While specialty care procedures represent a small percentage of healthcare occurrences, they account for more than half of healthcare spend.
“Surgery tends to be somewhere between 20%-25% of total health spend. Cancer tends to be between 15% and 20% and infusions are another 5% to 10%,” Lantern CEO John Zutter said in a recent podcast interview for The Stretch, a workforce health and benefits podcast hosted by Aon. “They’re also generally growing twice as fast as healthcare at large.”
For years, employers have leveraged Centers of Excellence (COEs) to guide employees to the best facilities for this complex care. But utilization tends to be low, especially if employees have to travel.
“If you ask someone to get on a flight versus offer them access to high-quality care within their community, you have an eight times difference in utilization,” Zutter said. “If you ask someone to drive more than two hours, it’s a five times difference in utilization. The people have spoken, and they want care to be local and convenient to them.”
Zutter, along with podcast host Kevin Fyock, North America Innovation and Commercialization Leader, Health Solutions at Aon, discussed charting a new map to specialty care via a network of high-performing providers across the country to offer patients treatment options closer to home.
A few key takeaways:
- Specialty care refers to low-frequency, high-severity, high-acuity health events. The category includes surgery, cancer, infusions and specialty drugs, and rare diagnoses and treatments for health conditions.
- Specialty care accounts for nearly 50% of total employer healthcare costs. With the rising costs of healthcare, employers seek solutions to bend the cost curve.
- When care is provided in the appropriate setting with the right provider, you get the best possible outcome, while reducing the cost by about half.
What is Specialty Care?
Fyock kicked off the podcast by asking Zutter to define specialty care.
“Specialty care is the low-frequency, high-severity, high-acuity health events,” Zutter said.
“They’re the things that when a doctor tells you, you get a little bit scared. They are high cost-drivers for the employers, but represent a very small percentage of the overall health occurrences out there.”
Specialty care includes surgery, cancer, infusions and specialty drugs, and rare diagnoses and treatments for health conditions.
How Do Employers Provide Specialty Care Coverage?
For the past decade, the majority of employers have offered specialty care coverage through the traditional insurance model available to them.
“Most people have deployed more of a PPO or an open access network designed with respect to their broad health offering,” Zutter said. “Whether that’s through Blue Cross, United, Aetna, et cetera, there’s a broad open access network that allows for care through traditional deductibles, traditional co-insurance, traditional out-of-pocket maximums and referral pathways.”
An alternative to managing high-cost specialty claims is a COE model, in which employees travel to leading institutions, like Cleveland Clinic for cardiothoracic care or Sloan Kettering for oncology. Or, a derivative of that model was a travel medicine model where you fly someone to a place that offers high-quality care at lower costs, like the Cayman Islands or Mexico, said Zutter.
“Those were offered through carrier models and through independents,” Zutter said. “In both scenarios, you didn’t bend the cost curve and you didn’t generate substantial utilization.”
The Problem with Traditional COEs
The reality is traveling for care, even with a travel benefit, is not accessible to most people.
“If you’re going to drive a higher degree of adoption, you have to think from the mindset of the patient,” Zutter said. “The patient is focused on the practical elements of their care journey. Who’s taking care of the dog? Who’s taking the kids to and from school?”
And an underutilized benefit doesn’t save costs. With rising inflation, employers seek ways to reduce costs without having to pass additional burden to their workforce.
“If you can drive the engagement, then you’ll actually drive the results both through the cost curve and the outcome side,” Zutter said. “There’s substantial opportunity for unit cost reduction and there’s substantial opportunity for overall care cost reduction through quality and steerage.”
A New Specialty Care Approach
Lantern offers a new type of COE, referred to as a Network of Excellence. The network of physicians and facilities is 5X larger than any competitor, placing 98% of members within driving distance of their appointments. This nationwide network of top specialists working within a radically new economic model ensures the best rates for the best care.
“The models that are successful start with a patient-centric mindset,” Zutter said. “The patient is the North Star in the design of a product or solution.”
Sometimes, the most appropriate care truly is a flight away, especially for complicated cases, Zutter said. But many times, it’s close to home. Only 2% of Lantern members needed to fly for care last year.
“It comes down to dissecting which parts of care can be done in the community safely, effectively and efficiently and which parts require that safety net of the best and cutting-edge care,” Zutter said.
A specialty care solution offers a faster return on investment than many plan design changes.
“There are many other solutions out there that have really worthy causes around improving the health and wellbeing of the American workforce, but there’s a much longer duration to see the benefit,” Zutter said. “But specialty care is one that’s immediate. There are tangible tools that can be deployed that have immediate financial benefits, and improve the experience and outcome for the member, too.”
