The Secret to Locating High-Value Healthcare Providers in America

A few weeks ago, I traveled to a client in a very remote part of the USA. The client, a self-funded government that operates its own self-funded health benefit plan and uses a third-party administrator (TPA) to process its claims and write checks from its self-funded, self-insured bank account. The TPA also leases them "discounted" access to network of providers in their local area and another subset of providers within a 200 mile drive. A 200-mile drive in a typical whiteout blizzard snowstorm is not an attractive option.

The TPA had proudly prepared a multi-page "confidential report" that highlighted claims spend on various procedures available through its extended network of designated "high-value" providers. The comparisons listed highlighted a knee replacement surgery done locally at USD $38,000 (of which the TPA received a percentage of revenues from the hospital as a "network participation" fee) so there wasn't much interest in reducing local prices because that would reduce their percentage.

Alternatively, the employer could encourage employees, dependents and retirees to access the so-called "high value" subset of providers, and it showed an unfair comparison of an example surgical case rate only. The true comparison figures of travel reimbursement, accommodation reimbursement, case management, and carved out aftercare back at the local hospitals and clinics for what remained of the 90-days follow up care at no additional charge that was included from the local provider without risk or cost of travel or accommodation, was not included in the comparison. That omission was an unfair depiction of the potential savings/value.

There was no real information about the subset of providers. No name, no reputation, no outcomes data, no testimonials or patient satisfaction scores. Nothing but an incomplete depiction of price differential to designate them as "high value", in the opinion of the TPA who gets paid a percentage of the high-value providers' revenues as well. Is that even ethical? Is it fair to the employer who already pays the TPA $830 per-employee-per-year even if they didn't process a single healthcare claim, and another $26 for "consulting assistance", and another $6.75 per-employee-per-year for "audit" fees?

Between TPA fees and actual claims expense reimbursement, my client had paid $5461 per-employee-per-year or $455 per-employee-per-month, or $106 per-employee-per week for each and every employee to have health insurance that paid for covered services for covered conditions. But that's not where it ends. The employees paid too.

Active employees and retirees paid $682.50 for a single person to as much as $2,175 each month for family coverage. Those separated from the employer who elected to pay out of pocket for continuation coverage paid slightly more per month.

All in all, that seems like a lot of money each month / each year for a pool of 770 combined employees, dependents and retirees and continuation coverage lives.

Let me ask you a few rhetorical questions about what you just read

1. If you were the local hospital administrator, would you be upset if the plan administrators and managers decided to offer the plan participants another option that involved driving right past your front door or flying over your roof to export that cash to another city?
2. Most hospitals use a revenue management software that includes a field to enter the name of the employer. That facilitates value tracking on customer lifetime value of the employer and its plan participants. Call up your head of revenue management and ask for a report of key employers in the community who are self-funded and have total freedom to steer plan participants toward you or away from you. The primary database sort should come off that employer field in your software. It should be a report that highlights each local employer and how much revenue came from them, how many claims were denied, paid late, appealed, and how much went to patient responsibility for bad debt due to unpaid copayments and deductibles. Oh, I see... your manager decided that the three seconds it takes to fill in that field in your software took too much time to enter. Gosh it must be nice to not have to care what you could lose in local business to a medical travel pilot program for your most lucrative surgical services. That single employer makes up 35% of the population! Oh, what's that? You care? Well, you have a strange way of showing it. Will you take time to draft a memo that instructs that 3 second data entry investment?
3. Drill down into that report a little deeper. What were the diagnosis codes that occasioned inpatient admissions and outpatient services? Which procedure codes drove the revenues, employer-by-employer? Which surgeons were involved? Should you make an appointment with the employers with the highest revenue impact risk to extend some extra attention and ask how your hospital might be of more value to them? You know that the first thing they will ask is if you can sharpen your pencil. But what else can you offer?

After direct observation over the past decade in the USA and more than 115 countries, I believe most hospital executives are at a disadvantage because they lack the details and numbers to inform creativity and strategy. They lack the basic numbers to self-analyze their cost and service delivery in a way that the employers and insurers view them. They lack insight about what the group health purchasers are contemplating in terms of future cost containment. And they lack the initiative to reach out with a solution to heap ease the pain associated with employers' claims spend that will retain local employer engagement and brand loyalty. Those hospital and clinic executives that have learned the value of this single software field as a powerful decision-support and innovation tool are rare and probably represent less than one percent of hospitals and ambulatory surgical facilities, worldwide.

