The Healthcare Transformation Alliance formed in 2015 to address increasing healthcare costs for private employers.
By Jenna Hughes
While private insurance covers many working Americans, public programs such as Medicare and Medicaid account for the majority of healthcare utilization in the U.S. In contrast, employer-provided health plans represent a significant share of healthcare spending and revenue for insurers, meaning employers often subsidize the healthcare system without directly benefiting, even as their costs continue to rise.
To address rising healthcare costs for employers, the Healthcare Transformation Alliance was formed in response to a 2015 Call to Action by the American Health Policy Institute, which indicated that employers were ready for a new approach to securing better health coverage for their employees. That year, four founding members came together to create a cooperative, establishing an alliance focused on developing an employer-centric healthcare model.
“Formed 10 years ago by four companies including American Express, Macy’s, Caterpillar, and Verizon after sharing the view that they were paying too much for healthcare and not getting the quality they were looking for; the Alliance negotiates high-value care at favorable terms,” said Robert Andrews, CEO of the Healthcare Transformation Alliance (HTA).
Now, a cooperative of more than 75 large U.S. companies with self-insured health plans, HTA represents more than 5 million people in the U.S.
“These companies felt that by coalescing their bargaining power and their data and growing into a larger Co-Op, they’d be able to make a change,” said Andrews. “Our most active members have seen a trend over the last five years of about two and a half percent in a market where the trend had been eight, nine or ten percent.”
A decade after its formation, HTA continues to work to negotiate the rising cost of healthcare, a top concern among employers and employees by targeting existing practices in the supply chain so healthcare costs for employers don’t spiral further out of control.
“With members across the U.S., we are disrupting the healthcare status quo to drive better health outcomes for employees and their families covered by self-insured employer health plans,” said Andrews.
Data driven healthcare
Hospitals and supply chains have an inherent conflict of interest in sharing market information publicly, said Andrews, which has for many years resulted in the healthcare sector lacking the kind of market information necessary for employers to make informed decisions.
“Imagine if you were in the market to buy the best used car, and you didn’t know how a Honda stacks up next to a Toyota, but you also didn’t have a convenient service such as Kelly’s Blue Book to see what used cars are really selling for. Or imagine the real estate market without Zillow.com,” said Andrews. “In these cases, the consumer wouldn’t be able to do a very good job buying a high value used car or a house.”
Harnessing the power of data is essential to fixing a broken healthcare system, according to HTA. Combined data from each HTA member company provides insights into the fluctuating value of health insurance far beyond what a single company can produce on its own.
“Without the HTA data platform, it’s not really clear in the healthcare industry where employers should get this crucial market information,” said Andrews. “So, what HTA is trying to do is find a way that our consumers, the patients, are able to have better insight into the healthcare market.”
HTA has gathered over 5 million lives worth of data, with numbers going as far back as five years in the HTA data aggregate – a tool that the organization uses to determine and identify high-value care versus low-value care.
“The Healthcare Transformation Alliance collects data from our members and then negotiates agreements with providers to supply high value care at favorable terms and conditions because of our size,” said Andrews. “Active members have achieved better results, lower costs and reduced readmission rates, and have done so at a significantly lower cost.”
HTA’s unique, aggregated data tracking provides immediate, actionable insights to optimize its self-insured employer benefits strategy.
“HTA Members’ healthcare benefits are more effective and affordable because we improve the quality and efficiency of care for their employees and their families through data,” said Andrews. “Every employer shares the goal of wanting the best care at a fair price. You can’t define either one of those if you don’t know the market, and you don’t know the market without data.”
Healthcare insurers and innovation
The U.S. healthcare landscape has undoubtedly shifted in the past decade, especially for employers. As time has gone on, there has been a greater call for transparency from insurers and healthcare providers.
“As public programs expand, the troubling shift in the past decade has been that more costs are being passed through to commercial payers and as a result there is less competition among providers,” said Andrews. “When you combine consolidation of hospitals and insurers with the expansion of public programs, it results in more cost shifting toward non-government payers like employers and commercial health plans.”
At the same time, Andrews said that a positive shift for employers looking for more affordable healthcare options is the pace of innovation within healthcare.
