Value-based Purchasing in Healthcare: Solid Strategies for Employers

Employers looking to get more from their healthcare spend have a finite set of options. Shifting healthcare costs to employees has been one popular trend, but its limitations are now being realized. A more promising avenue for the long term may be found in pursuing value-based purchasing strategies among plans (and providers for self-insured organizations).

Of course, this strategy works best when employers can negotiate from a position of strength—armed with hard facts and metrics.

For example, working with a consultant, the Benefits Manager for a major employer in the Midwest began exploring ways to more efficiently match her employees' clinical profile (an aging workforce with two particularly prevalent chronic conditions) to a Wellness provider with proven efficacy in these areas.

Using DxCG Intelligence, the manager and her consultant compared the effectiveness of three health plans. They uncovered a 25% overall variation in costs across the different plans. What’s more, the costliest plan had a 10% lower health risk than the other plans. That meant nearly one-third of that plan’s 2012 costs could not be explained by the clinical makeup of its members.

Using advanced analytics to understand how the three plans compared, the employer had great leverage when it came time to negotiate rates for the 2014 benefit year. The employer approached the most efficient plan to provide disease management and wellness services, getting the best value for their dollar.

The future of employer savings lies in the development of long-term healthcare partnerships, the use of advanced analytics and an emphasis on value-based, efficient healthcare. Check out our website for more information about DxCG Intelligence and Employer Solutions.