By: John Sunde, VP, Payor Partnerships at SoNE HEALTH, and Laurel Pickering, MPH, Director, Strategic Growth Development at Centivo
Employers are once again grappling with the high price of healthcare, reeling from rising renewals that have no reflection on the quality of their employees’ care. And whether companies shift costs to employees or take on more of the increases, everyone is affected through lower wages, fewer salary increases and less cash to invest in the business.
Even in this broken system, it may seem like effecting change is difficult, especially when some parties in this scenario are reaping its lopsided rewards. There is an opportunity, however, for employers – the bearer of the purse strings – to demand better. And that starts by getting closer to the provider.
The power behind collaboration
Employers and health systems can work together to tackle a number of benefits plan challenges, especially the high cost of care. Proactive strategies built around strong alliances can help:
- Employers eliminate the middleman, negotiate better per-unit costs with quality providers and hold providers accountable for improved health outcomes and quality of care
- Patients get easier access to comprehensive health services within a coordinated system and the health benefits of seamless, coordinated care
- The healthcare system reduce fragmented, redundant care to lower costs and improve outcomes
Where do health plans fit in?
An employer-provider arrangement (like direct contracting, where self-funded employers and other health care purchasers buy healthcare services directly from a provider or group, facility or integrated health system) doesn’t eliminate the need for a health plan. Therefore, employers would benefit from working with a health plan that has experience supporting these collaborative initiatives and facilitating engagement with the right network of providers.
When engaging in a more direct employer-provider arrangement, it helps for the health plan to have a shared vision and the willingness and flexibility to innovate (which can be a tall request for traditional carriers). In Connecticut, SoNE HEALTH, a leader in providing value-based care, works closely with these like-minded health plans (for instance, Centivo) to bring local employers together with value-based providers. Incentivizing the right care at the right time, in the right setting, with prevention at the core, can deliver significant savings and improved quality of care.
The benefits of collaboration
By prioritizing quality and working with providers that are focused on population health and the primacy of primary care, Centivo has been able to:
- Facilitate direct conversations between employers and providers
- Save employers as much as 30 percent or more compared to traditional U.S. carriers, with the majority of members paying less than $25 per month in out-of-pocket expenses
- Increase engagement with primary care doctors (30% above benchmark) while reducing unnecessary ER visits (15% below benchmark) and inpatient admits (13% below benchmark)
- Negotiate favorable unit cost savings, typically well below many local and national carriers, thanks to aligned incentives
- Improve end-to-end transparency, from claims data to pharmacy insights
To explore what this looks like in practice, take one of Centivo’s Connecticut clients, a regional grocery chain with a history of benefits innovation. When the grocer found it was approaching a four-year 30% increase in medical/Rx costs per employee, they knew they had to explore other options. Looking for a forward-thinking partner to deliver an affordable plan with access to high-quality care, they came to Centivo with goals for their employees’ health and peace of mind.
Ensuring high-quality care with their employees’ trusted providers was paramount. This is where SoNE HEALTH played a significant role.
The result? Year over year, the grocery chain employees enrolled in Centivo’s flagship Partnership Plan paid an average 75% less in out-of-pocket costs compared to other employer plan choices. And 30% spent nothing ($0) out of pocket for healthcare services in the last plan year. It was a win for the company as well, who enjoyed an 18% overall claims cost savings compared to the prior year.
Don’t go it alone
Employers working directly with providers have a valuable opportunity to improve quality, reduce costs and improve the overall patient experience. And they don’t have to go it alone – health plans can be a critical partner in facilitating these promising arrangements.