Developing solutions to high health costs keeps hospitals relevant to payers.
Hospitals are often separated from employers—the direct business, the purchasers of care—by middlemen, otherwise known as private health insurance companies.
But to thrive in the private pay market where margins are increasingly won or lost, they need to make sure they're getting a message of high-quality, comprehensive healthcare for employees in front of employers. What often follows is conversations with employers about the health system's quality, cost competitiveness, and service offerings.
The so-called "value exchange" between hospitals and employers shows the employers that the hospitals are involved not only as "silent" providers of "sick care" for employees, but also as advocates for better health, something employers are keenly interested in to ameliorate such huge drains on productivity as absenteeism and presenteeism.
"You can't look at it as a business transaction as much as an opportunity to build relationships with the employer community," says Mike Esposito, vice president of business development and executive director of service line operations at Louisville, KY-based Norton Healthcare.
Key programs to offer employers at minimal cost include blood pressure screenings as part of a health risk assessment, or other diagnostic services that get the hospital's name and services in front of employers and employees. Norton, a five-hospital system, uses a third-party company, Brentwood, TN-based Aegis Health Group, to help organize and target employers for the pitch, but sends its own clinicians to the events and brands all collateral materials from Aegis for Norton Healthcare.
"We offer the services at a nominal cost," he says. "We break even on them because we're trying to build relationships as a way of promoting interventional programs and services we can offer."
Sparrow Healthcare, a 733-licensed-bed health system based in Lansing, MI, uses a similar tactic to bring together within the organization dozens of community brand-building activities such as health fairs.
"I wish it was easy to draw all these together," says Joe Ruth, senior vice president and chief strategy officer with Sparrow. "We needed to create a comprehensive solution to what at one time were all one-off transactions."
For example, Sparrow gained the Michigan Athletic Club, a high-end health club, in a recent merger. To help drive business to the club and increase awareness and positive brand association with the health system, it built a "Biggest Loser"-style weight-loss program for a health plan in the area. Now three health plans are sending employees to the club for the program.
"To me, it's a proxy for a full customer relationship management database, something healthcare hasn't done a good job with," says Ruth.
"We're working on locking that down for ROI," he says. "We're changing the dynamics from paying for sick care to paying for healthcare."