The largest segment of the US population—approximately 158 million lives—receive their health insurance through employer-sponsored plans. Many innovations in healthcare and managed care over the years involved employers. The origins of Kaiser Permanente and Blue Cross Blue Shield plans emanated from prepayment arrangements established between employers and hospitals in the early part of the 1900s. Later employers would lead the way in the 1970s and 80s, pushing their intermediaries to create preferred provider organizations, centers of excellence, and other nascent quality programs. Large employers were a driving force in forming the National Committee for Quality Assurance (NCQA) to measure and evaluate the quality of the health plans that they select on behalf their employees. NCQA’s Healthcare Effectiveness Data and Information Set (HEDIS) program still in use today, initially stood for “Health Plan Employer Data and Information Set.” In the 1990s, the NCQA became a major conduit through which employers could pressure health plans to continually raise their quality through accreditation and their reporting of scores are often used in the selection (RFP) process.
Employer Healthcare Coalitions
Today, most employer efforts to improve quality are done through various business groups or coalitions. Many employer coalitions sprang up in the 1980s and 1990s to address rising costs, waste, and perceived ineffectiveness on the part of both their intermediaries and providers in their respective regions. The groundbreaking research by Dr John Wennberg at Dartmouth identified profound and questionable geographic variations of care, outcomes, and costs that served as stimuli for many to employers to take action in their own communities. Many began group contracting of services, direct contracting with providers, and often stipulating certain basic quality and employee satisfaction standards. Several utilized package pricing for services to encourage appropriateness of care (a Wennberg tenet) in addition to “executional quality” of a service. For example, package pricing for maternity (paying the same price for a normal delivery as C-section to reduce financially driven C-section rates), coronary artery bybass surgery, etc. Coalitions were some of the first to report outcomes data to their communities (eg, mortality, complication rates, length of stay) in addition to cost. Furthermore, national coalitions such as the National Association of Health Care Purchasing Organizations, the National Business Group on Health, the Integrated Benefits Institute, Institute of Health and Productivity, and others produce volumes of research, reports and guidance on quality, value-based care, and tools to engage employees, medical plan intermediaries (health plans, PBMs, etc), and others to meet and improve various quality benchmarks.
Following the 2015 Call to Action by the American Health Policy Institute, an influential group of large employers formed the Health Transformation Alliance (HTA)—which now has more than 7 million lives and 50 major corporations that spend over $27 billion in healthcare. They combine their claims data and participate in sophisticated data analysis and group package-price contracting for 4 important conditions at various centers of excellence (identified for their quality primarily). HTA also provides pharmaceutical benefits management group purchasing services and consumer engagement tools for their member companies.
Other major quality-related activities pursued by employers include the hiring of independent third-party groups (eg, Grand Rounds and Best Doctors) to assist employees with navigating treatment options for complex and/or expensive conditions with their cases reviewed in depth by national clinical experts.
How can life science organizations engage employers on quality?
Most employers have delegated most of the “quality” responsibilities to their health plans and/or other groups such as business coalitions, NCQA, and others. Because the cost of healthcare remains the top issue, discussions with employers should quickly make the connection between quality and cost –medical as well as absence/productivity costs. Life science organizations can support employers to raise their understanding of the value of certain therapeutic approaches with improving quality. These may include:
- Engage with large employers, their very influential benefits consulting firms and business coalitions to present—and refine—your quality/value proposition to then leverage with US payers
- Consider targeted communications to provider groups regarding latest quality measures in a therapeutic area and expectations of local employers with regard to meeting those standards
- Develop sample communications for an employer or benefit consultant/broker to customize for use with their health plan/pharmacy benefit manager to further relevant quality improvement activities and/or expand coverage as appropriate
- Provide relevant data to demonstrate the value of an approach or product vs existing therapies with respect to total cost and encourage dissemination across the employer channel
The COVID-19 pandemic tacitly forced employers into the business of employee population health management and raised their appreciation for data that leads to health improvement and disease prevention. As the pandemic subsides and workforces normalize, the Human Resource departments across corporate America—and their all-important consultants and coalition partners—should be more receptive to discussions about improving quality.
- Kaiser Family Foundation. Health insurance coverage of the total population. https://www.kff.org/other/state-indicator/total-population/?dataView=1¤tTimeframe=0&selectedDistributions=employer&sortModel=%7B%22colId%22:%22Employer%22,%22sort%22:%22desc%22%7D. Accessed October 14, 2021.
- BlueCross BlueShield. Leading the way in health insurance. https://www.bcbs.com/about-us/industry-pioneer. Accessed October 14, 2021.
- Kaiser Permanente. How it all started. https://about.kaiserpermanente.org/our-story/our-history/how-it-all-started. Accessed October 14, 2021.
- Ohldin A, Mims A. The search for value in health care: a review of the National Committee for Quality Assurance efforts. J Natl Med Assoc. 2002;94(5):344-350.
- Dartmoth Geisel School of Medicine. Dartmouth’s John E. Wennberg wins prestigious Lienhard Award. https://geiselmed.dartmouth.edu/news/2008/10/13_wennberg.shtml. Published October 13, 20
- Health Transformation Alliance. https://www.htahealth.com/. Accessed October 14, 2021.