Business Group on Health’s Annual Survey: Large employers ready to take the reins on healthcare cost

• Responses to the Business Group on Health’s annual survey of its large employer members suggest employers are tired of waiting for providers and plans to figure out how to reduce healthcare cost, according to HFMA’s Chad Mulvany.
• Only 4% of Business Group on Health’s survey respondents state that implementing an ACO is top of mind for them in 2021.
• According to 52% of respondents to the Business Group on Health’s survey, virtual primary care solutions, including virtual first primary care access health, are a priority for 2021.

In looking through the summary slides of the Business Group on Health’s annual survey of its large employer members (122 employers representing 9.2 million covered lives), there were three things that jumped out at me.

1. They’re growing tired of waiting for providers and plans to figure how to reduce healthcare cost: Maybe it’s the pandemic. Or it might be purchaser impatience that a decade of payment and delivery system reform hasn’t delivered more in terms of cost savings and trend bending. But if the organizations represented in the survey make good on the intent represented in their responses regarding their  approach to delivery reform, it might be an inflection point in how purchasers approach their plan and provider partners. Here are some highlights:

• On the provider side, in 2019, 16%, not exactly a majority to start, of respondents stated they were – going to “drive delivery system change approach by pursuing the implementation of alternative payment and delivery models.” That fell to 5% in the 2020 survey.
• On the plan side of the equation, in 2019, 41% reported they were going to defer to their partners by, “mak(ing) adjustments as the market changes and implement what my health plan(s) and PBM present as the latest developments.” While the drop off wasn’t as significant, in 2020, only 21% agreed with that statement.
• Instead, 24% (up from 5% last year) of employers report in the current survey that they are going to, “circumvent the delivery system by deploying virtual and digital care point solutions, navigation and concierge services.”

Not surprisingly, virtual primary care solutions, including virtual first primary care access health plans (see slide below), seem to be tops on many employer’s priority list (52%, according to the survey, which is commented on in this press release). As discussed in my May 3 blog and my May 20 blog, if employers are actually serious about moving to virtual first, it will likely result in some disruption to existing referral patterns and revenue streams.

Large employers’ advanced primary care strategies, 2021-2023: Virtual primary care services will balloon in the next two to three years

These are emerging ways to deliver primary care services in higher-value settings in 2021: Which of the following primary care strategies will you have in place?

Source: Business Group on Health 2021 Large Employers’ Health Care Strategy and Plan Design Survey

While using benefit design to steer members to high performing networks/ACOs is also cited as a key primary care strategy (see slide above), one has to wonder if more employers will follow Wal-Mart’s lead by expanding this strategy to use claims analytics to develop virtual high-performing networks as opposed to relying on providers or plans to organize them.

2. Employers’ 2021 priorities don’t include ACOs: Only 4% of Business Group on Health’s survey respondents state that implementing an ACO is top of mind for them in 2021. As HFMA’s Rich Daly reports in an Aug. 19 article, this may be a temporary issue as the survey’s authors anticipate these efforts will pick up after the pandemic. However, this squares with the expectation from our executive members about growth in net patient service revenue at risk. In a 2019 HFMA survey, our members reported having on average 2.7% NPSR at risk at the time of the survey and anticipated having 6.34% at risk in five years. Approximately one third of respondents anticipated having more than 9% NPSR. We re-fielded the survey, gathering responses from 221 executives in July of 2020, and found similar results. In five years, the average amount of revenue at risk anticipated is 5.9% with 30% reporting they anticipate having more than 9% NSPR at risk. As I said last in my Aug. 24 blog, it’s going to be hard to launch the “value canoe” unless the private sector makes a more significant commitment to partnering with providers on risk-based models. And as much as legislative “solutions” to any problem may scare me, I’m starting to think that’s what it’s going to take.

3. Virtual solutions for high-cost problems: Ninety percent of employers responding to the Business Group on Health’s survey report that musculoskeletal conditions are one of the top three driving cost for them. So it’s not surprising that employers’ use of virtual solutions and centers of excellence to manage musculoskeletal issues are anticipated to grow significantly over the next two years. This should benefit large, national delivery systems that have experience running COEs and have made significant investments in telehealth capabilities. Organizations like Cleveland Clinic will likely continue to see volume growth for virtual services from patients/employers outside of markets where they have a physical presence, which will result in demand destruction for providers in local markets.