While management teams wonder why their health care rates increased again and how much they’ll need to pass on to employees in the form of higher premiums, deductibles, and copays, some truly innovative leaders in the health care space are embracing bold solutions to reduce costs, improve care, and increase access to care.
Nick Stefanizzi, CEO of Northwell Direct in New York, says the current system has become unsustainable.
“Rates continue to go up and access to care diminishes,” he says. “Meanwhile, traditional insurance carriers have disincentivized employers from thinking differently. They use a lack of transparency and control of data to their strategic advantage.”
Northwell Direct has more than 22,000 providers and more than 50 hospitals in its network. It serves as a direct-to-employer alternative to traditional carriers and providers, operating as a subsidiary of Northwell Health.
Down south, LCMC Health is grappling with similar problems. The nonprofit hospital system is focused on providing the best possible care it can to every person and parish in Louisiana. LCMC Health provides a continuum of care from its Children’s Hospital and primary care to its Level I trauma center, geriatrics, and senior living.
While they’re thousands of miles apart, LCMC Health CFO JoAnn Kunkel echoes Stefanizzi’s sentiments regarding transparency in health care.
“There’s really no industry where you pay premiums to an insurance company that sits in between and contracts facilities for fees,” Kunkel says. “It’s not very transparent.”
A Perfect Storm of Rising Costs
The trend lines are moving in the wrong direction, Stefanizzi says. Every year, employers get another year-over-year increase from the traditional carriers when their renewal comes up. And every year, they are forced to pass along those costs.
“The carriers have created structural barriers to care because the cost gets passed on,” he says. “Employees ration their own care based on things like plan design and out-of-pocket costs. It’s not good. It’s not healthy. And it’s not sustainable.”
The pandemic has exacerbated rising costs and caused nearly half of Americans to delay care. A study from the Kaiser Family Foundation found that 48% of U.S. adults or their household members skipped or delayed medical care due to the pandemic.
Byron Stockstill, the AVP of business development with LCMC Health, says the health system sees quite a bit of variation in who gets care based on insurance coverage.
“What influences these decisions to delay or not seek care really rests with whether the person is insured,” Stockstill says. “The uninsured are most likely to delay care, but data shows insured people delay care, too, likely because they can’t afford their out-of-pocket responsibility.”
And all of that delayed care has a cost, Kunkel says, with other issues piling on top of an already difficult situation.
“Now we’re facing inflation, labor shortages, and supply chain issues,” Kunkel says. “And when you’re in a hospital providing care and surgeries, supplies are critical every day. We’ve seen prices increase astronomically. Masks that previously cost a few cents now cost dollars each. The same is true of labor — not only with registered nurses but also technical support.”
Rising costs certainly pose a barrier to care, but Stefanizzi says they also contend with issues like the lingering stigma of behavioral and mental health care as well as access issues such as distance and lack of coverage.
“As a culture and society, we’ve made progress,” he says. “However, there’s still a stigma, and employees remain concerned about what it means when they ask for that kind of help. How do we meet those individuals where they are in their comfort level, and how can we best protect confidentiality and privacy while making these services more broadly available?”
He explains that the New York metro area has a dense representation of health care providers. However, people living outside the city have to travel to see specialists, which makes access a challenge.
“In communities of color and economically disadvantaged communities, there are issues just accessing care, whether it be because of availability of providers or due to the fact that individuals may not have access to coverage,” he says. “We are driven to address these issues and have tried to be thoughtful about constructing a network of providers that’s bigger than Northwell Health that provides adequate, fair, and equitable access across our service area.”
Northwell Direct offers a tiered network strategy, with the tier-one network for an employer’s benefit plan in the Northwell Direct network consisting of more than 22,000 providers, 50 hospitals, and other sites of care. National supplemental networks are available to broaden the plan’s reach, allowing employees to access local providers outside of the New York metro area.
Kunkel notes that access can also boil down to not knowing what kind of care to seek or being unable to get an appointment.
“It’s really about being able to serve the patients and meet them where they need to be met, whether it’s a community clinic, a facility, or a virtual option,” she says.“The ability to do a video or phone visit has opened opportunities to reach patients and will continue to be built upon, regardless of whether we’re in a public health emergency or not. This will help improve access to some of the harder-to-get-to types of services.”
Bridging the Middle
There is no shortage of red tape in health care. But by working to eliminate middlemen, Northwell Direct has been able to strengthen the patient and provider relationship and remove some of the hassles typically associated with insurance companies (e.g., billing issues, costs).
