Mercer Tools Support Value-Based Health Care Strategies

Mercer has launched a suite of solutions to help employers navigate the growing market for value-based health care.

Molly Loftus, chief actuary for health and benefits at Mercer in Hartford, Connecticut, explains to PLANSPONSOR that value-based care is a term used by health care organizations (HCOs) and accountable care organizations (ACO) to describe a financing mechanism by which health care providers earn incentives for managing costs and improving quality of care. A portion of the revenue stream that goes to the provider system goes into a pool of funds for paying these incentives. Traditionally, providers have been paid incentives based on how many times they do a procedure and how complicated the procedure is.

According to Mercer, many employers with either fully insured or self-insured health care plans are already participating in value-based care, whether they realize it or not. All major insurance carriers have agreements with value-based care providers, and employers under self-funded arrangements are seeing these new care coordination fees and shared savings fees deducted from their bank accounts. Therefore, since employers are already paying for value-based care, they should make sure they get the greatest benefit for their organization and for their employees, the consultant says.

Loftus explains that employers could take the “do-nothing approach” and let employees choose between either providers that are getting value-based care incentives or those that are not. But, even if the employer and employee don’t realize that a provider is a value-based care contracted provider, if the employee uses that provider it could result in incentives or care coordination fees being paid out of employer’s bank account. The other option is to limit employee access to just those providers that are contracted. Loftus warns that not all insurance carriers allow steering of participants to those providers.

Using proprietary and  industry data as well as innovative technology, Mercer has developed a way to help employers assess what value-based care approaches are right for them, what opportunities exist in key local markets to support these approaches, and how to implement and communicate appropriately with the target employee populations.

Loftus says the tools help employers understand their different options. Mercer collected 75 different elements for every health care delivery system, including governance, strength of financial incentives, clinical programs to drive quality and cost, and whether they offer expanded access to alternative medicine.

Employees have specific needs, and employers can identify those needs and what each delivery system is doing to address them. For example, if an employer in Seattle has a number of employees needing a certain procedure or who are at risk for needing it, the employer can use Mercer’s tools to determine the ACO opportunity in Seattle for that specific procedure. “Health care is not practiced nationally, it is practiced locally—it is more efficient in certain markets,” Loftus says. “When employers think about strategies, they should think about the ‘hot spots’ because that’s where the opportunity lies to bring in sophisticated health care solutions. A high-efficiency market will reduce costs.”

Mercer’s suite of value-based care solutions includes:

• Mercer Health Care Value Finder – an iPad app that helps identify ‘hot spots’ by market and then aligns available value-based care models to each to help clients define their opportunity market or markets;
• Mercer Map Your Course – a Q&A assessment that helps map the value-based care starting point for a given employer;
• Market Profiles – market by market ‘deep dives’ that describe the opportunities and challenges of implementing value-based care in a particular location in terms of care hot spots, marcro-economic dynamics and available care models; and
• Market Action Map – an outline of activities needed to take place in order for an employer to finalize and execute a given value-based care strategy.

In addition to these resources, Mercer has created a comprehensive summary of the national carriers’ value-based care strategies and approaches along with RFP, communications and measurement support tools.

More about Mercer’s point of view on value-based care and the related solutions offered to clients is on the firm’s website.