Boeing signs shared savings deal with Washington hospitals

Deal establishes two networks for employees

University of Washington (UW) Medicine and Providence Health & Services have contracted directly with Boeing to create "preferred networks"—with a shared savings component—for 27,000 employees of the aerospace giant.

Details of the 'preferred networks'

The deal establishes two accountable care networks in areas where Boeing employees live and work:

  • The UW Medicine Accountable Care Network: The network will include eight UW facilities, Overlake Medical Center, MultiCare Health System, Seattle Children's Hospital, Seattle Cancer Care Alliance, and more.

  • Providence-Swedish Health Alliance: The network will include Providence hospitals, Swedish Health Services hospitals (which were acquired by Providence in 2012), The Everett Clinic, Pacific Medical Centers, and more.

10 Keys to Risk-Based Direct Contracting

According to UW Medicine CEO Paul Ramsey, each network will be judged on how well it performs on certain quality measures, such as readmission rates, appropriate use of ED care, chronic disease management, and other nationally recognized quality metrics. Access, care integration, and patient satisfaction also will be important for Boeing, says Joseph Gifford, CEO of Providence's ACO.

Boeing has not released information about the length or value of the contracts, though it did say they were "multi-year" deals. Each network will receive financial incentives for meeting spending benchmarks.

"We clearly anticipate that we'll bend the cost curve for all… That is a big driver behind this," Boeing VP Alan May said.

Boeing is one of the largest employers in Washington, with 81,303 workers. However, the new networks are available only to non-union employees, some union-represented workers, and retirees.

Eligible employees can remain in their current plans; the preferred network will serve as an "add on" to the traditional coverage options. There will be financial incentives for participating in the networks.

The networks will be offered when the company's open-enrollment period starts this fall.

The broader trend: Direct contracting

Boeing is far from the first company to enter into direct health care contracts with provider organizations. Intel last year entered into a similar agreement with Presbyterian Healthcare Services to provide benefits to its 5,400 employees in New Mexico.

Intel creates an ACO-style narrow network for its workers

Providence too is a part of the Intel network, but the deal with Boeing is unprecedented for the system in terms of its size and scope, says Providence Health President and CEO Rod Hochman.

More employers may follow Boeing's lead, but only the largest companies will be able to secure such agreements, according to Suzanne Delbanco, executive director of the not-for-profit Catalyst for Payment Reform. Such partnerships have the "potential to secure care at lower prices with more intense oversight on quality," she added (Evans, Modern Healthcare, 6/13 [subscription required]; Bauman [1], Puget Sound Business Journal, 6/13; Bauman [2], Puget Sound Business Journal, 6/13).

Other employer-provider deals

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