Ninety-two percent of large U.S. companies have a healthcare Center of Excellence (COE) for at least one condition. But if you’re a benefits leader and you’re not seeing much engagement with your COE, you’re not alone.
While COEs can be a highly effective way to connect employees with quality providers and reduce costs, not all models drive the engagement and savings employers are looking for.
In our conversations with benefits leaders, we get a lot of questions about how our surgical Network of Excellence differs from carrier COEs and other similar solutions. We talked with Mike Cook, VP of Strategic Accounts at Lantern, and Ryan Burke, Chief Network Officer, about the common misconceptions they hear and a new approach to COEs that drives better accessibility, cost savings and engagement.
Myth 1: Health Plan Centers of Excellence are your only option
While it’s true that the majority of employers with COEs in place have them through their health plan, this isn’t your only option.
And while the health plan model may have a low barrier to entry and a straightforward user experience, it comes with several drawbacks.
For instance, health plans generally aren’t able to steer members to specific facilities, limiting employee navigation and ultimately decreasing utilization. Plus, health plans may not even promote the feature to employees, causing the benefit to become lost in a flurry of other services.
A newer type of COE, known as independent COEs, can partner with health plans but operate separately. Rather than designing programs around insurance carriers or health facilities, they take a physician-first approach.
Without being tethered to a single facility or health system, independent COEs are free to design national networks around hand-picked surgeons operating at academic institutions, community health systems and ambulatory surgery centers to serve a national patient population. Independent COEs are also able to steer members to specific high-quality providers, ultimately increasing access and improving care.
Myth 2: All surgeons and facilities in a COE operate at the same level
When employers choose a facility-based COE model, employees have access to the providers within the specific facility, regardless of their skill level, specialization or experience, explains Mike Cook, VP of Strategic Accounts at Lantern. The problem is that even at a well-known hospital, not all surgeons operate at the same level.
The complication rate for surgeries averages between 8%-15%. Nearly one-third of all surgeons in a given market lack board certification. There’s clearly a challenge with finding quality care, and employees typically struggle to identify quality providers.
“All centers of excellence are not created equal,” Cook says. “We take a physician-first approach because we would like our members needing hip surgery to go to the surgeon who does 100 hip surgeries a year, not the one who does one or two.”
Lantern uses a strict vetting process to select the best surgeons.
“We established knockout criteria to identify the providers who won’t be a good fit for our model, and take a quantitative, data-driven approach to pick the right providers,” Cook says.
Lantern only selects providers who are board-certified and fellowship-trained. Other quality considerations include:
- Procedure volume
- Surgical safety rates
- Readmission rates
- Comprehensive patient care plans
By individually vetting top surgeons, Lantern providers achieve a recovery rate of 99.4%, compared to the industry average of 85%.
“We have a team of practicing surgeons on our medical advisory board who review every surgeon with Lantern,” says Ryan Burke, Chief Network Officer at Lantern. “And not just when we first bring them into the program, but every year thereafter. That’s not easy, or even possible, for most consumers to do.”
Site of care also plays a big role in positive outcomes. Burke says Lantern often guides employees to Ambulatory Surgical Centers (ASC) when appropriate, as they offer 75% lower readmission rates than hospitals and 6X lower infection rates than hospital outpatient centers.
“When you optimize a patient for an ASC, you can impact modifiable risk factors and put them in an environment that not only is a better environment from a comfort standpoint, but it’s also a better environment from a safety standpoint because ASCs aren’t operating on sick people,” Burke says. “You’re in and you’re out, but it’s critical to make sure you’re working with a surgeon that understands when a person qualifies for a surgery center.”
Myth 3: A COE must be mandatory to drive engagement
If you find a COE program you believe in, it’s natural to want as many employees as possible to get the high-quality care you’re providing access to. But you also know that mandating employees see certain providers is almost always unpopular, especially if they have an established relationship with a different surgeon or their primary care doctor made a recommendation.
Cook says rather than making COE utilization mandatory, providing employee incentives for engaging with COE programs proves more effective.
“The greatest engagement levers are to waive the member copay or deductible,” Cook says. “If they’re in a PPO plan, many of our clients waive everything, so there’s no deductible, no co-insurance. If employees are in a high-deductible plan, we can set up a plan so we’ll only collect the IRS minimum, which is $1,650 and even delay collection until the end of year when many members would have already exceeded that minimum.” This approach uniquely addresses the healthcare affordability crisis with 54% of Americans deferring healthcare last year due to cost.
Covering a wide range of procedures also drives engagement with COEs. The Lantern model covers over 5,000 plannable surgeries and procedures.
“Traditional COEs are very narrow in scope,” Cook says. “It might just cover bariatric, joint and spinal conditions. We like to say, ‘If it’s a plannable event, why shouldn’t we take care of it?’”
Covering many procedures also helps reduce friction for employees. It’s a better member experience to call and learn that your procedure will be covered, rather than that only a small number of high-acuity surgeries are part of the program.
“We see the highest engagement because we provide local access, the greatest number of services and an incentive to the member of $0 out of pocket or as near as low as possible,” he adds.
Myth 4: Employees must travel far to receive excellent care
Benefits leaders may assume employees need to travel long distances to visit a COE, and the assumption can be true or false depending on the COE model.
Traditional models typically have only a few dozen sites located around the country. While it may be convenient for employees living close to a large population center, employees living in rural settings must travel long distances to visit one of the mandatory COEs.
Large companies likely have employees all over the country, so a COE model with health centers only in large metro areas not only alienates some employees but decreases utilization.
To increase access nationwide, Lantern takes a COE network approach and partners with excellent surgeons operating at ambulatory centers, hospitals and other care sites across the U.S. It places 99% of Lantern’s 6 million member base within driving distance of a high-quality COE.
“Our network of specialists and facilities is 5X larger than any competitor,” Cook says. “We have more than 2,000 surgeons and over 1,500 locations across the country. That’s how 99% of members are within driving distance of their appointments. Having a 5X multiplier in access is a huge boost for engagement.”
Myth 5: Cost savings are similar between health plan and independent COEs
Cook says carrier models like to advertise their rates are lower than the list price, but cautions the ways they determine pricing are murky at best. He says carriers typically base their rates off the list price for procedures, not the Medicare reimbursement rate.
“They’ll say that they’re at a 50% discount from list price,” Cook says. “But at Lantern we’re 50 cents off the dollar from the carrier’s discounted rate that is the net allowed amount.”
As a licensed third-party administrator, Lantern is uniquely positioned to negotiate the best prices that average 130% of Medicare prices through direct contracts, dramatically lowering the total cost of care. On the other hand, carriers, including their COEs, often charge 250% to 300% of the Medicare rate.
Lantern can also negotiate lower rates directly with physicians by ensuring increased volume for common procedures and quick and easy payment.
“Typically, a hospital will pull in from about five counties,” Cook says. “We’re able to say, ‘We can steer members to you from 19 counties. We’ll increase volume. We’re our own third-party administrator, so we’ll pay the complete bill eliminating accounts receivable concerns, and we’ll do so in a five-to-10-day period, versus the industry standard of 180 days.’”
On average, Lantern customers see a 4% total healthcare spend reduction, averaging $17,000 per member. Multiple Lantern customers save millions per year on employee health costs while improving access to care. In 2023 alone, Hyatt Hotels saved more than $6 million on employee surgical costs.
“The key takeaway here is that all centers of excellence are not created equal,” Cook says. “We’re a surgeon-first approach. We’re a next-generation local and inclusive network, and guide members to receive better high-quality outcomes at 50 cents on the dollar.”
