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Employers Ready to Implement New Payment Approaches and High Performance Networks to Reduce Health Costs and Improve Outcomes

By MBGH Information posted 12-09-2016 15:51


CHICAGO – August 2, 2016 – The Midwest Business Group on Health (MBGH), one of the nation’s leading non-profit business groups of large, self-insured public and private employers, released the results of a national survey of employers gauging their views and plans related to health purchasing strategies.

While there was overall agreement in most areas, large employers are more aggressively active in certain areas such as adopting value-based purchasing and direct contracting with providers. MBGH also found general agreement in how employers view the mergers of health plans, hospitals and PBMs.

Key survey findings include:

  • Although 6% of employers currently offer high performance networks – where providers are selected based on quality and cost – an additional 19% plan to offer these in 2017.
  • While 5% of employers indicated they are already contracting with hospitals, an additional 24% of employers said they plan to do so in 2017. A majority of these will use centers of excellence programs to find the best sites for care for specific conditions.
  • Lower or waived co-pays is the primary strategy for 35% of employers to incentivize employees to use selected providers, while an additional 17% are considering this for 2017.
  • Employers are currently using or considering new payment approaches, with 33% currently denying payment for medically inappropriate care. Strategies include: risk-sharing arrangements with providers, bundled fee for maternity care and other medical procedures, with close to a third moving in the direction of reference-based pricing and bundled payments.
  • Employers are concerned about the impact of hospital, health plan and PBM mergers, generally not expecting the mergers will result in lower costs, but hoping such mergers will improve efficiencies and higher quality, as well as lead to greater innovations in care.

With employers focusing on better performing hospitals, many look at patient safety as the first criteria. To identify the safest facilities, MBGH annually invites Illinois hospitals to submit their patient safety data to the Leapfrog Group (, an employer-driven national initiative to collect, analyze and publicly report on the safety in our nation’s hospitals. At a July 20 luncheon, MBGH recognized over 80 Illinois hospitals for their willingness to be transparent in their patient safety outcomes.

“There are over 160 hospitals in Illinois, yet over half have yet to report on their patient safety status, including some ‘brand name’ providers,” said Larry Boress, MBGH president and CEO and Illinois Leapfrog Group Coordinator. “Although they have until the end of the year, consumers, employers, health plans and physicians should encourage their local facility to be transparent about their performance and participate in the online survey. Based on the directions employers are taking as seen in this survey, those hospitals that refuse to do so will not be viewed as ‘high performance’ facilities and will be left out of networks, losing patients and revenue.”

The survey was conducted online in June 2016 and includes responses from MBGH and other business health coalition membership from throughout the nation and is meant to be a directional survey on the views, perceptions and strategies of employers on the changing health care marketplace.

About the Midwest Business Group on Health With more than 130 member organizations, the Midwest Business Group on Health is one of the nation’s leading non-profit business groups of large, self-insured public and private employers serving as a source for leading health benefit professionals and a catalyst for community initiatives to improve the quality, safety and cost-effectiveness of the health care delivery system. MBGH is a founding member of the National Business Coalition on Health. Follow on Twitter: @MidwestBGH

Media Contact:

Cary Conway

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