Like a health maintenance organization, the plan requires enrollees to stick to a closed network of doctors. There is emphasis on primary care and fewer referrals to specialists. Treatment for back pain, for example, often begins with physical therapy at the clinic
Cisco also mandates that Stanford track a dozen health measures, including glycemic levels for diabetics and blood pressure for those with hypertension.
Johnson said fewer than 1,000 people are enrolled, below Cisco’s goal of 1,300 for 2018. The plan has yet to make a dent in Cisco’s $500 million annual healthcare tab, which has been rising by 3 percent to 4 percent in recent years.
Still, Cisco is encouraged enough by the savings that it may expand the program to the company’s second-largest U.S. center, in North Carolina’s Research Triangle Park.
“What we were doing in the past wasn’t really working,” Johnson said. “So this model … is worth it.”
CHIPPING AWAY AT CHALLENGES
Experts warn Cisco’s approach is not suitable for most employers.
For starters, companies need thousands of employees in one place, usually a city, said David Muhlestein, Chief Research Officer at healthcare consultancy Leavitt Partners in Washington D.C. Then their healthcare partner needs to be committed to improving patient health, rather than just offering a discount to win a big client.
“There are not a ton of providers who are really well positioned to make those changes,” Muhlestein said.
Santa Clara, Calif.-based Intel says it has found such partners since it launched its Connected Care health plan five years ago. About 38,000 employees and dependents are now enrolled in Arizona, California, New Mexico and Oregon.
Technology is critical to curbing costs. In Oregon, patients are encouraged to use video conferencing to speak with physicians when appropriate. At $49, the cost is one-third of an office visit.
Jennifer Leo, a 41-year old Intel project manager in Hillsboro, Oregon, chose Connected Care mainly because it covers 100 percent of her husband’s insulin, a drug whose U.S. retail price has more than doubled over the past five years.
Hospital network Providence Health & Services tracks her husband’s condition closely. But Leo said she, too, got personal attention when she came down with a sinus infection on a weekend.
She booked a quick video appointment with a doctor, who prescribed an antibiotic. The next day, the office of her primary care physician reached out to “check that everything got taken care of,” Leo said.
Such follow-through has led to high patient satisfaction; Connected Care boasts a 95 percent enrollee retention rate, says Angela Mitchell, Intel’s head of U.S. healthcare delivery.
And it has curbed costs and boosted patient health, she said. Last year, for example, 78 percent of diabetics on the plan had their sugar levels under control, up from 69 percent in 2016, Mitchell said. Spending on people with the most complex health conditions was about 10 percentage points lower than on those with comparable issues outside the plan.
Intel spent nearly $700 million on healthcare last year, up about 1 percent from $690 million in 2016.
Still, Intel employees will sometimes ask Mitchell for help when they cannot see specialists quickly enough. In some cases, she will intervene and call the health system directly to make it happen.
“There are thousands of doctors in these networks. We’re not trying to act like it’s perfect every single time,” Mitchell said.
Boeing, too, has hit some snags with plans it negotiated directly with hospitals in four states covering 15,000 employees plus family members.
Doctors have willingly prescribed cheaper generic drugs, says Boeing global healthcare head Jeff White. But getting them to commit to, say, physical therapy first before scheduling a costly knee replacement has been harder, he said.
White said direct arrangements have boosted quality and saved Boeing money; he declined to provide exact figures. The aircraft maker spends about $2.4 billion annually on healthcare for more than 120,000 U.S. workers and their dependents.
Some healthcare experts point to the inherent conflict for providers: If they prevent expensive health crises through better care, they also lose out on more profitable services, such as hospital admissions.
“That’s the challenge of trying to ask the health system to save money,” said Jack Hoadley, a health policy expert at Georgetown University.
(Reporting by Caroline Humer; Editing by Michele Gershberg, Elyse Tanouye and Marla Dickerson)