Employers: It’s on Us To Tackle Care Costs

Frank Diamond

When you call yourself the Health Transformation Alliance, you better bring some game. But lack of confidence will never be an issue with the 25 major corporations that have recently banded together in an effort to bring health care costs down.

Verizon, American Express, Macy’s and other members provide coverage for some 4 million people, and they plan to share data about spending and outcomes in the hopes that pooled information might be able to stabilize costs. Most big companies self-insure, and alliance members want to build a firewall against rising care and medication costs. They came together in February and, last month, appointed Glenn Steele, MD, the former CEO of Geisinger Health System, as the alliance’s vice chairman.

“Employers are the ‘sleeping giant’ in health care because, if they act together, they can successfully deliver higher quality results at better costs for employees,” Steele said in an alliance press release.

Sally Pipes, president of the Pacific Research Institute, a California-based think tank, calls the alliance a “worthwhile experiment” in which members could “leverage their collective purchasing power to negotiate better deals with health care providers.”

In an opinion piece April 4 in Forbes, Pipes wrote that government has largely failed to rein in health care costs. “The private sector will have to take matters into its own hands and find ways to creatively deploy market forces to its benefit,” Pipes wrote.

The alliance envisions a three-pronged approach. First, the companies will need to examine health care data the way they examine sales, or operations data. “The hope is to determine which providers are delivering the best care at the lowest cost—and then to direct workers toward these high-performing providers,” wrote Pipes. The alliance members will also need to pool their buying power to work out better deals. And finally, they’re aiming to educate employees. Most consumers are clueless about buying health care and they may welcome a nudge from an employer toward a high-quality, low-cost clinic or provider, wrote Pipes, and “if it saves their bosses some money, all the better.”