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Driving Quality & Savings with Employer Direct Contracting With Cleveland Clinic

An emerging trend among self-funded employers is the rise of Direct Contracting, arranging a contract with healthcare providers to purchase healthcare services, usually for certain conditions, and a pre-negotiated rate. There is no healthcare provider better suited to discussing the finer points of Direct Contracting than the famous Cleveland Clinic.

Major employers, most notably Lowe’s, send their cardiothoracic patients to Cleveland. As the 2nd rated hospital overall in the United States, with over 3,500 physicians and over 200,000 annual surgical cases, and a three-star rating for heart surgery (which only 1 percent of hospitals can claim) there is no place better to receive this care.

“What we do better than anyone else in the world is cardiothoracic surgery,” said  Jerry Fiala, Director of Sales & Marketing for Cleveland Clinic.

So how does this translate to cost savings? Traditionally, the equation for value has been: Value = outcomes/cost. However, the Clevland Clinic uses the equation:  Value = (quality+patient experience+ functional status)/(event+episode+ongoing care). While this might seem very technical, due these additional factors, Cleveland Clinic clients like Lowe’s report 10 percent more saving per patient!

They also reduce costs by reducing or eliminating unneeded or wasteful procedures. Physicians are not paid per procedure, so there is no incentive to perform a procedure they do not feel are necessary.

“We will be the first one to tell someone a procedure is unnecessary,” said Fiala.

So by sending employees to Centers of Excellence like the Cleveland Clinic, employers can save a lot on their healthcare costs while being assured they are receiving the highest quality care.

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