The Growth Channel

FAQs: Employer centers of excellence networks

by Avery Morrison and Colin Gelbaugh

Centers of excellence (COEs) are gaining popularity thanks to increased activism from large self-insured employers like Walmart, Boeing, Lowe's, and General Electric, who aim to reduce inappropriate care and curb costs. In fact, 27% of large employers will expand their COE offerings to address additional conditions and procedures in 2020.

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By virtue of their design, COE networks drive business to some providers and away from others. So what does it take to become a preferred partner? We put together a series of FAQs to help your team contextualize the opportunity.

What is a COE program?

COE programs typically are designed to drive business to high-value providers for highly specialized, high-cost, and non-emergent treatments and procedures. As such, COEs are common in fields such as orthopedics, transplant, bariatrics, cardiovascular, and oncology.

There is no universal certification or licensing process to become an employer COE partner, and each contract has unique quality and cost standards. Use of the COE terminology signals established expertise in a specific area in terms of the clinicians providing the services, the volume of procedures completed annually, and the health outcomes achieved.

What is the difference between center of excellence, institute, and center terminology?

Hospitals can—and most often do—apply terms other than center of excellence to distinguish their clinical programs. Like COE, the terms "institute" and "center" refer to a specialized program built for a narrow set of diseases or therapies.

The terms are often interchangeable and can be applied at the discretion of the institution, despite having an official specialty certification or employer program in place. However, these terms do tend to reflect program scope. For example, a center of excellence, such as a spine surgery COE, typically has a narrower focus on spinal procedures, while a musculoskeletal institute would likely have a broader scope covering multiple disciplines, including orthopedics, spine, and sports medicine.

Are there specific entities that can designate sites as COEs?

There are several groups that have official COE designations, including health plans, employer contracting entities, and independent groups such as the Joint Commission. They differ in their level of exclusivity and their underlying methodology.

A certification from a group such as The Joint Commission is available to all health care institutions. In contrast, health plans and employers may be more selective and partner only with a select number of providers in a region. Overall, these certifications help organizations promote adherence to clinical best practice protocols and reinforce an organization's commitment to clinical excellence.

What criteria are commonly considered?

Criteria for COE certification differ by governing body and by procedure. However, organizations that achieve COE status from payers typically demonstrate a critical mass of procedural volumes, superior patient outcomes (e.g., reduced complication rates), and positive patient satisfaction scores. Contractual pricing for procedures is also sometimes weighted as a factor. In fact, third-party network aggregators have reported up to a 35% discount in contracted rates compared with typical commercial rates.

The bottom line: Pursuing COE status can be an effective tool to gain market share and garner incremental volume from large employer groups. However, achieving COE status is hardly a given. It requires a dedicated administrative team to manage the program and a long history of strongly performing clinical programs that produce exceptional outcomes.

For more specific information on COE program implementation, look out for our forthcoming COE publication. In the meantime, feel free to email me at MorrisoAv@advisory.com with any other questions you'd like to see answered on the topic.  

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