Premier has launched a new company that looks to pair health systems and employers to reduce clinical variation and unnecessary care, the group purchasing and consulting organization announced Tuesday.
Contigo Health aims to leverage Premier's vast inpatient dataset to build on employers' existing health benefits packages. It will offer electronic medical record-integrated software to guide care appropriately as well as tap underutilized wellness programs for employees, executives said.
Thirty-five health systems, representing more than 440 hospitals, have signed letters of intent to participate. Contigo is also working with several large, self-insured national employers—one of which has more than 200,000 employees—which it expects to announce in the coming months.
"The time is now," said Dr. Jonathan Slotkin, Contigo Health's chief medical officer and a neurosurgeon at Geisinger. "Between the work we have done, the extreme leadership Walmart is taking in this space and the potential embedded in the work Amazon (and Haven) are trying to do have brought this to a sharp point. We think we need to roll up our sleeves and work with provider systems and employers who are ready for change."
Rising healthcare spending is fueling that urgency. It has outpaced gross domestic product growth over the last five years, reaching an all-time high in 2017, according to the Health Care Cost Institute's employee-sponsored healthcare claims data. Healthcare utilization only grew 0.5% from 2016 to 2017, but spending rose 4.2% while prices jumped 3.6%.
Total annual per-person spending has increased 16.7% from 2013 to 2017, rising from an average of $4,834 in 2013 to $5,641 in 2017—the highest mark since HCCI began reporting this data in 2009. That is an average annual increase of 3.9% compared to GDP's 3.1% average.
"Patients are getting expensive invasive treatments they do not need and not getting the preventative care they need," Slotkin said. "This is leading to increasing costs and significant decreases in quality in many domains."
Many have tried to reverse this trend, including heath systems and employers that contract directly. Walmart has a center of excellence program that flies employees with serious conditions to highly ranked doctors, finding that about half of its workers with chronic back pain did not need surgery. Amazon, JPMorgan Chase and Berkshire Hathaway have also formed Haven to try to come up with a smarter benefits package for their combined population of more than 1 million employees.
Ideally, Contigo can scale plans similar to the center of excellence model to bring them closer to where people live and work, executives said.
"We need to build a network so we can do this across multiple markets," said Steven Nelson, president of Contigo Health.
He said Contigo would work with employers' existing benefit structures, including those that have accountable care organizations rather than start from scratch.
"Center of excellence models work for some, not all," he said. "If an employer has employees across the U.S., they can be hard to deliver."
Contigo plans to start with more episodic care in areas like knee and hip replacements, back treatment and maternity care. The company eventually aims to expand into more chronic treatment related to primary care, behavioral health, cardiology, diabetes and oncology.
Premier has been growing its consultation business related to improving clinical operations, which will bolster the new company, Nelson said.
If an employee has a knee replacement, Contigo's software could provide real-time, evidence-based clinical guidelines and coordinate a weight-loss program already included in the benefit plan at discharge, he explained.
"Employers already have employee-assistance programs for nutrition, weight loss, smoking cessation and other ancillary benefits that aren't being utilized," Nelson said.
Pilot programs will kick off in January. Health systems will pay an annual fee, while employers will pay a program fee.