Healthcare issues remain a challenge

Shawn West, MD, Chief Executive Officer

To do the same thing over and over again and expect a different result is one definition of insanity. Yet, this is what many employers end up doing in association with managing their employee benefits health program, not because they want to or like to - because there have been limited options to change the healthcare program and make meaningful improvements. 

Employers expect healthcare costs to increase by another 5-6% in 2021.¹ With changes to their employee benefits program, employers believe they can save less than 1% by implementing plan design changes. Plan design changes can include but are not limited to: 

• bolting on vendor solutions
• increasing deductibles and out-of-pocket costs
• moving to self-funding

But as many employers have experienced, these modifications are not enough to drive down healthcare costs and increase the quality of care received. It just leads to going through the same process again next year. Some employers are ready for a more significant change; the status quo is no longer tolerable. As employers help employees navigate COVID-19 vaccinations and prepare for their return to the office, three of the top five healthcare priorities for 2021² are to also:

1. build a focused strategy moderating high-cost claims 
2. offer care through centers of excellence for additional conditions
3. adopt networks of high-performance health care providers

How can employers continue to improve their benefit programs, address the top priorities, and still find a partner to help address COVID-19 challenges? 

The standard process of bolting on vendor solutions is not working to achieve the desired outcomes. It's time to do something different and achieve a different result. A clinically integrated network (CIN) is a proven way to effectively manage high-cost claims, offer care through an integrated network of quality hospitals and providers known for their excellence, and reward providers for their high-performance and patient outcomes. The differences between a clinically integrated network versus the status quo are a direct employer-provider relationship, increased coordination with less fragmentation, and the sweet spot between an HMO and PPO.

Direct employer-provider relationship

People are the top business expense, accounting for as much as 70% of the total business cost.³ With such a valuable and large expense, employers must be frustrated with the current employee benefits healthcare program buying experience. They often select from a series of inflexible health plan choices, none of which exactly match what they want or need. CINs offer employers a completely different buying experience where the employer sits at the same table with the providers delivering care. This direct connection guides the development of a customized plan based on the actual needs of the population. The employer can present an issue like emergency room “frequent flyers” directly to the providers and together they come up with an agreed-upon strategy to combat this issue based on evidence-based medicine and employer needs. 

Throughout the plan year, the connection between the employer and provider remains strong with consistent interactions and updates. They can even help provide clinical information in support of global pandemics!

At the end of the plan year, the employer and providers review the success of the plan and possibly benefit from shared savings based on claims. Imagine conversations about healthcare costs where the other party doesn’t just throw up their hands and say, “that’s medical trend.”

Increased coordination, less fragmentation

Unlike vendors who solve for one piece of the pie, further compounding fragmentation in care, clinically integrated networks take a holistic approach. CINs are built on integration - integration of health systems, integration of clinical data, integration of claims data, and an integrated philosophy. Health systems work together with an aligned goal to create a clinically integrated network that shares clinical, claims, and financial data. This collective sharing of predictive, current/real-time, and past data increasing care coordination amongst the providers delivering care and reduces duplicative services to members receiving care. Imagine a world where you walk into an urgent care facility and the providers have your medical history, your recent clinical data that has not been processed through claims, and your demographic information eliminating the need to fill out any forms, bypass any tests recently conducted by your primary care provider, and just take care of the issue at hand. You could be in and out with less stress, less out-of-pocket costs, and a great experience... for an unexpected medical issue. 

The sweet spot between an HMO and PPO

Many employers are looking for better value on the benefits programs which they spend so much on and provide so little employee satisfaction. Yet, employers know that if they cut, trim, limit, change employee health benefits too much, employees may react harshly. Many employees like the flexibility of a PPO - not the cost, and like the cost of an HMO - not the limitations. CINs occupy a place between expensive and less coordinated PPO products and limited choice and directive HMO products. Clinically integrated networks can be offered alongside other plan options giving employees another choice that saves them money and gives them increased flexibility. 

With the adoption of a CIN, it can begin the transformative process of change for employees. Over the decades, healthcare innovation has introduced new ideas based on the evolving needs of the people. The balance of cost and choice has swayed over the years between an HMO product and a PPO product. With CINs, it's not only about offering a product that sits between it is also about instilling behaviors that lead to better health. Some CINs encourage the idea of a medical home - a primary place where the member receives care. Unfortunately, people tend to not think about their health or having a doctor they know and can count on until they are in crisis mode. Then it may be too late. For example, individuals who have an assigned primary care doctor or medical home have benefitted from higher COVID-19 awareness and vaccination rates. The Maryland Primary Care Program conducted data-driven and clinical determinations of patient COVID risk to run an early rollout of immunizations across the 576 sites.⁴ The patients within this network benefitted from this endeavor.

With the pandemic, more people are realizing the importance of self-care and health. Before the pandemic (2019), according to the Bureau of Labor Statistics Americans spent twice as much on transportation ($10,742) than healthcare ($5,193) per year.⁵ This tragic pandemic may propel people to invest more in their health, and employers along with health systems can encourage better health habits, e.g., having a medical home, during this time of transition. 

Clinically integrated networks are a new, innovative, integrated option that can satisfy the employee need for a better healthcare experience and the employer needs to decrease costs and increase quality.

1 - Employers Project Health Plan Costs Will Rise 5.3% for 2021. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employers-project-health-plan-cost-rise-for-2021.aspx 

2 - Employers Project Health Plan Costs Will Rise 5.3% for 2021. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employers-project-health-plan-cost-rise-for-2021.aspx 

3 - The Biggest Cost Of Doing Business: A Closer Look At Labor Costs. Paycor. https://www.paycor.com/resource-center/a-closer-look-at-labor-costs#:~:text=As%20any%20company%20leader%20knows,payroll%20or%20other%20related%20taxes 

4 - Why Primary Care Can Make COVID-19 Vaccine Distribution More Successful. Milbank Memorial Fund. https://www.milbank.org/2020/12/why-primary-care-can-make-covid-19-vaccine-distribution-more-successful/ 

5 - Economic News Release: Consumer Expenditures--2019. U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/cesan.nr0.htm