Employers and benefits advisors agree that the health plan industry needs to change. That's one of the clear takeaways from Centivo's late 2022 Employer & Broker Health Plan Trends Survey. The majority of employers surveyed are open to trying new, more sustainable solutions. But where to begin?
Change is possible, but it doesn't start with spending more on a broken system. The cost-shifting and consumer-driven approaches of the past, like raising deductibles or copays, aren't doing anything to help curb overall health care spending, nor is it making employees and their families any healthier. The only thing that can truly evolve long-term health care spending is accessing and consuming health care differently.
Employers are in the health care business
Employers have the obligation – and the power – to challenge the health care status quo, and their brokers can be key allies in this quest. For most companies, health care is the second largest expense after payroll, so taking steps to improve the quality and value of their health plan offering boosts not only the wellbeing of employees, but also the company's bottom line.
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A group of Wisconsin businesses demonstrated the impact possible when employers take the reins. A few years ago, the Business Health Care Group (BHCG), a Wisconsin-based coalition of employers, began a movement to reshape the state's healthcare landscape. They used innovation in health plan design and network construction to help control health care costs, and their 2022 results speak volumes. But even more striking is what's behind those numbers – and what they tell us about the power of employers to impact healthcare costs.
Measuring quality one doctor at a time
The journey began when BHCG, with the priority of purchasing high-value health care, commissioned a study to evaluate the care provided by doctors in the state, with a focus on primary care physician performance. But rather than pulling from large insurers' curated stats, the study used the extremely robust data from Wisconsin's all-payer claims database. The study measured quality based on evidence-based medicine compliance rates, doctor by doctor, not by overall health system or physician practice, and combined that with cost-efficiency analysis. This resulted in a better understanding of which doctors provided care that restored patients' health with the least use of resources.
The game changer was what BHCG and its members did with all that data. With these measurements, they built high-value provider networks, including curation of physician panels within health systems, based on the physician performance data. These networks deliver care through a proprietary primary care-centered BHCG-Centivo health plan.
Essentially, the employers used the health plan as a conduit to a high-value provider community. Working with Centivo, employers engaged with the health care providers in the market to create not only a better approach, but also a continuous improvement process that incorporates the voice of the employer into a conversation previously dominated by big health insurers and health care systems.
Putting primary care at the center
As the Centivo survey revealed, employers (95 percent) and brokers (94 percent) agree primary care plays a decisive role in managing costs and influencing outcomes. Rather than remaining underfunded and underutilized, primary care must be the foundation upon which a high-performance, cost-effective health care system is built.
For Wisconsin, the results are undeniable. Wisconsin employers saw primary care visits go up (+35 percent), emergency room visits go down (-17 percent) and fewer inpatient admits (-8 percent). And all of that added up to substantial savings for both employers and health plan members: an average of 23 percent to 36 percent, including a substantially lower annual out-of-pocket average for employees ($700, compared to the national average of over $1,650).
Why the numbers matter
For employers, a willingness to rethink their health plan is a great start, but bucking a decades-established system can be daunting. For both employers and brokers, the Wisconsin data proves that innovation can reap significant rewards, even in a state with the fourth highest hospital prices in the country.
Employers, and the brokers who serve them, who are ready to take more control of their health benefits can follow Wisconsin's lead and:
- Elevate the employer voice in the local provider community
- Increase investments in primary care
- Build on the fundamental premise that people need to get the right care at the right time in the right place
- Understand the quality and effectiveness of the physicians and facilities in your network – pay for value, not volume
Given the data and the right partners, employers hold the power to influence better care and control healthcare costs. Wisconsin employers showed us it can be done.
Dave Osterndorf is Strategic Consultant for BHCG and Chief Actuary for Centivo.
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