While value-based COE programs are an increasingly attractive solution, their ability to drive down cost is now matched with detailed analytics of health care performance and financial data.
COVID-19 woke up Americans to the tightrope of health care – a dangerous and unknown virus pushing our very health care infrastructure to its outer limits amid decades of surging costs. Despite the struggles of the now fast-fading pandemic, trends and technology advancements underway years earlier are poised to be solutions that will drive transformation in the post-COVID era of health care in the U.S. The unsustainable rising cost of care has been driving innovation for decades— many new advancements have matured, evolved, and are ready to scale.
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McKinsey finds, over several years leading up to the pandemic, billions of dollars in funding were invested in patient engagement, data and analytics, and new care models in health care in the U.S. This is not a coincidence. A late 2020 report from Kaiser Family Foundation found that premiums and deductibles have increased much faster than wages; a 111% increase in the burden of deductibles across all covered workers and a 55% increase in premiums for employers. A significant amount of investment has made its way into new solutions for employers to manage the burden.
Old solutions are taking on new life in the form of new platforms with the help of advancing analytics. Value-based care is one of those pivotal models, and it could not come soon enough to decrease employer costs while offering care. A study from the National Alliance of Healthcare Purchaser Coalitions shows more than 6 in 10 employers are already using or considering value-based design approaches.
Centers of Excellence drive value
Value-based models are most efficient and effective when Centers of Excellence (COE) are paired with a tech platform. While COEs have been in existence for a couple of decades, today, results can be measured, benchmarked, and aligned with advanced analytics. Beyond negotiated care for low-volume, high-cost procedures, COEs are now designed for the needs of an employer population and with specific providers who are selected to perform specialized services because of their diagnostic expertise, use of appropriate care, outcomes, and favorable financial arrangements.
COEs are one strategy for steering employees to health care providers who practice at the highest levels of quality, while ensuring a predictable price. Perhaps, most importantly, specialized care also has a preventive component and can help thwart high-risk, high-cost conditions through early interventions.
Employers, faced with skyrocketing costs, are poised to double down on COEs to drive delivery reform—through employee incentives, bundled payments, and tightening of their network—as a way to promote quality care in specific specialties. In all, 81% of large employers will have at least one condition-targeted COE in place by 2021.
While value-based COE programs are an increasingly attractive solution, their ability to drive down cost is now matched with detailed analytics of health care performance and financial data, including actuarial-driven benchmarks paired with experience-driven insights from experts. The goal is to create a comprehensive and holistic view of all financial, clinical, and operational opportunities and effectively create predefined and custom workflows to drive improvements.
Analytics-driven COE solution as a platform
One example is a Fortune 50 company with a brick-and-mortar footprint in the continental USA, who sought to create a new model to contain costs and increase the quality of care for employees by connecting them with the best providers in a targeted geographic region. The company partnered with a high-performance cardiovascular specialty network, and with Cedar Gate Technologies, to create a cardiovascular COE program. When employees visit a network physician at specific COE locations, the company pays 100% of all patient co-pays, deductibles, and coinsurance, which means there are no out-of-pocket expenses for plan participants.
The bundled program covers everything from patient outreach, navigation, education, and outpatient screenings to complex surgeries. Since the COE program is a prospective bundled payment program, the bundled prices are transparent to the company and provide predictability and savings relative to traditional benefit plans. The structure provides for shared financial risk among all participating physicians. Therefore, it incentivizes network physicians to cooperate in controlling costs and improving quality by managing the provision of their services.
To administer the COE program, Cedar Gate operates the model using its value-based claims adjudication system, iClaims. iClaims automatically converts fee-for-service claims into a single, bundled claim, receives the lump sum payment from the company, auto-adjudicates and pays all the providers based on agreed-upon contractual payments and timelines, and facilitates control of the shared risk pool among care providers. The platform then drives the lifecycle by directly addressing the data, systems, and processes necessary to enable provider organizations, employer groups and payers to share risk under prospective, bundled payment arrangements.
In this COE model, physicians manage their patients relying on extensive experience in their field of practice to determine optimal clinical care. Claims administration, patient navigation and quality improvement are included as part of the packaged offering, making it attractive from an administrative, as well as a clinical, standpoint. Preventive and educational components round out the organization's bundled services to affect those lifestyle changes that have proven conducive to long-term cardiovascular health.
The results speak to the value inherent to precision COEs:
- Spend-per patient for cardiac care is more than 25% lower than traditional health plan spend within its market
- Hospital utilization is three times less within the COE compared to traditional unmanaged health plan utilization within the marketplace
- More than 95% of services are performed in the office and outpatient settings
- Between 2017 and 2019, less than 2% of COE enrolled members were admitted for inpatient hospital procedures/care
- Outcome measures of zero readmissions within 90 days and zero mortality
- Cost avoidance across the care continuum of near $12M in the last three years
No more guesswork or burdensome processes
New comprehensive analytic platforms are a way to track, measure and drive down costs. Couple analytics with proactive care management and care coordination through the COE model and all payers benefit, while providers also get a surge of financial stability. Through a comprehensive value-based approach, with an advanced platform, the benefit of COEs is not limited to the largest employers.
Through a platform, mid-market companies struggling with the rise of health care costs can administer, track, and deliver to their employee populations and decrease costs to gain predictability. As the U.S. transitions post-COVID, amid years of surging health care costs for employers, value-based COE models are paying off at scale.
David B. Snow Jr. is chairman & chief executive officer of Cedar Gate Technologies.
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