Power in Numbers

Big data insights, lower costs and quality outcomes are among the goals of a new employer alliance that's focused on healthcare.

Monday, March 7, 2016
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Twenty of the nation's largest employers have joined forces to capitalize on their collective leverage and extensive data resources to tackle the cost and quality conundrums of their employer-funded healthcare programs.

Big names such as American Express, du Pont, IBM, Macy's, Verizon and others have signed on to the Health Transformation Alliance, which plans to analyze healthcare costs and aggregate patient-outcomes data based on a collective 4 million employees, their dependents and retirees.

The concept grew out of discussions with large employers involved in the two-year-old American Health Policy Institute, says Tevi Troy, founder and chief executive officer of the Washington-based institute, as well as executive vice president for Public Policy for the New Alliance.

The not-for-profit alliance aims to discover ways to reduce redundancies and waste in the multilayered healthcare-supply chain, as well as give alliance members greater leverage for how they obtain coverage for their workers, as the organizations now reportedly spend a collective $14 billion annually for healthcare.

Alliance members will "use their collective leverage and the data from the millions of lives that they cover in order to help lead the way to a better system," Tevi says. "[The alliance] also addresses the concerns of spiraling healthcare costs to employees -- deductibles, co-pays and premium hikes that are a real challenge to many employees, even at some of the largest firms that have the most robust healthcare packages."

American Express Chief Human Resources Officer Kevin Cox was instrumental in bringing many other companies on board. In announcing the alliance in early February, Cox said "the current system is unsustainable and it costs our employees too much. Even the most successful companies won't be able to afford the rising costs of healthcare in the not-too-distant future." American Health Policy Institute study showed that, by 2020, more than 37 percent of private-sector employees may face an average family premium and deductible above 9.5 percent of their income, which the U.S. government defines as the maximum affordable healthcare cost. By 2025, 53 percent of employees may face unaffordable healthcare costs, creating a significant problem for employees and employers alike.

The alliance is headed by CEO Robert "Rob" Andrews, the former U.S. representative from New Jersey who was instrumental in developing the Affordable Care Act, and President Jeffrey C. McGuiness, who is also CEO of the HR Policy Association. The first of the alliance's four primary goals is to pool resources and expertise to gain leverage and greater marketplace efficiencies; the second is to learn from data what best treatments, good outcomes and cost reductions are possible.

The other two goals are to develop better tools to educate employees about which healthcare choices will result in better outcomes, increased savings and more satisfaction with services; and, finally, to change costly and inefficient pharmaceutical purchasing and contracting systems that don't deliver better healthcare results.

Troy, former deputy secretary of health and human services in the George W. Bush administration, notes that a key part of the strategy will be to capitalize on the "expertise of very smart benefits managers and human resource executives" at America's largest companies.

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"There have been talks about employer coalitions and use of data before," says Troy, "but I don't think anyone has put it together in a coherent three-part strategy [like] we have. And I don't think anyone has put together the level of companies that we have committed to this."

While evidence-based medicine is a frequent conversation for healthcare providers, especially with Medicare's increased focus on patient outcomes and value, the alliance members can now weigh in on the conversation, based on the aggregate data their employees' healthcare experience is showing.

The large employers are also keen on learning about the data innovations taking place in healthcare and accessing some of the lessons themselves, with hopes that they can integrate approaches into their own programs.

The alliance's initial project this year and early next is to collect and analyze the data from members. A pharmaceutical initiative is planned for next year, and the alliance plans to address medical networks in 2018. Also, expect to see expansion of the alliance to include other interested large employers with about 10,000 or more employees.

While the alliance itself will not issue any reports, the American Health Policy Institute may develop studies and white papers based on the lessons gleaned from the initiatives, Troy says.

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