History

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Where We Began

The Employers’ Forum started as an informal discussion group in late 2001. The purpose was to determine how employers, working together, could improve the value received for their health care expenditures.

During the first 18 months, this employer group sought to determine why the current system of purchasing health care services was not working to the satisfaction of purchasers, providers or health plans.

These discussions led to the following observations on the dynamics of that system:

    1. Many studies reviewed by the Forum found that providers of service differ materially in their quality and cost results.
    2. There are few rewards for providers who render superior value along either the quality or cost dimensions. Since performance is not often measured at the provider-of-service level, superior performance cannot be rewarded. And providers also do not know how their quality or costs compare to others.
    3. There are payment related barriers to quality improvement. Many payment methods or policies do not support new delivery arrangements such as team-based care for chronic conditions or the implementation of effective disease management programs or clinical pathways. In fact, the implementation of effective programs to improve community health often leads to lower reimbursement for the providers who initiate these programs.
    4. When capitation is the form of payment, reimbursement systems often fail to properly adjust for differences in the health status of patients. As a result, excellence in the treatment of severely ill patients can lead to “adverse selection” and a financial penalty for providers perceived to be of high quality.Combining the above four points, it is difficult for providers to construct a “business case” for the investments required to develop or implement new processes (team care, disease management, care coordination, clinical pathways) or new technologies (electronic medical records, physician computer order entry systems, patient registries, electronic visits) that hold the promise of improving value.
    5. Employer purchasing activities have often led to unintended consequences. Most employers offer a limited choice of health plans to their employees and, as a consequence, choose to offer health plans that have very large provider networks. So the entire health plan network is represented by one quality report at the health plan level and one premium (or premium equivalent). In this structure, it is not possible for employees to select health systems based upon value, i.e., it is not possible for employees to become value conscious consumers. When employers do offer a choice among health plans to their employees, many contribute a percentage of premium for all plans, which materially lowers employee incentives to select the most efficient plans because the employee sees only a small proportion of the premium differential.
    6. Although Health Plans were at the forefront in introducing quality measurement, the beneficial effect of these changes has been limited. Part of the reason is structural, quality and performance is normally recorded only at the health plan level. But also, in most communities no payer has sufficient information to fairly and reliably measure performance (quality or economic) at the level of the individual or small group provider level.
    7. Finally, when larger deductible health plans first appeared, consumers did not have the pricing or quality information necessary to become rational health care consumers.

This discussion led to two decisions.

  1. No stakeholder can alone change the market characteristics that cause dissatisfaction with the current system. For this reason, on June 3, 2003 the Forum decided to broaden membership to include hospitals, physicians, health plans and public health officials.
  2. The Forum formally developed a goal and a set of principles to coordinate and focus the efforts of all parties.

GoalBack to top

The goal of the Forum is to improve the value received by employers and employees for their health care expenditures. Value includes quality, employee satisfaction and cost efficiency. The intention is to foster value improvement that is immediate, substantial and continuous.

PrinciplesBack to top

The principles include the following. All Forum members will work together to:

  1. Develop a system of purchasing health care services that differentially rewards providers for producing superior value. This means that performance, both quality and cost, must be fairly measured at the “system of care” level and superior performance must be rewarded.
  2. Embody this system of rewards in both insured and self funded programs.
  3. Fairly measure Health Plan performance and reward superior value.
  4. Identify payment related barriers to quality improvement and reduce or eliminate these barriers where possible.
  5. Identify new technology and programs that can improve value and promote their adoption.
  6. In addition, while fostering value improvement, the Forum should not seek to exclude qualified providers as a mechanism for promoting economic efficiency or quality improvement. The intention is to raise the value of services provided by all providers in the community.
  7. Employees must be provided with the information, choices and incentives necessary to act as informed consumers and these consumers must be responsible for the choices they make.

LeadershipBack to top

The Forum has been led by four wonderful chairman over its first 14 years:

Gregory Larkin, MD – Eli Lilly and Company (subsequently, State Health Commissioner)
Russ Towner – General Motors, Chrysler
Dan Rives – Indiana University
Denny Darrow (current chair) – Purdue University (previously, State of Indiana)

Brief Activities OverviewBack to top

In order to achieve its goals, the Forum has engaged in a number of activities, in addition to providing educational content.

Our earliest efforts were focused trying to make the market at that time function more effectively. A number of our employers offered employees choice among health plans. So we focused on:

  • Benefit issues that might cause adverse selection
  • Methods to measure acuity or illness burden among the health plans so as to facilitate fair competition among health plans
  • How employer contributions affected competition
  • Health plan designs such as high performance networks, quality reporting by health care system, and differential premiums by health system

As the number of employers offering multiple health plans declined, we turned our attention to other matters, including:

  • Electronic visits – in 2006, we spent considerable time exploring how we could promote the proper use of electronic visits. Employers and physicians were supportive but the technology was not yet ready for deployment here.
  • Price Transparency 2006 – as deductibles started to rise, we began discussions with the large carriers to promote price transparency – again, we were a little ahead of the technology curve.
  • Electronic prescribing – The Forum led a statewide group of employers, medical groups, pharmacies, health plans, PBMs, universities and many other organizations to promote early adoption of electronic prescribing. The purpose was to decrease prescribing errors. Over a period of 18 months electronic prescribing in Indiana moved from 33rd to 9th in prevalence in the nation.
  • Community wide quality reporting and pay for performance – We formed a coalition to promote the measurement of primary care physician quality. The program, called Quality Health First or QHF, was developed and managed by the Indiana Health Information Exchange (IHIE).
    • The idea was formalized in 2004 – Quality measurement at the level of the individual physicians combined with pay-for-performance.
    • IHIE raised funding (>$2 million) in 2006
    • The program went live in 2008 with Anthem as the lead pay-for-performance payer. United Healthcare later joined and the program eventually covered over 2,000 primary care physicians and 2 million Medicare, Medicaid and Commercial patients. This program was one of a very few that combined clinical and claims information to produce reports with credibility at the level of the individual practitioner.
    • The program ended in 2013 due to lack of funding
  • We reviewed the developing Accountable Care Organization (ACO) structures and participated in the development of the regulations for Medicare ACOs
  • We again explored team care reimbursement and found it to be wanting
  • The Forum promoted Value Based Insurance Design (via federal Beacon Collaborative grant)
  • We developed a wellness inventory and web site (Live Well Indiana) in conjunction with the Indiana Chamber of Commerce
  • We measured the effectiveness of existing diabetes management programs (with Beacon funding)
  • Kept current with Employer ACA responsibilities and the development of ACOs and Patient Centered Medical Home initiatives in Indiana

More recently we are:

  • Promoting the adoption of high deductible health plans in combination with HSAs, price transparency and, eventually, reference based benefits. The purpose is to provide the incentives and information necessary for employees to act as informed consumers of health care services and to reward cost sensitive providers. The Forum understands that price competition among providers will only occur if a significant proportion of patients act as informed consumers.
  • Sharing early results from employer on-site medical clinics
  • Exploring the development of a community-wide medication therapy management program
  • Revisiting (again) reimbursement for team based care in an environment where many physicians are now employees of health systems and ACO and PCMH reimbursement arrangements are more prevalent
  • Revisiting electronic physician visits in an era where technology supports this extension of care
  • Continuing education such as employer responsibilities under the ACA, Marketplace activities, wellness efforts and other activities that promote the goals of the Employers’ Forum.

by David E. Kelleher (February 2015)