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Aurora Health Offers Employers a Savings Guarantee

John Commins, for HealthLeaders Media, July 30, 2012

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."

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