Employers have traditionally used Centers of Excellence (COE) through their health plan to improve employee access to high-quality care. Yet, in recent years, self-insured employers are increasingly partnering with independent COEs that operate outside of their health plan. This approach helps reduce costs while guiding employees to top-quality facilities and providers.
In a recent AHIP webinar presented by Lantern, the panel focuses on how health plans can closely partner with independent COEs to share data and build an integrated member experience that delivers results benefiting all parties, including the opportunity to lead the way in saving millions for clients.
The webinar participants included:
– Casey Jennings, Vice President, Health Plan Growth, Lantern
– Tim Kelly, Head of Commercial Partnerships, Lantern
– Brian Marcotte, Past President and CEO, Business Group on Health
– Dickon Waterfield, President, Lantern
Key takeaways include:
– Why self-insured employers increasingly choose independent COEs to improve health outcomes and expand access to quality care.
– How independent COEs can deliver a better member experience, including high-touch care navigation, in partnership with health plans.
– How partnering with independent COEs delivers hard-dollar savings for clients and creates new opportunities for health plans.
– How integration with the largest health plans—Aetna, Anthem, Cigna, HCSC—reduces point solutions and gives health plans key information about the members you serve.
Why Self-insured Employers are Turning to Independent COEs
Traditional COEs that included a small number of facilities haven’t historically delivered on engagement.
“What we witnessed was that engagement was limited as most members were unwilling to travel for these types of procedures and were more apt to receive care in their local community. While the premise was there, there was very low engagement,” Kelly said.
Independent COEs, in contrast, have the freedom to contract with local facilities, including ambulatory surgical centers, teaching hospitals and community hospitals. It allows them to build independent networks across the country, helping employees access care in their communities or within a day’s drive.
And by not being tied to a specific facility, independent COEs can select providers based on their quality and experience.
“The differentiation we can deliver as an independent COE is the ability to not have that network baggage and steer directly to individually selected surgeons and specialists,” Waterfield said. “It makes a huge difference because we know that not everybody on a team is equal. You’ve got a roster of orthopedic surgeons, and there are some amazing ones, there are some pretty good ones and there are some less-good ones. You want your people going to those brilliant ones.”
Employers also choose independent COEs for the enhanced member experience. Independent COEs provide a personalized, concierge-like service to guide the members through complex surgeries or cancer treatment.
“Most health plans have a low NPS score,” Marcotte said. “If I look at Lantern’s NPS, it’s 85. And so that delivery of care element that stands alone in the market is more of a trusted resource when it comes to care delivery. That’s another reason employers are attracted to the independent COE model.”
Marcotte explained how employers try to provide their workers with value-based solutions, yet they’re often hard to come by with healthcare benefits. According to the Business Group on Health’s annual Health Care Strategy Survey, employer health plan costs are projected to increase 7.8% in 2025, the highest projection seen by this survey in over 15 years and a more than 50% increase in health care costs since 2017.
“Any business case you’re looking to make has a simple equation, which is basically value equals quality plus delivery plus experience over cost,” Marcotte said. “When employers try to apply that to healthcare, it’s very difficult to populate the equation with the exception of Centers of Excellence. Employers are interested in independent COEs because they become the closest to solving the value equation when it comes to quality, delivery, experience and cost.”
Ultimately, an independent COE’s ability to contract with local networks allows it to steer members to the most advantageous setting, significantly improving outcomes, reducing complications and lowering costs.
How Health Plans can Partner with Independent COEs
Jennings explained how there are typically three levels of partnership between health plans and employers.
- Separate teams, overlapping clients: The COE and health plan support the shared employer without interacting with each other.
- Centralized support: Teams communicate with each other and have some data-sharing in place to support a cohesive member experience.
- Formal partnership: Full alignment between the health plan and COE to lower trend, achieve goals and enable a commercial relationship.
“As a health plan, we want to work with you in a way that helps you reach your goals in addition to making our shared customers happy,” Jennings said. “So, it would include all of the above—the data sharing, working together on a cohesive member experience and also enabling a commercial relationship that would allow you to include us in your bids to help you improve your trend guarantee, which is obviously a competitive advantage.”
How Independent COEs Drive Savings
Waterfield said employers frequently question how an independent COE can negotiate lower rates than a large health plan. He explained that by choosing which providers they contract with and steering members to local facilities, independent COEs drive over 55% lower rates than health plans across all plannable surgeries.
“I always use the example of Atlanta,” Waterfield said. “There are six major systems in Atlanta. We partner with Northside. They’ve been fantastic partners of ours for the last eight years. Because of what we’re highlighting with savings, the plan sponsor can waive the member cost share.”
For example, an out-of-pocket expense for a knee replacement might be $4,000. By negotiating significantly lower rates, employers pass the savings on to the employee by waiving the copay or coinsurance.