“Out of every problem comes an innovation – because there is the problem with rising cost and stagnant quality, you get innovators that come along and try to address these needs with effective, thoughtful solutions in the marketplace to address issues in diabetes management, behavioral health, drug adherence, musculoskeletal health and much more,” said Andrews.
In fact, HTA reported a 21% lower total cost of care for highly engaged members versus the HTA risk-adjusted benchmark, as well as 25% fewer readmissions and 6% fewer complications for highly engaged members versus other HTA cohorts.
Therefore, a collaborative model between employers not only enhances market-related data collection but also serves to further accelerate ongoing healthcare innovation.
“The simple answer as to why a cooperative model between employers works is scale. There are innovators who have come along that do a good job of advising patients, such as steering patients away from unnecessary surgery, for example,” said Andrews. “We are market makers for the innovators, because we aggregate lives and revenue opportunities, and if they’re good, and they do in fact deliver high value care, then we contract them.”
Data improves health outcomes
HTA has reported notable and significant improvements and success stories for its member employers that have meaningfully improved their employees’ health outcomes.
“A very large financial services company asked us to look at how they were doing on cancer care and total remission rates,” said Andrews. “For example, typical rates across our market show that total remission for cancer occurs about 40% to 60% of the time. This specific company, however, had a 62% total remission rate.”
HTA looked at the financial services company’s market for spending, and found that they were in the 50th percentile, meaning that they were not necessarily spending more funds than others on cancer care.
“The way they achieved this number was by replacing their carrier with what’s called a third-party administrator, which is a cooperative to help them innovate,” said Andrews. “Working together, their innovations largely focused on patients getting screened for cancer earlier and more often, as early screening is the key to detection and remission.”
“Imagine saying at this moment, which this particular financial services company can say – that if you work for us, and God forbid you get a malignancy, you’re about 50% more likely to survive,” said Andrews. “They did it without spending a lot more money.”
Another example of HTA improving health outcomes with the use of data aggregation was in behavioral health – patient concern about behavioral health have been shown to have increased among patients in recent years and has been exacerbated by the impacts of the COVID-19 pandemic. Despite an increasing need for behavioral healthcare, for many patients, it can take up to seven weeks to be seen by a provider.
“With the issue of long wait times to be seen by a behavioral healthcare provider in mind, we were able to work with a partner of ours to build a network of 6,000 psychologists, psychiatrists, and mental health professionals to reduce the wait time from six to seven weeks to five or six days for non-emergency behavioral health cases.”
When HTA looked further into data on the patients that utilize the new behavioral health system, the instances of patients needing emergency room visits or being checked into hospitals for behavioral health related claims were considerably lower.
“So, there’s a success story in behavioral health for us in that people who are depressed, anxious or otherwise in distress got seen earlier by competent, well-trained professionals,” said Andrews.
Technology and emerging health models
Andrews said that the biggest opportunity for employers to continue to meaningfully improve their employees’ health outcomes is through the implementation of emerging technology.
“We’re on the verge of a revolution in the way healthcare is delivered because of AI. I see healthcare evolving in a way where getting information about your healthcare and making choices will become more organic and native,” said Andrews. “I think there’s an opportunity going forward for employers to spend less money through the intelligent, ethical use of AI to achieve better health outcomes.”
With ongoing consolidation among both health systems and insurers, it is necessary for employers to stay current in their understanding of technology innovation and market changes to maintain their negotiating power.
“Even if a company has a lot of negotiating power, if there is not a general understanding of the market, employers won’t know if they are getting a good deal or not,” said Andrews. “If employers believe $5,000 for a procedure to be a good price, but the rest of the market is paying $3,500, then they did not actually get a good deal, so keeping up with the changing market is important.”
When employers come together to negotiate, they are more successful than when they do not – collective negotiation allows employers to share data and leverage best outcomes going forward.
“With growing consolidation among healthcare providers, it is more important than ever for employers to coalesce. There is power in numbers,” said Andrews. “Where there is oligarchy or monopoly within the healthcare system, employers must look for alternatives, and technology has the power to introduce competition where it otherwise might not have existed because of market condition.”