Home Health Care New Premier collaborative network to bring Walmart-style cost efficiency to healthcare

New Premier collaborative network to bring Walmart-style cost efficiency to healthcare

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A new organization backed by health systems is entering the race to help employers control the cost and improve the quality of healthcare they buy for their employees at a time when costs are top of mind

The organization, Contigo Health, is part of Premier, a Charlotte, North Carolina-based group purchasing and consulting firm that is owned by hospitals, health systems and other healthcare organizations. The formation of Contigo was announced Tuesday in a news release, which noted that a group of 35 health systems, representing more than 440 hospitals, have “already signed letters of intent” to participate in Contigo Health’s new network of providers. Payers will also be part of the network.

Expect more announcements in the coming months regarding large national employers joining the network with Contigo Health. 

The company’s goal is to root out what it describes as “unnecessary variations in care delivery” and use data and technology to deliver the highest quality, most cost-effective care. But the agenda will be set, in part, by employers, two Contigo executives said in a phone interview.

“Employers are firmly positioned, when coupled with innovative healthcare systems, to be the ones to fix U.S. healthcare,” said Dr. Jonathan Slotkin, chief medical officer for Contigo Health, which was officially launched in early November. “We want to bring them together in intelligent ways in a network that puts care quality first.”

The Contigo effort is targeted at companies with at least 2,500 employees but resembles efforts underway at some of the country’s largest employees, including Walmart. The retail giant has been reshaping its health benefits to stomp out unnecessary care and steer employees to providers that are found to offer care deemed appropriate, high-quality and cost-effective. For instance, Walmart has created Centers of Excellence through which the retailer pays its employees to travel to places like the Cleveland for those in need of cardiac surgery, or the Mayo CLinic for those needing transplants, spine surgery, and cancer care respectively.

“You do not have to be the size of Walmart to do this work,” said Slotkin, who is also a practicing neurosurgeon with Geisinger, a health system in Danville, Pennsylvania.

He said quality care is likely to be the most cost-effective, even if it is not the cheapest per unit. Some employer groups, of course, have noted disparities in cost between health systems for the same procedure in the same market. The real savings, however, come from avoiding unnecessary care, said Slotkin, who cited findings from his work with Walmart, which he wrote about earlier this year in Harvard Business Review.

Contigo Health has hired about 15 people so far and is supported by another 20 from Premier, according to Steven Nelson, a former Anthem executive who is president of Contigo Health.

“We believe we’re going to be launching national programs that standardize care and reduce variation in terms of how care is provided,” Michael J. Alkire, Premier’s president, said in a Nov. 5 conference call with investors, according to the transcript.

The first steps for Contigo – which means “with you” in Spanish — involve matching employers and health plans in pilot projects – similar to centers of excellence, or COEs – designed to address specific episodes of care, such as pregnancy or joint replacement. The company eventually plans to add chronic conditions like diabetes and cancer.

Employers can choose to focus on areas where they are seeing high costs or where they believe certain health systems are delivering the best results, Nelson said.

The pilots, slated to start in 2020, will operate largely within employers’ existing health plans, Slotkin and Nelson.

The pilots will use data from the electronic health records of the participating health systems. The idea is to find out what works and then import it to other areas where an employer has employees and then to broader groups, Nelson said. Full-scale programs will start making their debut in 2021 and 2022.

“The bridge is that we’re going to bring a COE-like experience to the communities where people live and work,” Slotkin said.

As part of its work, Contigo also hopes to get doctors talking to patients about employer-sponsored ancillary benefits, such as nutrition, weight-loss and smoking-cessation programs. Studies show employees are largely disengaged from those programs, but Slotkin and Nelson said prompts from doctors could spur patients to act.

“We’re going to bring on this thing that we are calling a benefits formulary that every employer has and make them actionable at the point of care,” Slotkin said.

The challenge will be getting the benefits information to doctors in real-time, the executives acknowledged. But they believe the effort is worthwhile. “Doctors could use that to round out the care …they prescribe right there in the clinical setting,” said Nelson.

 

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