Exploring Strategies to Reduce Cost & Improve Healthcare Quality
By Tricia Godin, Brown & Brown of Detroit Employee Benefits Advisor
Improving the quality of care is one of the most desirable and efficient ways to lower healthcare spending. Delivering the right care at the right time, in the best setting, reduces waste and improves outcomes. Two provider models gaining in popularity are Centers of Excellence and Affordable Care Organizations.
Centers of Excellence are becoming more prevalent and many large employers are seeking out providers who have developed COEs. These types of organizations are seen as the most preferred place of care for a specific condition because they provide more efficient and effective treatment.
Centers of Excellence work because they are built on a multidisciplinary approach and this is critical to the successful patient outcome. The primary, secondary, and tertiary needs of patients are addressed seamlessly from diagnosis to discharge, through coordinated efforts of medical personnel and facilities.
Providers and Third Party Administrators have developed COEs for an increasing number of areas with high cost and complexity, including cancer, neonatal care, cardiac care, transplants, joint replacements, and spinal surgery. Because COEs perform procedures in high volume, efficiencies are mastered. There are often cost savings to be found due to these specialty centers. Employers gain overall cost savings by utilizing Centers of Excellence.
Accountable Care Organizations, or ACOs, are also growing in popularity with both employers and medical carriers. Employers want to reward providers for value, in areas like patient outcomes, high levels of efficiency, and improvement of overall care.
ACOs are networks of providers that work together to treat patients across different care settings such as doctor’s offices, hospitals, and long term care facilities. This type of organization is characterized by a payment and care delivery model that ties provider reimbursement to quality metrics and reductions in the total cost of care of the patient.
ACOs were originally created as a way to control Medicare costs, and some medical carriers have added them to their plan options, making them available to employer sponsored health plans. Very large employers can also directly contract with providers to form an ACO.
According to the Mercer Survey of Employer-Sponsored Health Plans, 5% of employers give employees incentives to use an ACO. Measuring results is still challenging. Carrier reporting needs to include the expected and actual impact of the ACO on quality, cost, and the patient experience.
As these two models gain traction, we should see more carriers and providers getting in on the action. Higher quality, greater value, and cost control are all part of the end game for employers. For more information on COEs and ACOs, contact Brown & Brown of Detroit at 586.977.6300.