently in place in that clinical area. Why was cardiac surgery ready and spinal surgery not? In 2006 Geisinger embarked on a broad care delivery reengineering initiative around cardiac surgery called ProvenCare. This process-improvement methodology includes workflow redesign, error proofing, best-practice implementation, cost bundling, financial risk sharing, and outcomes measurement. The elements of ProvenCare bear a notable resemblance to current payment innovations such as certain Medicare bundles and employer-purchased bundles. Implementing and expanding these prescient efforts created routine operational processes and a contagious mindset: that quality improvement is part of everyday work, and that we keep score.
In late 2012 Geisinger initiated ProvenCare Lumbar Spine. This work, which spanned most of a year, engaged all parties to agree on best practices and to minimize unwarranted variation in care delivery. The electronic health record was used to “hardwire” the agreed-upon elements through the consistent use of checklists, forcing functions, and dashboards to follow system and individual provider performance. The very act of providers agreeing on best practices itself brought significant value in improving our care and creating a shared vision. Striving to measure our outcomes on every patient was a critical component.
Having systems to measure specialty-specific patient reported outcomes (PROs) provided an important element that made Geisinger and other systems attractive partners for employer-purchasers. Nearly all modern hospitals retrospectively follow general quality measures such as length of stay, infection rate, return to surgery, and readmission. But these passive measures are not the outcomes that really matter to patients such as their ability to return to work and play and whether the surgery achieved the patient’s goal.
Specialty-specific registries are not a new concept (the Society of Thoracic Surgeons National Database was formed in 1989) but some medical specialties have been slow to adopt this approach, and many healthcare institutions do not have the necessary infrastructure or human capital to participate. We have found that participation in neurosurgery’s prospective clinical registry, the Quality Outcomes Database (QOD), mobilizes our providers and creates a culture where we continuously examine how our activities will impact our patients’ outcomes. Registry participation is labor intensive and worth it.
Support from the highest levels of an organization’s leadership provides “air cover” for building the necessary systems and cultural change necessary for this high-touch style of care. One hospital’s contracting team believed it could not improve upon its offer of bundled rate charges 50% higher than those seen at already participating centers. Six months later the system’s CEO approached ECEN to reopen discussions matching the other centers’ pricing — only to find that the hospital could no longer be accommodated. Administrative leaders experienced with their hospital’s operational network are needed when the necessary new care pathways and processes are disruptive. Business development, contracting, and finance personnel are also required. Dedicated nurse navigators and program coordinators greatly assist with the logistical complexity encountered and the concierge-type approach needed for destination care. Frequent thank you letters from satisfied patients in this program often highlight the importance of our nurse and program coordinator.
Does the program actually lead to improved value care delivery?
Programs of this type are not worth the investment if they do not increase value for patients, purchasers, and hospitals by improving patient outcomes and satisfaction and decreasing costs. Since 2014, 5,355 people have inquired about participating with the ECEN program, and 3,450 were referred to a center for clinical evaluation. 1,700 patients have undergone joint replacement surgery. While nearly all of the 450 spine patients who presented to one of the participating centers had been recommended for surgery by providers in their home markets, only 62% of the patients were found to be suitable candidates for surgery by the COE sites. Instead of unnecessary surgery, activity-based therapies, pain injections, physical therapy, or weight loss were recommended by our providers. 16% of patients recommended for total joint replacement by a home provider were recommended not to have surgery by COE centers. Avoiding unnecessary surgery is a significant driver of the program’s long-term benefits.
The program has led to lower patient out-of-pocket costs and excellent patient satisfaction scores. The average Lowe’s associate who has joint replacement surgery performed by one of the ECEN centers personally saves approximately $3,300 in copayments and other fees as compared to those patients who get the same care under traditional insurance. In an analysis of 12 month’s experience, 100% of Lowe’s ECEN joint surgery patients reported that they would refer co-workers or family to the program for a similar surgery. Data from The Boeing Company’s experience has shown similarly high employee satisfaction.
Twelve-months claims data comparing Lowe’s associates who have surgery with local providers under traditional insurance as compared to those who have surgery as part of ECEN demonstrated striking findings. 9.1% of patients having joint surgery with local providers needed discharge to a skilled nursing facility after surgery, compared to 0% of those getting care with ECEN. 5.9 % of those having lumbar spine surgery with local providers needed skilled nursing care after surgery, while 0% of ECEN patients needed that care. In addition, standard health plan participants had a 6.6% chance of being readmitted to the hospital within 30 days after joint surgery as compared to just 0.4% of ECEN patients. Savings from avoiding unnecessary surgery alone was estimated at $1.3 million. For the highest volume spine procedures, 52% of patients recommended for surgery by home providers are found by our COE providers to not be appropriate surgical candidates. More than 90% of those patients heed that recommendation and do not go on to have surgery at home through traditional insurance. Early estimates around the newer ECEN spine program have indicated savings of an additional $1 million to $2 million per year.
Employer purchased bundled payment innovations continue to expand. Prepared healthcare systems are pursuing these relationships, while others caught behind feel trepidation. Rigorous system- and physician-specific vetting, common care protocols, and strictly enforced treatment appropriateness criteria mitigate concerns that bundled payments do not prevent unnecessary care and can in fact incentivize providers to perform more episodes of care. Current areas of development include the need for creative solutions for patients who are not recommended to have surgery (“If I recommend weight loss, mindfulness meditation, and Tai Chi to a patient who has limited resources back home, was the program really a success?”). Health Transformation Alliance is developing a scaled concept of delivering bundled, high-quality care in the metropolitan areas where patients live, while attempting to underpin the effort with robust analytics. There is a growing need for healthcare delivery systems prepared to participate in these initiatives. Given the value to patients, providers, and care purchasers, systems would be well served to recognize the value of capitalizing on these opportunities.
We are grateful to Eric Foster of Lowe’s Companies, Inc. for valuable support and data for this article.
Jonathan R. Slotkin, MD, is director of spinal surgery in the neurosciences institute and medical director of Geisinger in Motion at Geisinger Health System. He is co-chair of Health Transformation Alliance’s expert clinical advisory committee for back pain.
Olivia A. Ross is the associate director of the Employers Centers of Excellence Network at the Pacific Business Group on Health.
M. Ruth Coleman, BSN, is the founder and chief executive officer of Health Design Plus.
Jaewon Ryu, MD, is executive vice president and chief medical officer of Geisinger Health System.
Mr. Buffet recently presented the case for why CEOs are incorrectly distracted by corporate taxes which have been 2-4% of GDP for 50 years. Over the same period healthcare costs, an indirect tax to employers, has risen from 5%-17% of GDP. Click link to learn more: Warren Buffet to CEOs, “Forget Taxes, Focus on the Big Issue, Healthcare Cost”