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Survey Report

Chapter 4 — Health care delivery: Encouraging use of value-based health services

2018 Best Practices in Health Care Employer Survey

Global Benefits Management|Health and Benefits
N/A

January 3, 2019

Find out how U.S. employers are managing health care costs and addressing employee wellbeing to achieve a healthy, high-performing workforce.

U.S. health care total costs are largely reflective of high unit prices, and there is often little relationship between unit price and quality. Employers are seeking to steer their members to high-value providers that are able to provide high quality and service at lower costs. This also provides a market signal to high-cost providers that they should evaluate opportunities to increase their cost effectiveness.

Where employees receive care can have a dramatic impact on costs, so employers are encouraging participants to use value-based services such as:

  • Telemedicine
  • Centers of excellence
  • Expert medical opinion programs
  • High-performance networks

Telemedicine has seen the highest rate of adoption, as 86% of employers offer it with another 10% considering it by 2020 (Figure 12). Employers are encouraging the use of telemedicine through communications (90%) and incentives (43%) like reduced point of care cost. Meanwhile, more than half of employers (54%) offer telebehavioral health services and another 29% are considering adding it by 2020. Nonetheless, member use of telemedicine continues to lag behind expectations, and employers are working to increase employee use of this benefit.

Figure 12. Network and provider strategies

Bar graphs: Network and provider strategies

Sample: Based on respondents with at least 1,000 employees

Nearly half (48%) use COEs, with another 27% considering it by 2020. Currently, most work with their health plan in establishing a COE, but 6% of employers use a carve-out provider for COEs, which is set to more than triple in two years to 22%. Furthermore, employers are either making COEs mandatory (23%) or offering incentives (22%) for use with a smaller number (9%) issuing penalties like increased point-of-care costs when not used (Figure 13).

Expert medical opinion programs are growing in popularity with employers as a means to improve care, enhance the member experience and drive better results. Just under a quarter of employers offer the service, and its adoption is expected to double in two years. Employers offering such a service provide ongoing communications to employees and, when done most effectively, build out integration of the service into health plan and other program points of contact.

Employers are seeking to steer their members to high-value providers that are able to provide high quality and service at lower costs.

Figure 13. The majority of employers provide ongoing communication to promote the use of preferred providers

Bar graphs: The majority of employers provide ongoing communication to promote the use of preferred providers

Sample: Based on respondents with at least 1,000 employees

Similarly, employers expect their use of HPNs, a nar network of higher-quality and lower-cost providers, to grow significantly along with reducing employee cost sharing for use of an HPN. These local network solutions can take many forms but are usually narer sets of providers curated based on quality and cost efficiency. Most health plans have a set of offerings, as do a growing number of third parties. Only 16% offer HPNs today, a number that could grow to over 50% by 2020. Currently 10% of employers reduce premiums for use of HPNs, but that could more than triple by 2020 (34%) (Figure 12). Out of employers that currently use HPNs, 41% reduce point-of-care costs for using HPNs; 24% make using HPNs mandatory, and 8% increase point-of-care costs for not using HPNs (Figure 13).

Network solutions continue to evolve as employers seek out greater value. Health plans are developing new models for employers in a growing number of locations. Another emerging network solution is direct contracting between an employer and a health care system or targeted set of health care providers in key markets. Today, 7% of employers report using direct contracting, but prevalence could triple by 2020 (Figure 12). The supply and demand for these arrangements is expected to g, along with expectations for improved outcomes, efficiency and member experience.

Percentages of offering an expert medical opinion program

Best practices: Health care delivery

  • Optimize strategies to include both national and local delivery solutions.
  • Provide and encourage broad-based telemedicine and telebehavioral services.
  • Encourage participants to use value-based services, such as expert medical opinion programs, through incentives and communications.
  • Use local or regional COEs for high-use and high-cost-variability services or procedures.
  • Offer HPNs in locations where experience and population characteristics support it.

Market disruption: Employers look for efficiencies from industry consolidation

With both large and small industry players engaging in horizontal and vertical mergers, employers are concerned about industry consolidation. They are most worried about the mergers that are not making the national news — those between hospital systems and physician practices. Almost 50% of employers (both large and small) believe these deals will raise costs. However, large and small employers differ on the opinion of whether such deals will improve care. Almost half (46%) of large employers believe such mergers will improve care, but only 30% of small employers believe care will improve.

Large and small employers also have a difference in opinion on the results of the pending mega deals between pharmacy benefit managers and insurers that received media attention and greater scrutiny from regulators. While both employer groups share similar views on cost, large employers are less worried about a reduction in quality post-merger (11%) versus small employers at 30% (Figure 14).

Figure 14. Employers are evaluating the impact of health care market changes: Consolidation and new entrants

Bar graphs: Employers are evaluating the impact of health care market changes: Consolidation and new entrants

Sample: Based on respondents with at least 1,000 employees

Chapter 4 — Health care delivery: Encouraging use of value-based health services
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