More employers join push for value-based healthcare

CAL/AAEM News Service at
Tue Oct 25 22:54:16 PDT 2016



October 5, 2016


More employers join push for value-based healthcare



mpaign=financedaily> Modern Healthcare



By Shelby Livingston


More employers are setting up value-based reimbursement and payment
arrangements with health insurers and providers to encourage better employee
health outcomes and reduce costs, survey data released Tuesday show.

This year, 45% of employers are giving employees access to centers of
excellence, or COEs, organizations that have high quality ratings in
specialties such as cardiac or orthopedic services and infertility,
according to the survey data released Tuesday by risk management and
employee benefit consulting firm Willis Towers Watson.

That's up from just 37% of employers in 2015 who provided access to COEs,
the survey of 600 U.S. employers with more than 1,000 employees each showed.
Collectively, the companies employ 12.2 million full-time workers in various

Companies like General Electric Co., Wal-Mart Stores and Lowe's Cos. have
partnered with hospitals to design COE programs as a way to control rising
health benefit costs, which are expected to increase overall 6% in 2017,
according to the National Business Group on Health.

An additional 32% of employers surveyed by Willis Towers Watson said they
plan to provide access to COEs by 2018. Still, few employers give employees
incentives to use the COE, with only 17% reducing employee cost-sharing for
getting medical care at the center. Fifty-four percent of employers said
they may start reducing cost-sharing by 2018, however.

Narrow networks designed to include high-quality doctors with lower costs
for services are also gaining traction. Proponents say these
"high-performance networks" differ from HMO networks of old, which were
typically narrowed by cutting out the most expensive doctors instead of
paying attention to quality ratings. According to the survey, 20% of
employers offer high-performance networks today, up from 11% in 2015, and
39% of those surveyed said they may add high-performance networks in the
next three years. Of those employers that have implemented high-performance
networks, about 50% reduce employee cost sharing for in-network care.

The survey also found that 16% of employers are considering contracting
directly with medical service providers, such as COEs, accountable care
organizations and patient-centered medical homes, for reduced prices on
services. Only 8% do so today, the survey found. According to a survey
released in August by the National Business Group on Health, 4% or fewer of
very large employers surveyed contracted directly with COEs for various
types of medical services. Most accessed the COE through the health plan
rather than contracting directly, Washington-based NBGH said.

While employers are growing more interested in working with providers to
move to value-based care, "the strategies are more common in geographies
where employers have large concentrations of employees or where
cost-efficient providers are available and willing to engage in emerging
reimbursement models," Trevis Parson, chief actuary of health and benefits
at Willis Towers Watson, said in a statement.

Insurance features that direct employees to high-value providers will also
grow in the next few years. Though 11% of employers said they reduce
point-of-care costs for high-value services, 47% may do so by 2018,
according to the survey. Nine percent of employers increase such costs for
commonly overused services, but 41% may do so by 2018. Finally, 31% of
employers say they may require employees to pay a higher cost for certain
medical procedures if they don't first get a second opinion, though only 4%
do so this year.




Jeff Wells
Deputy Editor, CAL/AAEM News Service


Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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