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Strategies for Employer Value Based Health Purchasing

Strategies for Employer Value Based Health Purchasing

Nov. 22, 2022
The fastest-growing delivery system approach for large employers in 2023 is steering patients to high-performing Centers of Excellence.

With healthcare enrollment currently underway at most companies, looking into cost-effective ways to provide healthcare benefits in the future makes sense.

A recent article from the Business Group on Health offers some strategies for valued based purchasing.  Noting that “ progress over the last 10 years to deploy effective value-based payment models has been uneven across the US,”  it does acknowledge that there have been successful partnerships among employers, providers, health plans and other companies to advance value-based purchasing arrangements to pave the way for improvement.

Here are some ideas to move this strategy forward:

Provider groups must embrace value-based delivery models or expect employers to increasingly partner with health care organizations that are innovating in value-based care.

According to the Business Group’s 2023 Annual Large Employer Survey, adoption of virtual and on-site primary care are the fastest-growing employer strategies for steering employees to advanced primary care. These approaches afford employers more influence over how care is directed in primary care and how it is referred downstream for specialty services. Likewise, steering patients to high-performing Centers of Excellence is the fastest-growing delivery system approach for large employers in 2023 and beyond, benefiting providers taking on value-based reimbursement for quality outcomes.

Consultants, brokers and other organizations that advise employers must move to assessments of value on total cost of care rather than fee-for-service network discounts.

When employers are making decisions on which vendors to partner with and networks to select, they need to have total cost of care (TCOC), paired with quality data, to pick the best approach. Unfortunately, they often do not have this information available. Moving to measurements of total cost of care and incorporating quality into assessments is difficult, but a worthwhile endeavor. Health plans, providers, consultants and other partners should make data available to perform TCOC measurements and make decisions based on them.

Where value-based care is successfully controlling costs and improving health outcomes, employers should reduce cost sharing for members using those providers.

When providers are willing to take on financial risk and are succeeding in delivering high-quality care, employers should explore opportunities to reduce out-of-pocket costs for members receiving care from those providers. The Business Group’s annual survey details many ways in which employers are paying for travel and accommodation, as well as reducing cost sharing for and improving access to several high-value sites of care and services, including COEs, advanced primary care and mental health treatment.

Several payment and delivery reform partnerships have increased value for years, including:

Provider groups must embrace value-based delivery models or expect employers to increasingly partner with health care organizations that are innovating in value-based care.

According to the Business Group’s 2023 Annual Large Employer Survey, adoption of virtual and on-site primary care are the fastest growing employer strategies for steering employees to advanced primary care. These approaches afford employers more influence over how care is directed in primary care and how it is referred downstream for specialty services. Likewise, steering patients to high-performing Centers of Excellence (COEs) is the fastest growing delivery system approach for large employers in 2023 and beyond, benefiting providers taking on value-based reimbursement for quality outcomes.

Note: See further strategies.

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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