Aurora Health Offers Employers a Savings Guarantee

In what may be the first such marketing play of its kind, Milwaukee-based Aurora Health Care is offering employers who join the Aurora Accountable Care Network guaranteed savings averaging 10%.

In a twist, Aurora is using savings generated from its own integrated health plan for its 48,000 employees and dependents as the benchmark for other employers. The health system's employee health plan has shown that it can bend the healthcare cost curve.

Between 2001 and 2010, per-member-per-month costs for the Aurora employee health plan rose 6.2% per year on average compared with the national average that rose 10.7% a year. Between 2008 and 2010 Aurora says its plan's costs rose 1.5% a year against a national average increase of 9%.

"We think it changes the game because it is the first time for us in this marketplace that an integrated delivery system is able to contract and work with employers longitudinally to take full value of the integration that we offer," says Rick Klein, Aurora's executive vice president of Growth and Market Development.

"For 15 years we have had the ability to manage and work with all aspects of the system: hospitals, physicians, pharmacy, [and] lab to be able to provide great care at a very cost-effective price for our own employees," Klein says. "We have been able to prove that the value of this integrated system in this marketplace is worth about 7% when you look at it longitudinally over the episodes of care."

Klein says Wisconsin employers who want to join the Aurora Accountable Care Network, which is being offered through Aetna beginning Jan. 1, 2013, must submit three years of data detailing the type of healthcare services they've purchased for their employees.

"The employer has to supply the data, the claims that they have historically experienced for three years and what we do is take a look at exactly what type of care and how much care was delivered in that period," Klein says. "We apply our own intelligence, using our own employees for the last 15 years. We look at the integrated value that Aurora brings and we put a guarantee on that, understanding that if we provide all the care we can be more efficient than the market in general." 

"We have supplemented that with other national databases," he says. "This is the evolution from the healthcare system that historically has worked with employers on a single type of charge to much more longitudinal whole population management as it relates to their employee population."

The network plans are fully insured and feature two tiers of benefits and co-pays. They are designed for small and mid-sized businesses, and large, self-funded employer plans are also available. The savings are generated primarily through coordinated care for patients, lower co-pays with network providers, and better health outcomes.

"We are guaranteeing a PMPM trend line and an experience over a three-year period that is better than what the current employers' experience would be. We've seen generally it as low as 7%. On smaller employers that have a lot of care that hasn't been organized we've been as high as 13%," Klein says. "We say to the employer, integrated care is cost effective and high quality and if they are not buying integrated care currently we think there is an opportunity to save money and increase the quality of the care delivered."

The Aurora Accountable Care Network has more than 1,500 physicians, 15 hospitals, and 160 clinics in eastern Wisconsin and northern Illinois and uses system-wide electronic medical records and real-time claims analysis. Plan members will have care managers who schedule appointments, help patients contact physicians, and coordinate follow up care.

Klein says he's not aware of any other integrated care models in the United States that offer guaranteed savings. But he says Aurora and other accountable care networks understand that the only way to slow the staggering increase in healthcare costs is to coordinate care to achieve better outcomes.

"The idea that healthcare organizations in the future are going to be taking that responsibility is clear," he says.