Once the wheels of the locomotive start turning and the employer begins to develop a medical travel pilot program that flies revenues over the top of you or away from you via a driveable distance, you are no longer a contender for their most lucrative elective surgery cases. Here's why:

• At this moment in time, I can introduce that employer to about 43 accredited, safe, high-value alternative providers across the USA where the 8 knee surgeries would have saved the employer's health plan claims fund $192,000 with transparently-priced, bundled case rates, performed by board-certified, fellows in orthopedic surgery. We'd need to reduce the savings by the travel expense, so let's shave off $24K for airfares and hotel and incidentals for eight couples to travel by air and remain at the destination until the patient is fit to fly home. Will that employer be interested in saving $168,000 next year for the next 8 cases as their employees age and have more arthritis?
• The employer also paid for 5 back surgeries at $40,000 apiece. I can introduce them to a number of accredited, safe, high-value alternative providers across the USA where the 5 back surgeries that cost them $200,000 last year would have saved the employer's health plan claims fund $160,000 with transparently-priced, bundled case rates, performed by board-certified, fellows in orthopedic surgery. We'll reduce that amount by the $15K to travel 5 couples by air and remain at the destination until the patient is fit to fly home. Will that employer be interested in saving $145,000 next year for the next 5 cases?

One pilot program, two surgical procedures, to reduce the employer's expense by $313,000, (after travel costs and local aftercare) if utilization remains consistent or worsens with the next year's claims expense. Moving just 13 orthopedic surgery cases can reduce the employer's claim spend by $406 PER-EMPLOYEE-PER-MONTH after travel costs and local aftercare!

Once the wheels of the locomotive start turning and the employer begins to develop a medical travel pilot program that flies revenues over the top of you or away from you via a driveable distance, you are no longer a contender for their most lucrative elective surgery cases.

And the lost revenue to the local hospital administrator in this case? Just over half a million dollars.

Locating High-value Healthcare Providers

What to look for:

1. Price: Offers of fully-inclusive, episodic, bundled case rates in the specialties required by the employers' or insurers' populations that include everything but the airfare or travel cost to get there and travel meals. This includes telehealth for pre- and post-operative care continuity, therapies, implants and prosthetics, take-home medications, supplies and DME, home health visits at the hotel, all medical services other than the home-town diagnostic testing to establish a diagnosis and the evaluation and management services back home to monitor progress through discharge from care.
2. Quality and Safety: Providers prepared to share statistics that indicate a low incidence frequency of hospital-acquired and post-operative infections and other avoidable complications. Social media feedback scores across all platforms that average 3.8 or higher on a scale of 5.0.
3. Ease of Access: Easy, all-season, driveable destinations and flight itineraries that use full-size aircraft on routes with no more than two connections. Airports that utilize jet-bridge ingress and egress vs stairs or are equipped with hydraulic lifts for wheelchair travelers and those who cannot manage stairs.
4. Delegated credentialing: Providers prepared to accept delegated credentialing and privileging responsibility at no additional cost, and in accordance with certain accepted and recognized accreditation programs so that launch of the program operations can be accelerated.
5. Transactional readiness: a) case rates are defined at a CPT-code level, inclusively-priced, transparent bundles without lots of exceptions or exclusions; b) readiness to invoice on a single bill for all services other than flights and meals outside the hospital; and c) all non-employed providers and vendors under a service agreement as independent contractors that includes authorization to bill under the single invoice and be paid from the proceeds of the case rate by the case rate organizer. Understands that prudent plan administrators will be unable or unwilling to sign exclusive contracts and are ready to talk about doing business on the basis of 5-6 cases per year, to start.
6. Location: A friendly, welcoming community, regardless of rural or urban setting. Low crime, high-walkability, reliable internet service, adequately prepared for weather and moderate seismic events and other emergency preparedness.

My role as a consultant

I take pride in being a Unicorn in this space.

As a consultant to healthcare providers, I prepare them to enter health travel and develop and prepare their product, program, workflows, prices, and bundled case rates to be ready for the market place. I bring the insights from having worked with insurers and self-funded employers and the understanding of the limitations of the TPAs and ASOs across the nation combined with past work experience at the helm of health facilities and provider groups and clinical background as a former OR nurse.

As a consultant to self-funded employers, municipalities, county and state governments, and insurers, I understand cost containment and know what to look for, where to find the spending hot spots, and bring an unbiased shortlist list of providers ready for inspection and eager to help them save money through high-value health services procurement in any specialty.

Often, upon the agreement of all concerned, I use my knowledge of integrated health delivery systems development and operations (IPA, PHO, MSO, ACO), contracting, credentialing and privileging, case management, and 35+ years in health travel operations management, and specialized knowledge of ERISA and Taft Hartley regulations to act as a mediator between the parties to accelerate the process and help the payors start saving plan dollars and help the providers start earning revenues from new sources they would have otherwise never had the opportunity to attract.

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