Employers leverage Centers of Excellence (COEs) to help manage high-cost, complex care like bariatrics and orthopedic surgery. But they’re also one of the most misunderstood solutions that exist because everyone defines them differently.
Along with Phillips 66, we debunk common COE myths to help you better understand fact from fiction so you can achieve the best surgical outcomes and savings.
In this webinar, you’ll hear from:
Kim Baker, Senior Advisor, Health & Wellness Benefits, Phillips 66
Raymond Hwang, MD, VP, Medical Director, Lantern
Erin Tatar, SVP, Consultant Relations, Lantern
Read on to learn about:
- Why health plan COEs aren’t your only option
- What “excellence” in COEs really means—and what it doesn’t
- Whether COEs should be mandatory to be effective
Understand that the Definition of COEs Vary
If you ask health plans and even independent solutions to define their Center of Excellence, you’ll likely get a different definition for each. In broad terms, a COE generally refers to a healthcare provider or network of providers that have demonstrated exceptional expertise and outcomes in specific medical procedures or conditions.
But how do you determine “exceptional” expertise and outcomes? Erin Tatar, Lantern’s SVP of Consulting Relations, kicked off the webinar discussing the importance of doing your homework when choosing a COE for your employees. “Be really careful that you’re doing a true apple to apples comparison and that you have a clear understanding of how each defines quality,” she said.
When Kim Baker, Senior Advisor of Health & Welfare Benefits at Phillips 66, was looking for a COE for its 12,000 employees, she said there were two key factors they considered. “We always want to see savings. Clinically, we wanted to see positive outcomes.”
Dr. Raymond Hwang noted that traditional COE models focus on positive outcomes at the facility, not the outcomes from surgeons performing those procedures. A top surgeon, for example, is unlikely to be equally good at every single surgery he or she performs. “An orthopedic surgeon specializing in joint replacement might be superb at knee replacements, but that doesn’t translate to hip replacements,” Dr. Hwang said. “At Lantern, we individually vet each surgeon in our network on clinically meaningful quality metrics like sub-specialization, board certification, procedure volume and appropriateness of care.”
“An orthopedic surgeon specializing in joint replacement might be superb at knee replacements, but that doesn’t translate to hip replacements.”
Health Plan COEs and Independent COEs Don’t Work the Same
Based off their contracts, Tatar added that health plans have limited ability to steer to just one or two surgeons in a practice for a specific surgery. And, she added, health plan COEs don’t offer dramatically different unit costs and downstream savings. “Those health plan COE negotiated reimbursement rates are typically on par with or pretty close to the same rates you’d pay under the PPO,” she said.
Baker said they looked closely at these areas because they wanted to offer quality affordable care but also wanted to be a responsible fiduciary of their plan. “We’re always trying to find ways to challenge the status quo,” she said. “Lantern has a long list of quality indicators, so we’re much more comfortable sending our participants to Lantern’s vetted providers.”
Vetting providers also means looking at the number of specific procedures performed by a surgeon. “The relationship between volume and outcomes is really important,” Dr. Hwang said. “It’s weighted in our qualification process, and we’re also continually monitoring our existing network to ensure they maintain that volume.”
Know What Surgeries Your COE Covers & Decide What’s Mandatory
If you choose a COE through a health plan, understand that some don’t cover all types of procedures. For example, some COEs only cover complex surgeries like spine surgery. Other independent options like Lantern, however, are available across all plannable procedures.
“You’re going to get the cost savings for those higher cost procedures like joint replacement, but savings for more routine surgeries like tonsillectomies, still add up,” Tatar said. “And no matter what procedure, you want employees to get the best care.”
When choosing a COE, you also need to determine what, if any, procedures are mandatory. Baker said they only require employees to use Lantern for bariatric surgery because it’s a high-risk surgery that requires a lot of patient management. “It’s been well received,” she added. But, for other procedures, they give employees the option to go through Lantern or choose their own doctor. “Nothing sells Lantern like word of mouth,” Baker said. “We don’t require other procedures because the uptake has been there. It’s been delightful to watch and to hear the feedback from employees.”
Other clients, Dr. Hwang noted, do put more mandatory procedures in place because the average healthcare consumer (and even the average primary care doctor), doesn’t have the ability to determine the best surgeon. “There’s a lot of value for organizations to implement a mandatory program,” he said. “It is understandable employees may bristle at first at this idea of mandatory. We all prefer choice, but to echo Kim’s point, once we hear from clients that word spreads about the quality of our vetted network and members go through the experience, they really see the value.”
“Nothing sells Lantern like word of mouth. We don’t require other procedures because the uptake has been there. It’s been delightful to watch and to hear the feedback from employees.”
Local Access a Key Component for CEO Utilization
It’s a common myth, but COEs shouldn’t require a member to travel for care. Lantern data shows that patients are eight times more likely to get care when it’s local. “There are some COE models where patients would have to fly to a major facility no matter where they live,” Tatar said. “While some of these large teaching hospitals are absolutely the right answer for some patients, great care is available locally and within driving distance for the most common plannable procedures.”
Ambulatory surgery centers can also be a great option for cost savings and high quality close to where members live. “ASCs offer a variety of benefits,” Dr. Hwang said. “They offer a better experience, things like lower infection rates and lower costs, all while delivering the same or better clinical outcomes.”
Baker shared that they left Lantern (formerly SurgeryPlus) early on when the network wasn’t large enough. “It’s really challenging for our people to travel three or four hours away for surgery,” she said. Once Lantern extended their network, they became a client again in January 2023. To date, they’ve seen a lifetime savings of $3.5 million and employees rate Lantern a 9 out of 10.
“I was hesitant [to go back to Lantern], but it’s gone over so beautifully,” Baker shared. “We’re educating our members. We have quality surgeons. These outcomes are real. And you know, I say we’re not just asking members to drink the Kool-Aid, we’re right there with them. We’re delighted to see the uptick in utilization.”