“If you can waive that entirely, the member is going to happily drive from one side of Atlanta to the other side of Atlanta. The benefit Northside gets is that we’re bringing the members and patients who would normally go to other systems. And we’re ultimately paying them more than 50% of the member population they have today, because we pay 110-130% of Medicare prices.”
Waiving cost sharing not only makes care affordable and allows employees to focus on getting better, but it also boosts engagement with the COE and enables employers to reinvest those savings to fund the COE or introduce new benefits.
“We’re seeing employers take some of that savings and use it to fund the program and make it a win for the employee as well when they’re able to afford the care they need,” Marcotte said.
Ultimately, Marcotte said the cost savings generated from an independent COE create a win-win scenario for health plan administrators and employers.
“If you come into an employer and say, ‘Look, we have a solution that we’ve contracted with that can help address your MSK costs and help mitigate your trend,’ that’s a win-win,” Marcotte said. “It’s a win for you. It’s a win for the employer. And the fact that you’re bringing a value-based solution, you’re creating more stickiness with that employer. There’s tremendous opportunity, and employers are really looking for integration.”
Independent COEs Drive Better Outcomes
Jennings explained that it’s a common misconception that lower-cost care means lower-quality care, but Lantern overcomes the stigma by thoroughly vetting providers.
“At Lantern, we evaluate, select and contract our network at the surgeon level,” Jennings said. “We’re able to really hyper-target how we construct the network and only include providers who meet our strict standards.”
When independent COEs vet surgeons at the individual level, surgical avoidance rates increase while complications decrease. Lantern surgeons have a 32% surgical avoidance rate, in addition to 0.4% complication rate versus 8-15% industry average.
Waterfield said Lantern uses a three-step vetting process to ensure excellence in their providers, including:
- Are they board-certified and fellowship-trained?
- Do they have any sanctions or malpractice suits?
- What does their volume look like, and what are the outcomes?
“The best possible outcome is we help someone avoid surgery,” Waterfield said. “If we can help around 30% of people who are going through a musculoskeletal journey avoid knee replacement or spine surgery they don’t need, that’s phenomenal because they get back to better health and their life much more quickly. No one wants to have surgery.
“At the same time, when someone does need surgery, we want to make sure we deliver the best possible outcome and get them back to functional restoration as quickly as possible. And that’s what the data shows,” he adds.
Lantern also reviews Leapfrog data to ensure partner facilities meet their high standards.
“What are the hospital-acquired conditions that happen at that facility? Do they have any specialized program, for example, for bariatric care or joint replacements? We use these metrics to determine if we can work with a facility and then we monitor that on an annualized basis, making sure those standards are maintained,” Waterfield said.
Data Integration and Member Experience
Jennings explained how when health plans and independent COEs work together, it creates the opportunity to share data to design a more integrated experience and connect members with additional resources in the health plan.
“There’s a number of ways integrations can help with the overall experience, and it benefits all stakeholders, including the health plans, employer and the member,” Kelly said. “Getting claims information from the health plan gives us the opportunity to identify members as early as possible that may be eligible for surgery.”
Conversely, Kelly said COEs that share data back with the health plan create a more holistic continuum of care and better serve members with comorbidities, such as diabetes or cardiovascular disease.
“One additional area of integration is with other solutions the employer may have, such as an MSK vendor, to ensure the entire benefit ecosystem is coordinated on the member’s behalf, so the member has the best experience for all the benefits in coordination with the health plan.”
Many employers are concerned about point solution fatigue and worry the lack of integration overall further fragments an already fragmented delivery system. As a result, employers trim fractured benefits and double down on benefits that work together.
“They want better integration with their health plans, with their pharmacy benefit managers and with their navigation solutions,” Marcotte said. “There’s a real opportunity here for health plans to step in and play a contracting role.”
Marcotte explained how health plans can establish a relationship with a COE and allow an employer to turn it on and pay through their health plan without signing any contracts. It allows the employer to focus on communications, plan design and other initiatives to drive engagement with their solution.
“Employers are looking for more integration both vertically and horizontally within the healthcare ecosystem. Not only with health plans, but also with other point solutions,” Marcotte said. “For instance, there’s a journey in MSK where somebody may start with pain management and virtual PT, but maybe for some people that’s not working.”
Through integration, Marcotte said the member can transition to a solution like Lantern for a surgical assessment, and if necessary, undergo the procedure, then transition back to the virtual PT provider for post-surgical care.
“There’s a real opportunity here to consolidate point solutions, to drive better integration and to break some of that fragmentation we’ve exacerbated by offering so many solutions in the market,” Marcotte said.
Ready to learn more about partnering with Lantern to deliver better results for your groups? Get in touch with us.
