COE in Health Sysytem as Not All Medical Treatments Are Equal | Mercer US

Not All Medical Treatments Are Created Equal

Our Thinking / Healthcare /

Not All Medical Treatments Are Created Equal
Calendar26 July 2016

There has been much focus lately on the dramatic differences in the cost of services from hospital to hospital and market to market, and questions about the lack of price transparency abound. But even more concerning is the variation in quality. According to a May 2016 study by the National Center for Health Statistics, CDC mortality statistics don’t tell the whole story. If “preventable medical errors” were on the list of the leading causes of death in the United States, they would rank 3rd, claiming more lives than diabetes, strokes, and respiratory disease each year. To add to this, we know that the patient experience is sub-optimal at best and, in healthcare, we know there is no known relationship between cost and quality. All of this makes a strong case for Centers of Excellences, or COEs.

A COE is an organized offering around a specific disease condition or procedure by a hospital or health system ensuring superior clinical outcomes and fewer complications, an improved patient experience and a better cost profile. In a COE program, employees with complex conditions that need a non-emergent procedure are directed to facilities that are most likely to produce the best outcomes. Clinical focus areas for COEs include cardiac, spine, hip/knee, bariatrics, transplant, and cancer treatments. Potential advantages for employees include access to the highest quality medical providers and facilities; in many cases no travel costs and minimal out-of-pocket expenses; evidence-based care; personalized care management; and a lower risk of complications and readmissions. On the employer side, there are a number of benefits that make COEs attractive: price transparency, easier administration, lower healthcare costs, reduced absenteeism, improved employee satisfaction (as evidenced by extremely positive feedback), leading to strengthened employer-employee relationships.

That said, COEs are not without their issues. Without standard metrics or performance benchmarks, the definition of “excellence” is a subject of debate – sometimes a COE branding by an organization is more of a marketing tactic. For this reason alone, we encourage employers to “look before they leap” and  understand the criteria used to designate any facility as a COE so that they can realize the benefit of a COE. Employers should evaluate data and metrics not just for the larger COE population but also the impact on their specific population, in terms of quality, safety, patient satisfaction, and outcomes. Still, we expect COEs to continue to gain momentum. Mercer’s National Survey of Employer-Sponsored Health Plans 2015 found that among large employers, 25% currently offer a COE program and an additional 24% are considering it. Among the largest employers (5,000 or more employees), 43% already offer COEs and another 33% are considering it – and just as importantly, nearly 8 in 10 employers that currently use a COE are considering expanding their COE offerings. With employer interest so high, we anticipate that the numbers of COE designated facilities and targeted conditions will increase. In this evolving market, it will be extremely important for employers to identify the right COE and develop the right set of contractual elements for the relationship.

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