Without Direct Employer Action, Alternate Health Care Delivery Models and Payment Reform May Stall at Current Levels: Aon Hewitt and Catalyst for Payment Reform

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Dec 18, 2014, 08:23 ET

LINCOLNSHIRE, Ill., Dec. 18, 2014 /PRNewswire/ -- A joint pulse survey between Aon Hewitt, the global talent, retirement and health solutions business of Aon (NYSE: AON), and Catalyst for Payment Reform, an independent, non-profit employer coalition pushing for better value in U.S. health care, shows that while employers find alternative provider delivery models and payment reform attractive, most admit they do not understand them or the value they provide. As a result, they may miss a significant opportunity to lead and improve results (health and financial) for their workforce and business.

According to the soon-to-be-released joint survey of more than 220 companies:

75 percent do not understand payment transformation models
51 percent do not understand the cost and quality data provided by their carriers related to new models like Accountable Care Organizations (ACOs)
71 percent are either unaware or need to learn more about the attribution process and how they are directly contributing to the payment of these new provider delivery models

Despite their lack of understanding of the models, the survey showed 60 percent of companies are providing or are considering providing a financial incentive for employees and dependents to use these new models through plan design changes, narrow network options, HRA/HSA contributions or cash.

"Employers have the potential to be one of the strongest voices in driving systematic change, but if they don't understand it, they won't make it a priority or demand validation for the improvement that is needed to accelerate shared risk in the overall health care equation," said Mike Taylor, senior vice president of Delivery System Transformation at Aon Hewitt.

Growing Employer Interest in Provider Payment and Alternative Provider Delivery Models According to a separate Aon Hewitt 2014 Health Care survey of more than 1,200 employers, 65 percent of companies say that the changes underway on the part of health plans and the Federal government toward provider payment models that promote cost-effective, high quality health care outcomes will be a part of their strategy. Of those, 12 percent say it will be one of their three highest priorities.

"The U.S. health care system is undergoing rapid transformation, and both public and private payers desire a system that produces better health outcomes at a more efficient cost," said Taylor. "Employers are increasingly making innovative provider network structures an important part of their strategy, which will help to improve health care purchasing and shift the payment focus towards value based reimbursement and support providers who produce higher quality outcomes."

While few employers have adopted provider network structures today, Aon Hewitt's research finds that number is expected to increase in three-to-five years:

24 percent of plan sponsors steer participants (through plan design or lower cost) to high quality hospitals or physicians for specific procedures or conditions, and another 56 percent are considering doing so in the next three-to-five years.
18 percent use integrated delivery models, such as patient-centered medical homes, to improve primary care effectiveness, and another 56 percent plan to do so in the next 3-5 years.
11 percent directly contract with hospitals or other health providers in specific locations, and another 28 percent plan to so.
10 percent have adopted reference-based pricing, and another 58 percent plan to do so.

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About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon's global partnership with Manchester United.