May 16, 2017

Can Employer-Provider Partnerships Work to Reduce Costs and Improve Care?

Artemis Health
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Artemis Insight

Can Employer-Provider Partnerships Work to Reduce Costs and Improve Care?

It seems like just about everyone has an idea for reducing the cost of healthcare in the U.S. - hospital groups, advocacy organizations, tech startups like Artemis Health, and employers large and small.

One such idea that’s gaining traction? Directly negotiating in-network services between health systems and employers, also known as “employer-provider partnerships.”

Artemis Health interviewed Keith Gee, retired Senior Vice President of Strategy for a large health system and hospital group in the mid-Atlantic to explore this topic. His former employer is a provider network serving 2 million people in the region and employing approximately 15,000 healthcare professionals.

Providers like Gee are worried about the steady rise of healthcare costs, and they’re concerned that political efforts are ineffective in solving the problem. “I would make the bet that 5-7 years from now, the current healthcare system will reach a point where it starts to collapse. That’s what employers today should be bracing themselves for - the day when healthcare costs have gotten so high that no employer can afford to provide their employees with insurance.”

Gee advocates cooperation inside the industry as one step toward controlling costs. He began designing these partnerships and marketing to employers in the 1990s, and he’s a proponent of their power to increase transparency and reduce costs. They essentially cut out the middleman of health insurance carriers to allow employees to seek care anywhere within a given provider system.

There are a number of services that health systems provide as part of their partnership efforts with employers:

  • Awareness programs
  • Data analytics and information sharing
  • Employee health assessments
  • Behavioral health and employee assistance programming
  • Benefit plan redesign
  • Pharmacy benefit management
  • Wellness programs and patient education
  • Incentive programs
  • Case management and inpatient care management
  • Telemedicine and nurse call lines
  • Ancillary management (labs and imaging overuse)
  • Joint purchasing negotiations for better margins

Let’s look at a few of these to see how they work.

One big cost driver for both providers and employers is pharmaceuticals. On the provider side, health systems are investing in pharmacy data and research, and making recommendations for benefits to employers. Gee explains: 

“Our group was researching and testing new drugs, sharing expertise with employers about chronic disease management, and tracking employee Rx data. We’d make sure they’re on the right drugs, recommend cheaper drugs they could take with the same outcomes, and more.”

This transparency stands in stark contrast to most employer/pharmacy benefit manager relationships, likely because lower costs and patient outcomes are priorities for both hospital groups and employers.

Additionally, Gee tells of an interesting insight gained from their Rx data analytics - they found that just one physician in their system was responsible for an unproportional number of incorrect or misprescribed drugs. This doctor was getting kickbacks from pharmaceutical companies at a high cost to both the hospital system and employers. This led to an easy fix for the hospital (dismissing the physician) and cost savings for their employer partners.

Gee also oversaw the launch of a 24/7 Nurse Call Line for employees in their network. “We found it reduced ED [emergency department] visits and encouraged self-care instead of unnecessary doctor’s visits. The nurse can direct them to the right urgent care and give them the wait time. He or she could even redirect them to an alternative primary care doctor if theirs is unavailable for a week or so.”

Gee is an eager advocate for the health system’s Employee Assistance Program, too. “This program, more than any other, linked us to the employer community.” Employees were offered three free visits with counselors, and if their issue was not resolved, they’d move into the hospital’s behavioral health system. Employers were surprised and pleased at how many of their employees could resolve EAP problems in three visits, saving costs and enabling a more productive workforce.

Benefits for both employers and hospitals abound: better, more complete data, transparency for patients, improved customer service, knowledge sharing and cost control. Gee says:

“Employers were willing to give up time to sit on our board and help us solve problems and learn our side of the business...They tell personal stories of employees and what they face going through our system, and it gave us great motivation to improve our services for patients.”

There are challenges to making these partnerships productive, too. Gee notes, “Employers and providers have been on the opposite side of the cost issue for years. There’s this animosity that’s been built up. The first thing we have to do is break those walls down, and it can only come from bringing employers and providers together in talking.”

Providers are now feeling the effects of high cost services, and their priorities are changing. Gee recommends a few ways to start the conversations:

  • Get doctors involved in the partnership efforts and incentivize them to participate
  • Reduce red tape and paperwork on the provider side to move closer to the speed of business
  • Providers should “re-tool” and streamline processes to be employer-friendly (i.e. reporting on cost savings, not just patient outcomes)
  • Use data to make the case to employers
  • Facilitate cooperation among employers to bring multiple companies into the health system

One common theme to our interview with Gee? Patient satisfaction. Which is also what employers want for their member. This common goal helps overcome some of the hurdles in employer-provider partnerships and puts them on track to solving the healthcare cost crisis together.

This is just one slice of the myriad ideas out there for reducing healthcare costs, with or without Washington. Innovative companies like Artemis Health are tackling the hidden waste in employers’ benefits spending. Large corporations are forming thought leadership groups to share insights and roll out solutions. Wellness vendors are focusing on keeping employees healthy and changing behaviors. Hospitals are tracking patients and reducing wasteful procedures. And patients are negotiating, saving in HSAs for medical costs, and educating themselves about their own benefits. We’ll dive into these trends and more aspects of employer-provider partnerships on the Artemis blog in the future.

As we move into a new era of healthcare policy, it’s clear we can’t rely on politicians to fix this industry from the outside in. All meaningful change comes from within, and we believe it will be no different with healthcare spending.

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