Some Madison-area companies are planning a new twist in employee health care: offering cash incentives — even travel costs — to workers who go to doctors and hospitals that rate high in quality and low in cost.
The Alliance, a group of 180 companies that purchase health care together, is developing a program to steer its 80,000 workers and dependents to medical providers in Wisconsin and neighboring states that meet quality and cost criteria.
A few Wisconsin employers, including Manitowoc County and Serigraph in West Bend, have taken similar steps. Wal-Mart Stores Inc., Lowe’s and a California business group said this month they will let workers get knee and hip replacements for free at four medical centers around the country — or pay routine costs for the procedures elsewhere.
The Alliance program, supported by the Business Health Care Group in the Milwaukee area, could transform such efforts in the state.
Alliance members will encourage workers to go to select providers for knee, hip and heart bypass surgeries and angioplasties beginning in 2015, said Cheryl DeMars, president and CEO of the Alliance. The program, called QualityPath, could expand to other high-cost elective procedures, DeMars said.
“Our employers carefully source everything else they buy for their business, but they haven’t been able to provide that same scrutiny to health care,” she said.
Incentives could vary but likely will include cash rewards or lower or no out-of-pocket costs for workers who go to the preferred providers, she said. Travel costs could be reimbursed for patients and caregivers.
Doctors and hospitals throughout Wisconsin and in parts of Illinois, Iowa and Minnesota will be evaluated on criteria such as complication rates, and the results will be made public, DeMars said. The Alliance plans to use its substantial market share to negotiate low prices with willing providers who meet the quality criteria, she said.
The program could send Madison-area patients elsewhere for the procedures or bring patients from other regions here, she said.
Dr. Gail Amundson, hired by the Alliance this year to work with doctors to develop the quality criteria, said one factor will be whether patients need the procedure. “We know that is not always the case,” Amundson said.
Dr. Jonathan Jaffery, medical director for delivery system innovation at the UW Medical Foundation, part of UW Health, said he supports the effort to improve the quality of care but is concerned about what criteria will be used.
“We want to make sure they’re not only going for the lowest cost but also for high quality,” Jaffery said.
Colony Brands, Lands’ End, Park Bank, Stoughton Trailers, Trek and Webcrafters are among the Alliance members that have pledged support for QualityPath, which will be voluntary. The Alliance also includes Cuna Mutual Group, Kwik Trip, Promega, Woodman’s Markets and other companies that self-insure their health care benefits, paying claims directly instead of buying insurance.
Jennifer Pagels, human resources director for Trek, in Waterloo, said wellness programs such as health screenings, fitness classes and an onsite clinic have improved employee health and curbed medical costs to some extent.
But “we have hit this wall,” Pagels said. QualityPath “will hopefully reduce the cost of procedures that make up a big chunk of our health care expense.”
Manitowoc County has saved more than $130,000 this year by steering its 1,100 employees and dependents to preferred hospitals and clinics as far away as Milwaukee, said Sharon Cornils, personnel director.
Patients who go to preferred providers have no co-payments, Cornils said. Those who go elsewhere pay $300 for tests such as MRIs, $500 for outpatient surgeries and $850 for inpatient surgeries, she said.
Next year, the inpatient and outpatient co-payments at non-preferred providers will be $2,000. “We need to do more to try to capture those savings,” Cornils said.
Serigraph offers $250 to $2,000 to workers who select high-quality, low-cost providers for elective procedures, said Linda Buntrock, senior vice president of HR. The program saves the company, which has about 550 workers in Wisconsin, about $70,000 a year, Buntrock said.
In 2008, Serigraph told employees they could get expenses-paid trips to India for joint and back surgeries, where the procedures are much cheaper than in the U.S. But nobody signed up and the program was dropped, Buntrock said. A similar program allowing workers to travel in Wisconsin or other states for the procedures has had just four participants since 2006, she said.
“Most people find it difficult to travel more than 50 miles from home to get medical care,” she said.
The Business Health Care Group, which includes more than 100,000 workers at Milwaukee-area companies, is interested in using the QualityPath data to improve the performance of providers that don’t meet the quality criteria, said Diane Kiehl, executive director.
Wal-Mart, Lowe’s and the Pacific Business Group on Health are directing 1.5 million employees and dependents to four places for knee and hip replacements: Johns Hopkins in Baltimore, Md.; Kaiser Permanente in Irvine, Calif.; Mercy Hospital in Springfield, Mo.; and Virginia Mason Medical Center in Seattle.
Workers will have no cost for the surgeries at those centers. The companies will cover travel, lodging and living expenses for patients and caregivers.
“Each of these providers has a proven record of practicing evidence-based medicine with above-average positive patient outcomes,” Sally Welborn, senior vice president of global benefits at Wal-Mart, said in a statement.
The Alliance and other groups in Wisconsin have rated the quality of care at clinics and hospitals for years. But merely sharing the information with workers or publicizing it hasn’t had much impact on patient choice, DeMars said.
“If this is working at all, it is working way too slow,” she said. “We think the missing element is us. As employers, we have not done enough to drive change using cost and quality information.”
[Editor's note: This story has been updated to reflect a correction. The Business Health Care Group might use data from the Madison-based Alliance to educate patients about high-quality, low-cost providers, but its members don’t plan to use incentives to steer patients to the providers.]