Employer-Led Health System Transformation: How Are We Doing?

To make progress towards a goal as big as “improving the US healthcare system”, you need a plan and you need to get people pulling together. That’s what Mercer’s Vitals for Change framework is all about. We’ve identified four areas – or “Vitals” -- in which employers can take specific actions to improve their own programs that also address underlying problems in the healthcare system.  With enough of us pulling in the same direction, we can change the system for the better, and for everyone.

The Vitals for Change Scorecard, a free online assessment tool developed jointly by Mercer and the nonprofit employer group Catalyst for Payment Reform – helps employers to learn about new approaches and see where they have opportunities to optimize their health programs.  As employers complete the Scorecard, they’re also helping to build a database we can use to chart progress and – with enough responses – to analyze which actions are most correlated with better results.

For now, here’s a look at how the first 71 employers to complete the Scorecard responded to a just a few of the questions for each of the four Vitals for Change.

Most respondents (71%) are aware that alternative payment models, such as bundled payments or shared savings, are included in their health plans. However, only (38%) say they know what fees they are being charged. Employers should push health plans for this information so they know whether the APMs are producing savings that justify the additional cost. A small number of respondents have established direct contracts with Accountable Care Organizations (6%) or Centers of Excellence (10%); custom carrier arrangements (programs jointly developed by the employer and carrier) are more common (11% for ACOs and 19% for COEs).

Employers can gain important insights using existing data to analyze variations in the quality and appropriateness of care across providers or geographic locations. Nearly two-thirds (62%) of Scorecard respondents have done so to some degree -- with 23% using an independent vendor to conduct analyses. While 62% say they encourage members to refer to quality information in selecting providers, 17% have gone farther by steering employees to high-quality providers using plan designdifferentials. A third require members to use specific providers for certain services; for example, a Center of Excellence for transplants or for bariatric surgery.

This Vital gets at the problem of engagement: to engage with a program, employees need to believe it’s relevant to them and was designed with them in mind. Almost two-thirds (64%) of Scorecard respondents indicate that their senior leadership believes that engagement with health programs is important to HR and business objectives. One critical step in building engagement is to discover what different segments of the population value in terms of benefits, programs and policies, and 31% of respondents say they understand this to a good extent. In addition, 47% have identified the top health issues in the population and offer programs to address them.

Collectively, employers provide healthcare coverage to the majority of Americans, so they are uniquely positioned to disrupt the US healthcare system. Among Scorecard respondents with 5,000 or more employees, an impressive 42% say they are “highly engaged” in a local, regional or national employers group that has a goal of improving healthcare quality and affordability (although that drops to just 14% of respondents with fewer than 5,000 employees). To promote the fresh and independent thinking required for real change, 38% of respondents have carved data analytics from the health plan and assigned it to an independent vendor. Nearly half (49%) of the largest employers in the database say they have piloted a program that could be considered a disruptive health benefit strategy.

While we are eager for more data to work with, the picture that’s emerging from the data so far is encouraging. Across the four sections of the Scorecard, employers can score a maximum of 400 points. We expected scores to be low in the first few years, by design – the Scorecard was created to introduce new ideas. So far, the average score is 146 – that may be less than half the maximum, but it’s way more than zero! These employers have begun the journey to optimize their programs and push for positive change in the US healthcare system.

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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