Centers of Excellence (COEs) are one of employers’ most common tools to control costs and improve access to high-quality care. But just because they’re popular with employers doesn’t mean employees know what they are—or use them.

“The average patient is not familiar with the concept of COEs,” said Erin Tatar, Head of Consultant Relations at Lantern. “Without a lot of guidance, they’re not necessarily going to know to use the program.”

For this reason, more employers require employees to use their COE for specific high-cost procedures, such as bariatric and orthopedic procedures. And the benefits are clear: Lantern data shows employers who require employees to use its COE for at least three conditions save an average of $50 per employee per month versus $10 PEPM in the voluntary model. 

Employer interest in mandatory plan design surged by 4X in 2024, with 50% of Lantern’s new clients adopting it. 

At the same time, requiring procedures through a COE has its challenges. No one likes having their options limited, after all. Lantern clients also share that a COE doesn’t have to be mandatory to be effective. We talked with benefits leaders about some of the pros and cons of requiring COE utilization and their tips for a smooth process if you decide to make it mandatory.

The challenge: Employees complain about needing to use your COE for certain procedures.

The solution: When Hyatt’s benefits team implemented Lantern in 2021—as the COVID-19 pandemic severely impacted the hospitality industry—they knew they needed to be aggressive with their plan design to reduce costs. 

“We needed to find some savings or we were looking at double-digit increases to premiums for colleagues and for our hotel owners, which wasn’t going to fly,” said Dawn Beaudin, VP of Benefits for Hyatt. “The traditional approach to introducing programs of just sending out communications and crossing your fingers and hoping you get engagement wasn’t going to be enough.”

They decided to require Hyatt colleagues to use Lantern for bariatric, spine and joint surgeries. While Beaudin notes employee noise is inevitable with a mandate, they felt confident in their solution, especially once Hyatt colleagues started using the program and positive word-of-mouth endorsements spread.

“We knew we weren’t throwing some program out there that wasn’t any good,” Beaudin said. “We knew that we were giving people really high-quality surgeons to pick from. Once an employee goes to a Lantern surgeon, the feedback is positive. So while it was bumpy, I don’t regret that we did it because we’ve achieved a lot of savings and given a lot of high-quality surgical procedures to people at the same time.”

The challenge: Employees don’t learn about the required procedure until their prior authorization is denied.

The solution: Sometimes, an employee goes through the whole intake process with a chosen provider before finding out they don’t have coverage for the procedure and have to start the process over with Lantern. 

To avoid this, talk early and often about your company’s COE benefit and the required procedures. Use multiple communication methods, including in-person sessions, emails, postcards and signs posted in the company breakroom. Highlight how the requirement helps employees save money and receive better care. 

“How well you’re able to communicate a benefit like this really comes down to the partnership you have in place with your vendor,” Tatar said. “We know it takes seven times for somebody to hear something before it really starts to resonate, and that is a guiding principle we incorporate into all of our recommendations around marketing and communication to our clients.”

Hyatt uses targeted communications to reach employees at a time when the messaging might be most relevant to them. 

“We’re working with Lantern to actually pull in claims information that is helping us to proactively identify based on procedure codes people who might be having physical therapy or might have gone to see an orthopedist recently,” Beaudin said. “And we’re doing some targeted communications to those groups.”

The challenge: Employees don’t want to travel for care.

Although Lantern’s network of physicians and facilities is 5x larger than any competitor, placing 98% of members within driving distance of appointments, there are certain times when a member may be able to find much closer care for their particular needs. When employers are designing a plan with Lantern, they have the option to add a mileage range for the mandate. For example, a member only has to use Lantern if there is a provider within 50, 100 or 150 miles of them. 

While this may limit savings, it offers more equitable access to your employee base while eliminating some member concerns. 

The challenge: Will our health plan support required procedures through an independent COE?

The solution: It’s true that your health plan may be resistant, at first, to helping direct members to your solution, advised Beaudin. The solution? Be ready to talk through your program with your health plan in detail to make sure everyone is on the same page and your members will get to where they need to go.

“Now we’re in a great place with our carrier,” said Beaudin. “They do nice warm transfers over to Lantern. But it is really important to talk through that with your carrier first and make sure that they’re going to cooperate.”

Required Procedures Aren’t Required for Success

While requiring procedures through a COE does lead to increased utilization, many Lantern clients have found success through completely voluntary or only partially mandatory programs. Phillips 66, for example, already required employees use a COE through their health plan for bariatric surgery, so requiring it through Lantern was a natural choice. But based on voluntary utilization, the company hasn’t required any additional procedures so far.

“Nothing sells Lantern like word of mouth,” said Kim Baker, Senior Advisor of Health and Wellness Benefits at Phillips 66. And so it just started to spread like wildfire. We didn’t have to require other procedures because the uptake has been there.”

Another option is to start with a fully voluntary program and require procedures later once employees know how it works.

Requiring Procedures Offers Savings, Quality 

While mandating procedures go through COEs may cause employee noise, there’s no denying the benefits it offers, especially for cost savings—but cost isn’t the whole story.

As a physician, Raymond Hwang, MD, VP and Medical Director at Lantern, sees the value of requiring procedures for care quality reasons. The average person doesn’t have a way of easily learning about a surgeon’s qualifications or outcomes. And with the average complication rate for surgery as high as 15%, seeing the best surgeon for the procedure you need makes a big difference. 

“There’s a lot of value for employees and organizations to require that their employees see those excellent surgeons that have been vetted thoroughly in this way,” said Dr. Hwang. “As a user of healthcare as well, I totally understand that people may bristle at this idea at first. Intuitively, we all prefer to have choice.

“But one of the inherent core challenges of navigating our healthcare system is that quality isn’t very transparent at all. Even in the hands of healthcare experts, it’s a very challenging exercise to try to determine whether or not you’ve identified a high-quality provider or facility,” Dr. Hwang adds. “Our mission is to provide transparency to that process and to help our members by matching them with specialists whom we’ve vetted and determined to be excellent, not just in general, but one or two layers deeper, who are excellent at the specific procedure this member needs.”