Employer priorities shaping demand for value-based care delivered by health systems

Health systems are facing a number of factors that are significantly changing the industry, including emerging consumerism, expanding use of technology, regulatory complexity and disruptive competition. Out of all of this, the issues with a fee-for-service model within health care have become more evident, and in response, the value-based care approach has moved from concept to being implemented by health systems across the U.S. “The transformation to value-based care is well under way”, according to Michael Porter and Thomas Lee [i].

Which model will work best?

Private health insurance via employers accounted for 33 percent of total health care spending

While the movement to value-based care has momentum, there’s space for health systems to pursue different models that will allow them to compete while successfully pursuing the “triple aim” of health care. The Institute for Health Care Improvement originated the concept of the triple aim, which includes improving the patient experience of care (including quality and satisfaction), improving the health of populations and reducing the per capita cost of health care. Pursuing each of these aims can be done using a variety of approaches. So, how should health systems choose their approach to increase the value of care and successfully compete in the marketplace?

Along with health leaders’ examination of local market dynamics and their system’s relative strengths, a concentration on what payers are looking for is key for deciding which model is best. While the federal government funds a large portion of health care spending through Medicare and Medicaid, with clear directives issued to providers utilizing value-based care models, health systems also should look at another large payer segment – employers – to properly assess demand. In 2015, private health insurance via employers was “the largest payer of health care in the United States, accounting for 33 percent of total health care spending.” Understanding employers’ health benefits strategies and being positioned to meet their needs can be a key to success for health systems.

Three key employer priorities to help guide plan development

In Willis Towers Watson’s 2017 Emerging Trends in Health Care Survey, which represented 467 employers with at least 500 employees, a variety of U.S companies shared actions they’ve taken and are planning to take to design and implement progressive health care benefit strategies, combat escalating costs, and improve employee health and productivity. Employers’ priorities over the next three years show clear opportunity for health systems to implement attractive value-based models to cater to employers as plan sponsors.

Among the priorities that employers communicated through our survey, three of these stand out as areas that can best help guide the development of health systems’ value-based care programs.

Total Well-being

Comments in the Emerging Trends survey data indicate a desire to emphasize wellness as part of a “total well being strategy”

More than two-thirds of employers find employee well-being to be extremely important. Increasingly, employers are moving beyond a traditional health focus of well-being to also include other elements; including financial, emotional and social well-being. Further, qualitative comments in the Emerging Trends survey data indicated a desire to emphasize wellness as part of a “total well being strategy.”

While value-based care has one of its pillars in improving health and well-being, whether a health system sets up an Accountable Care Organization, Center of Excellence or a nearsite clinic, communicating the positive impacts of these models on total well-being is key. Demonstrating how a value-based model improves not only physical well-being, but other elements as well, would be valuable to a large majority for employers.

Employee Navigation Support

While developing value based offerings,  new forms of employee support are needed to capitalize on the business benefits. In particular, most value-based models require individuals to choose higher quality and/or lower cost providers. Employers are seeking improved employee navigation support. Over the next three years, almost half of employers note navigation support as an extremely important priority.

While there is stiff competition when it comes to quality of care and cost, health systems that can integrate navigation support into their offerings will set themselves apart from the pack with their value-based offerings.

Health Care Access/Delivery

Many employers are prioritizing health care access/delivery over the next three years (57%  said it was extremely important), and are evaluating delivery options. New delivery models include telemedicine, onsite/nearsite clinics, Accountable Care Organizations and direct contracting. These options not only each have strengths that can improve health and cost outcomes if selected and implemented appropriately, but create improved employee engagement and perceptions of value of the employers’ benefit plans. Health systems that can clearly articulate a strong value proposition for employers for new delivery models will have an advantage.

[i] “The Strategy That Will Fix Health Care”; Michael E. Porter and Thomas H. Lee; Harvard Business Review, October 2013

Anne B. Martin, Micah Hartman, Benjamin Washington, Aaron Catlin and the National Health Expenditure Accounts Team

National Health Spending: Faster Growth In 2015 As Coverage Expands And Utilization Increases
Health Affairs published online, December 2, 2016 


This post was co-written with Peter Bresler. Peter is a Health System Consulting Practice Leader at Willis Towers Watson.

About Jessica Jones Thorne

Jessica Jones Thorne is the Operations Manager for Willis Towers Watson’s Health System Consulting Practice, base…
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