Leveraging Centers of Excellence to Boost Quality and Reduce Cost of Healthcare

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As the coronavirus pandemic continues to sweep through the world, it has heightened our health-consciousness and, at the same time—following widespread travel bans and restrictions—created a pent-up demand for healthcare services that could be financially taxing for employers. In the post-pandemic era, one way that employers—particularly large self-funded employers—can minimize healthcare costs and optimize quality of care for their workers is to contract with Centers of Excellence (CoEs). 


Centers of Excellence offer self-funding employers huge cost savings, better clinical outcomes, fewer admissions, and less diagnostic errors or treatment complications. These healthcare providers offer healthcare services at bundled rates, allowing business owners to send a large number of employees to these facilities to receive care at significantly lower rates. 


While direct contracting with CoEs has been an age-long model, the pandemic will spur a paradigm shift in how health buyers and payers access care for their employees: more employers may consider direct contracting programs to save healthcare costs and still receive quality healthcare benefits amid these unprecedented times. 


In 2016, about eight in ten employers used the COE healthcare model, according to a National Business Group on Health survey. Employers leveraged these centers to access specialized procedures, including orthopedic surgery, bariatric surgeries, and organ transplants. Companies, such as Boeing, Jet Blue, Walmart, and PepsiCo partnered with top healthcare  providers in the country, including Cleveland Clinic, Mercy Hospital Springfield, and Mayo Clinic, which offer advanced specialized care at bundled rates and with better clinical outcomes. 


A case in point, Walmart, exemplifies the potential of CoEs to lower healthcare costs by eliminating unnecessary diagnostic tests and treatments. 


A news report in 2019 covered the healthcare journey of a Walmart employee named Carl (name changed), who had been suffering from mild neck pains and hand tremors for several years. The pain got worse and a local surgeon ordered an MRI to evaluate Carl’s neck. The MRI showed some narrowing in the spinal column, for which the surgeon recommended spine surgery as the best option. 


Carl had two options: have the surgery at his local hospital and suck up deductibles and copays or enter Walmart’s CoE direct contracting surgery program and fly to a spine center in another state. Carl opted for the latter option and traveled to Danville, Pennsylvania, for a review at Geisinger Medical Center. The hospital evaluated Carl’s condition and diagnosed Parkinson’s disease, obviating the need for spine surgery. The next day, Carl flew back home and commenced treatment for Parkinson’s disease, which was covered under Walmart’s standard plan. So far, his symptoms have improved significantly and Walmart has saved $30,000 that would have been paid for an unnecessary procedure. 


Employers are also pushing the envelope of this healthcare model, expanding their healthcare plans to international medical providers. HSM, for example, a North Carolina-based furniture company contracts healthcare services to CoEs in Costa Rica. HSM sends its employees mostly for orthopedic surgeries, gastric procedures, and heart surgery. 


For HSM, Costa Rica is a good choice to contract healthcare to, as it serves its large Hispanic workforce, offers quality care at a fraction of US costs, and has remained among the top destinations for medical tourism in recent years. For context, Costa Rica ranked among the top 10 medical tourism destinations in the 2020-2021 Medical Tourism Index released July 2020. 


As the pandemic declines across the world, more employers may adopt the direct contracting model to meet the pent-up demand for elective procedures while also minimizing healthcare spendings. However, employers may encounter some challenges in establishing healthcare collaborations with these centers. 


For instance, cultural or language barriers, poor communication channels, gaps in the continuum of care, unclear care paths and protocols, and poor travel logistics may mar the quality of care and the patient experience. A healthcare provider may offer quality clinical care but may not be adequately prepared, in terms of personnel and logistics, to provide care for the international patient. For such patients, the clinical treatment received is only a component of care, the entirety of care—from pre-travel consultations to departure—constitutes the total patient experience. 


To ensure employers can establish strong partnerships with the right CoEs that offer excellent patient experience, the Global Healthcare Accreditation (GHA) is working with several healthcare providers and other relevant stakeholders, developing standards for quality and safety for medical travel. GHA has marked metrics and indicators that validate the quality of care provided by these Centers of Excellence to medical travelers, both domestic and international.  


According to Ms. Karen Timmons, GHA’s Chief Executive Officer, "The results of the GHA accreditation process places healthcare providers in a better position to attract and effectively serve health tourism or medical travel patients. It has been gratifying to hear feedback from our accredited clients which highlights improved patient experience scores and an increase in patient volume since becoming GHA accredited.” 


GHA focuses on the entire care continuum, conducting a deep review of a healthcare provider's medical travel program, encompassing accreditation, certification, and training for hospitals, ambulatory services, hotels, and transport logistics involved in the international patient experience. 


But healthcare payers and buyers now also have a new metric for assessing healthcare providers amid the ongoing health crisis: COVID-19 risk mitigation. In the ‘new normal,’ patients, employers, and insurers would more likely establish a direct contracting model with a center or facility that has put coronavirus risk-mitigation and safety measures in place. 


Given this, the GHA developed a Certification of Conformance with GHA COVID-19 Guidelines for Medical Travel Programs that demonstrate to healthcare buyers and payers that a healthcare provider or medical travel program has operational protocols and safety measures to mitigate the risk of COVID-19 transmission. The certification encompasses all stakeholders in the care continuum, including hotels and transport logistics, ensuring that these businesses comply with internationally recognized standards for sanitation and safety. 


Hospitals across the world, including renowned Phyathai 1 Hospital and Aek Udon International Hospital, both in Thailand, are among the hospitals that have received the certification, demonstrating that they prioritize patient safety and health amid the global pandemic. 


According to Timmons, “One of the key objectives of the Certification of Conformance is to enhance transparency and encourage ongoing communications with patients, which is even more important during this challenging time, and which ultimately helps to increase patient trust in the organization.”


Healthcare Contracting in the New Normal

Contracting healthcare to Centers of Excellence is not a new model, employers have been leveraging these programs to provide quality healthcare at lower costs to their employees. However, with the economic downturn and pent-up demand for healthcare triggered by the coronavirus pandemic, the paradigm of health will shift toward this model as more self-funded employers adopt this healthcare plan to minimize healthcare spendings while optimizing clinical outcomes for their employees.