It's not just Amazon: Employers are turning 'activist' when it comes to healthcare

Amazon, JPMorgan and Berkshire Hathaway have grabbed the headlines in recent months by becoming the employers to finally disrupt healthcare.

But while hospital executives have said they believe that particular effort has the greatest chance of actually making an impact, experts said it's just one example in a broader groundswell among large employers taking a more "activist" role in their healthcare than ever before.

There are a lot of employers poised to push the U.S. toward necessary changes in its healthcare system, Health Transformation Alliance CEO Robert Andrews told FierceHealthcare in an interview. Launched as a co-op in 2016, the HTA represents more than 40 large companies including Shell, Verizon and Macy's, covering more than 6 million lives and spending $25 billion a year on coverage and benefits.

"In an economy of one and a half to 2% inflation, healthcare costs are rising at a minimum of 4% and usually 5 or 6%," Andrews said.   "In that environment, where companies known they bear all that risk and costs are rising and results were at best stagnating? Yeah, of course they said we need to do something about this."

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A recent National Business Group on Health (NBGH) survey of 170 large companies found employers that projected their healthcare benefit costs are expected to rise about 5% for the sixth year in a row, reaching $14,800 per employee in 2019 compared to the $14,099 employers project in costs per employee in 2018.

The survey also found that more companies are seeking to double down on driving delivery system changes, using narrow network delivery models such as accountable care organizations, direct contracting and high-performance networks to shift healthcare costs. Nearly 60% plan to use these strategies by 2021. Seven in 10 responding employers said they believe "a new entrant from outside the healthcare industry is necessary to disrupt the market in a positive way," compared to 10% who disagreed.

"Employers would like to cover more value-based services and provide a higher level of coverage," said NBGH President and CEO Brian Marcotte during the survey's release last month. "Whether it's chronic condition management or preventative services or Centers of Excellence, there is a real opportunity to get back into design based on value."

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Of course, there are still plenty of healthcare players seeking to create their own widespread disruptions. Last week, concierge-style primary care company One Medical announced a $350 million investment from Carlyle Group to expand its footprint nationwide. It's CEO Amir Rubin told CNBC the company's goal is to cut healthcare costs by 10% in the U.S.

But employers have been seeking more direct ways to influence the value of care, with companies like GM seeking to ink direct contracts for healthcare or simply invest in ways to offer primary care themselves, as Amazon reportedly plans to do at its Seattle campus.

The trend has catapulted companies like California-based Crossover Health, which launched in 2010 to help large employers provide onsite health services to their workers. They've built a roster to include companies like Apple, Microsoft and LinkedIn, recently reporting their 1 millionth patient visit. 

LinkedIn began working with Crossover in March 2017 and now provides primary care and other preventative services to LinkedIn's Silicon Valley Area employee population through a network of four near-site facilities, said Nina McQueen, VP of global benefits and employee experience in an email to FierceHealthcare. 

Crossover also provides physical therapy, behavioral health services, acupuncture, massage, chiropractic care, vision care and health coaching to LinkedIn employees. She declined to comment on the number of employees participating or the financial impact of working with Crossover.

"The clinics are extremely convenient for our employees, and we couldn't be happier with the results," McQueen said in an email to FierceHealthcare. "I can say without hesitation that the service is working extremely well, our employees love it, and their health and wellbeing is moving in a positive direction." 

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Since organizing just two years ago, HTA estimated it has been able to save its members $800 million in pharmaceutical costs.

But recently, it announced a new partnership with software-as-a-service company Welltok to serve as a common data warehouse for its members' aggregate healthcare data. That data warehouse will allow them to clearly identify the most and least impactful programs across the employee base such as what is working for new moms, what is better for employees in urban environments compared to rural areas. 

"The new partnership is all about finding out what works and what doesn’t," Andrews said. "Healthcare is really expensive for people and their employers and government and everybody else. And a big driver of that expense is chronic illness. A lot of chronic illness is the result of behavior."

While it has been difficult to measure return on investment on employee wellness programs in the past, this sort of shared database changes the game, Andrews said. 

"Up to date you haven’t been able to measure them effectively," Andrews said. "Imagine playing fantasy football and you didn’t know what Tom Brady’s stats were. Working with Welltok and our database—which is IBM Watson—we can keep score and educate people about what works and what doesn’t or quite frankly, quit paying for what doesn’t work."

There isn't an expectation that the second day a person is in a weight loss program, they'll lose 5% of their body weight. But when employers of this scale are involved, the little changes add up, Andrews said.

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For example: For every 1,000 employees with Type 2 diabetes of a certain demographic, an employer may typically expect to have 15 employees experience strokes or heart attacks in a year, but by using data to guide interventions they might cut the overall incidence of heart attacks per 1,000 people to 11, which would have a positive impact on employees and their employers' bottom lines.