Just a couple of months into a newly focused effort to contain the costs of healthcare coverage for its employees, Summa Health System in Akron, Ohio, already is having preliminary conversations with other employers about how they can do the same.
“They're all very interested, I would say, and anxiously awaiting to see how this works,” said Mark Terpylak, president of NewHealth Collaborative, Summa's accountable care organization.
The steps Summa is taking—from specialty disease management programs to embedding an employee-dedicated nurse in its network—have been a couple years in the making. Some changes in that time have led to “fairly small” cost increases in the 4% to 5% range, Terpylak said, but he wants to see that fall to zero.
Through a holistic approach started Jan. 1, Summa aims to completely flatten its health care costs this year.
About 90% of employers face increases in the premiums they pay for employee health plans, according to the 2015 Arthur J. Gallagher & Co. Benefits Strategy and Benchmarking Survey. And with nearly one in four companies seeing double-digit rate increases, employers are searching for ways to keep those increases in check. Hospitals are not immune to the rising costs of providing their employees with health care coverage. And some see their approaches to flatten costs as translatable to other businesses.
The Cleveland Clinic already has commercialized its wellness offerings and is considering doing the same with its benefit plan design, which has saved the Clinic about $75 million since 2010, said Paul Terpeluk, medical director of the Clinic's employee health services.
University Hospitals began offering commercial ACOs after seeing success with such a model for their own employees, said Nate Hunt, UH's ACO director.
“I think employers today are struggling like everybody, right?” he said. “Healthcare costs are unsustainable, and they need help managing those.”
Terpeluk said hospitals may not be the best place to find these new approaches, with a lot of energy focused on other regulations and requirements. Many haven't taken the time to step back and focus on employee costs, he said, adding, “It's an afterthought right now.”
Rick Chelko, president of The Chelko Consulting Group of Westlake, Ohio, which consults large employers on health plans, also questioned hospitals' ability to find solutions to the soaring costs of benefits and blames increasing access — from telemedicine to more emergency rooms — for rising costs.
But those who do address the issue in creative ways could have successes, he said. It's much easier for hospital systems to try certain tactics than it is for an employer with hundreds of locations across the country.
Others note that hospitals have some flexibility to fine-tune approaches and tweak programs to find what works best.
Terpylak said it was time for Summa to translate what it applied to its Medicare ACO to its own employees.
“We've realized we've kind of had some success and feel a little bit more comfortable in the Medicare space,” he said. “But what is it we can do for commercial populations? How do we prove that out? How do we refine it? How do we evolve it? And frankly, there's no better way to do that than with our own associates.”