Healthcare “Syntopical”: Cracking Health Costs 3 (part 14 of 15)

Chapter 5: Your Employee’s Health is Too Important

The following are some reasons for this overtreatment that I’ve collected over the years:

  1. Like most people, most doctors get paid more for doing more.
  2. Doctors often don’t keep up with advances in medicine.
  3. The patient wants surgery, and the doctor figures that the patient will simply get it from someone else if he declines to perform it
  4. The surgeon believes his professional judgement and experience trumps science.
  5. A doctor looks at a patient and sees a blocked artery. He or she wants to fix that artery, often with little regard for the fact that the patient may be too feeble for the surgery or that a nonsurgical medical alternative might be equally effective and even safer for the patient.
  6. Like people in many professions, doctors often have employers.
  7. The official government-established rules are distorted to enhance the income of “proceduralists” (specialists doing procedures)
  8. A doctor can get in more malpractice hot water by doing less than by doing more.


Chapter 7: The Company-Sponsored Centers of Excellence Model

Establish direct contracts between employers and clinics and hospitals that have achieved outstanding levels of success in managing the care for the very sickest members of your workforce. We refer to these organizations as “Company-Sponsored Centers of Excellence” (CSCOEs), to specifically distinguish them from marketing-oriented models where a well-known hospital anchors a local network using the (often self-designated) moniker of “center of excellence.”

What to look for in a CSCOE:

  1. Doctors and hospital facilities fully integrated (same organization)
  2. Fully salaried doctors, especially surgeons, with no “productivity bonuses”
  3. Doctors accountable for finding the safest and least invasive treatment to achieve desired patient outcome
  4. Patient tracking to observe long-term outcomes
  5. Transparent pricing such as providing global fees
  6. Stay away from academic health systems (University of … )
  7. A ‘medical destination’ program including logistics for your people being flown in
  8. Non-profit


Chapter 8: Hospital Safety: How to Get Your Employees Back to Work in One Piece

Hospitals probably constitute about 50 percent of your overall healthcare spend. … We’ve already provided half the strategy to reduce that percentage: medical travel through CSCOEs. But what about the many hospital admissions that don’t justify flying people out of town – people who may end up in unsafe hospitals right in town?

Using a high-deductible plan might help control some other expenses. But nearly every inpatient stay exhausts the allowed annual deductible, saddling your company with the rest of the bill. That means even if your employees become adept at shopping for outpatient care, lab, radiology, and physician services, they will still have little or no incentive to shop for the most price—competitive hospital.

So here you have very high-priced suppliers producing a slipshod product … and yet your only strategy today is to try not to use them by instead using wellness programs that, as previous chapters showed, may create more provider interaction. I suspect the following are the barriers preventing you from being more assertive with provider organizations:

  1. “I can’t pretend to know more than the doctors and nurses”
  2. “I don’t know how to evaluate the quality of a hospital”
  3. “My health plan handles my relationship with hospitals. I don’t need to get involved”
  4. “My business doesn’t have enough purchasing leverage to influence hospitals”

Action Steps:

  1. Determine your frequent lower-cost procedures
  2. Review those procedures against the Leapfrog scores at the hospitals in which those procedures were done
  3. Do some simple arithmetic to see what these lower scores are costing you and, through great chance of harm, your employees
  4. Tell your employees which hospitals are better than which other ones
  5. Nudge your employees financially toward the higher quality hospitals
  6. Let the hospitals know you’ve done this


Chapter 9: Real Care Coordination: The Only Other Way to Save Money

Quantum Health model, which we will call the “care coordination model” in order to avoid plugging a particular vendor, has subsequently become even more popular as a way to control benefits expense

  • Customer service for all benefits issues including eligibility, coverage, and claims
  • Provider services
  • Utilizations management including Precertification, Concurrent inpatient review/case management and Retrospective review
  • Case management
  • Disease management
  • Wellness programs (for employees that insist)

Think of the care coordination model as an ACO run for employers rather than by providers

How to Select a Coordinated Care Vendor:

  1. “Which of the functions listed above will be provided by you?”
  2. “Are all functions accessed by plan members (employees and dependents) and providers though a single-point service process – one toll-free number, website, and other access channels?”
  3. “How fully integrated are member services, patient advocacy, and care management functions in the vendor’s operation?”
  4. “How many calls do you CSAs handle?”
  5. “Explain the role-blending in your organization and give specific examples”
  6. “Does the IT/data system reflect a horizontal coordination of care platform?”
  7. “What specialized staff development methodologies do you use to foster care coordination?”
  8. “What specialized preadmission, post-discharge, and transition-of-care programs are included in the vendor’s program?”
  9. “Are post-discharge care management and disease management integrated?”
  10. “How are people who did not just get discharged referred into programs?”
  11. “What do you report on?”
  12. “How do you interface with Company-Sponsored Centers of Excellence”
  13. “How do you validly measure and guarantee outcomes?”

Although care coordination is a fast-growing field, you can see why more self-insured employers don’t do it. It requires actual work. … The total administrative fee (carrier plus care coordination vendor) is also higher with care coordination, since a care coordination vendor is doing much more. But that doesn’t mean it costs more. … And of course, you will actually be doing something.



  • Charge a higher monthly contribution to employees who do not do something of ‘wellness value’
  • ‘Subsidize’ healthy food options or ‘tax’ poor food options
  • Use ‘specialty pharmacies’ for ‘specialty medications’
  • Set up drug co-pays by category, not by price
  • Negotiate Spread with your PBM
  • Stay out of PCMHs forever and ACOs for now
  • Set up CSCOEs for the very sickest outliers of your workforce
  • Pay the employee’s $250 co-pay if they use a high-performing hospital for in-patient care




  • com for Proof of ‘wellness value’
  • Companies that use CSCOEs: BP, Burger King, Hershey, Lowes, Walmart, Pepsi, Boeing
  • BridgeHealth Medical to set up a CSCOE for small companies
  • Laurus Strategies to set up a CSCOE
  • Leapfrog for High-performing hospital scores
  • com for Care coordination model vendors
  • Healthways for well-being vendor (as opposed to wellness)
  • Gallup-Healthways Well-Being Index (WBI) for well-being measurement and Well-Being Assessment (WBA) for individuals
  • Ascentia Health Care Solutions for tools for physicians by physicians
  • “Private Exchanges” to compare to standard, Public Exchanges. Rates will probably be the same, but services may differ drastically.