“The rates that we’ve negotiated with providers have, on average, given employers the ability to save up to 20% compared to traditional BUCA plans,” Stefanizzi says. “After two years of pandemic-related financial and business disruption, we’d be remiss not to talk about the cost. A 20% savings opportunity is something that everybody should take very seriously.”
A direct-to-employer relationship makes it relatively easy for an organization like Northwell to offer other strategic advantages, Stefanizzi says. There’s no middleman between the employer and the provider, and nobody second-guesses the clinical judgment of a provider about what’s in the best interest of each patient.
“Our care management programs get higher levels of engagement than those rolled out by traditional carriers,” he says. “Why? I can send a nurse to the bedside to meet with you before you’re discharged from the hospital to make sure your transition care plan is set up and organized, that you understand it, and have a resource to help you navigate it as you leave the hospital. When my nurse practitioner calls, it’s on behalf of the provider about your care and not about an insurance billing issue. It’s a differentiated experience in addition to the pure financial savings.”
The team at LCMC Health is also focused on providing great patient experiences. Kunkel says the health system aims for an experience that is “beyond extraordinary.”
“We work with employers and several of the other payers in the market and have developed narrow-network products,” she says. “We are beginning to work through some of those strategies, but as we develop as a system, there’s a huge opportunity for ensuring that the employees are getting care in the right place. For example, going to the right kind of a physician or specialist or having an outpatient procedure versus inpatient. Population health opportunities include managing the whole patient experience.”
Stefanizzi notes that working directly with a health care system makes it possible to take the specific needs of an employer’s workforce into account. For example, Northwell Direct customized a unique primary care experience for Whole Foods.
“As you can imagine, food and nutrition as an organizational culture and value factor pretty heavily into Whole Foods’ thinking,” Stefanizzi says. “We worked with our primary care providers to create a more extensive primary care visit type with a greater focus on food and nutrition, ongoing health coaching, and some unique navigational capability.
“We can do that because we’re a provider organization that sits right across the table from the employer as the client and as the partner. You don’t get that from a traditional carrier’s middleman sitting between the two organizations.”
The Bottom Line
Kunkel admits the cost of health care is on everybody’s mind and is often the biggest barrier to patients seeking care. People might not understand the total cost of treatment — or what the patient’s share will be.
In these cases, health care leaders must help educate patients on the economics of paying for care, she says.
“Once you understand the financial piece, you can just worry about your health and not about how to pay for it,” Kunkel says. “Likewise, employers can work directly with the health care facilities to ensure that they treat your employees as special patients, every time they walk through the door.”
Stockstill says LCMC Health is partnering with Paytient to help its patients better access and afford the care they need. LCMC is subsidizing the cost of the benefit for employers in the region, empowering people to turn out-of-pocket care costs into affordable payments.
“It was an easy decision for LCMC Health,” Stockstill says. “Paytient allows our patients to pay for services at LCMC Health locations without any interest or fees via payroll deductions through their employers.”
Patients who are able to afford their care are more likely to get treatment earlier, Stockstill says, with earlier treatment leading to better outcomes.
“This helps them stay healthy, which in turn takes the strain off our healthcare system to provide care for those individuals who are uninsured or underinsured,” Stockstill says.
LCMC Health has teams that focus on population health, managing people’s care and ensuring they get to the doctor. Kunkel says sometimes the hardest part is encouraging patients to call in and ask questions they might have.
“How do we educate patients, ensure patient satisfaction and quality, and make sure that we’re communicating at every level?” she says. “That’s something we do every day that helps differentiate us.”
Kunkel stresses that nonprofit health care systems require funds to stay afloat and to reinvest in upgrading facilities, technologies, and treatments.
“To reinvest in the community that we serve, we must ensure that we’re spending our resources and investing in the right things,” Kunkel says. “Everyone has great ideas! How do you choose? For me, it’s always what’s best for the patients, how do we improve patient care, and how do we make it easier for our doctors, nurses, and staff every day? What things can we do to help them?”
Stefanizzi says some large employers have begun carving out pieces of their benefit plans by creating centers of excellence around orthopedic surgery or cardiac care or partnering with specific provider organizations to incrementally chip away at the cost/quality dilemma that employers face.
“We’re happy to work with employers in this way and certainly have all of the specialties and capabilities that would allow them to try some innovation without totally throwing out the traditional insurers,” he says. “But we have the opportunity to go bigger together and do something that can be truly transformational and a model for the country in how health care can be organized and paid for in the future.
“Why not? The conditions over the past couple of years coupled with the trend lines have created an environment where employers are finally ready to say, ‘You know what, let’s take that big swing, and let’s take on this problem in a fundamentally transformational way.’ That’s what we’re really excited about."