Health Transformation Alliance Update

Last year I wrote about the Health Transformation Alliance (HTA). HTA is a group of large employers that joined together in an effort to control their health care insurance expenses by reducing the costs of services driving premium increases. Last year, the Alliance had approximately 20 members. In a year, the number of participants has doubled, representing more than six million employees.

According to a New York Times opinion column written by HTA’s chief executive, the organization’s member companies account for nearly $25 billion in health care spending. It has projected savings of $600 million by optimizing its spending on prescription drugs, only one of four tools in the Alliance’s toolbox.

A second tool is its data and analytics solutions, provided by IBM, a member company. HTA’s members aggregate their anonymized health care utilization records, forming a huge data set it can analyze to identify and prioritize the sources of waste and overspending most in need of optimization. 

Another tool is “medical solutions that modify and improve the current provider delivery system.” While it sounds ambitious for employers to try to overhaul the provider delivery system, it’s important to understand that the health care system is already in the process of transformation. Providers, payers and regulators are committed to improving outcomes, paying for value, and enhancing the patient experience. HTA can help accelerate these changes by guiding their six million employees toward insurance plans and health care providers that meet these goals. At the same time, they may be able to smooth the transition to risk-based reimbursement for providers that are reluctant to leave the fee-for-service system by providing a large, stable population of patients enrolled in a fee-for-value plan.

The fourth tool is “consumer engagement solutions.” While HTA doesn’t fully describe the details of this solution on its website, one can assume that engaged patients will have better clinical, social, and economic outcomes. For example, engaged patients are more likely to take advantage of preventive and wellness programs and adhere to chronic disease management regimens.

HTA’s approach is a free-market response to the unsustainable growth rate of employers’ health care insurance costs. Although they’re just getting underway, they seem to have the right approach and the right set of tools to make a first, significant impact on health care costs.

There is a temptation to contrast HTA’s success against the federal government’s recent failure to pass a health care reform bill, but in a way, that misses the point . Each initiative is aimed at a different part of the health care landscape. The government is grappling with how to provide insurance coverage through Medicare, Medicaid and individual policies at a reasonable cost to as many Americans as possible and can’t move forward with other parts of health care reform because of bureaucracy. The tools at their disposal are policy, the tax code, and funding. Employers aren’t tied to the reconciliation process and can focus on quickly solving health care issues that incur the most cost and impact care. They are using high tech and economies of scale to drive down the underlying costs through economies of scale. Tackling both aspects of healthcare reform is important, but at the moment only the latter is succeeding because of collaboration in working toward common goals.