Chip Burgett, Director, Contracting – Global One Ventures, LLC; Michael B. Larsen, Executive Director – Municipalities Colleges and Schools Insurance Group (MCSIG); and Tom Wilson, CEO – Monterey Peninsula Surgery Centers (MPSC) spoke at the Employer Healthcare & Benefits Congress about how they partnered to effectively engage plan members to utilize bundled surgery rates for substantial savings to the plan sponsors and plan members. Both organizations operate in the Monterrey, CA area. MCSIG developed unique incentives for plan members to utilize the program and MPSC deployed a strategy to identify and communicate with MCSIG plan members and alert them to the benefit incentive opportunities.
Mr. Larsen spoke about MCSIG’s history. They were founded in 1982, and before implementing bundled payments with MPSC, had 8,000 attendees on an Anthem PPO plan in 2015. Their medical costs were 40 to 80 percent over the national average, and 20 to 30 percent higher than the average of California’s other large cities Los Angeles and San Francisco. To help manage these costs, they moved to a direct contracting model.
They saved $1.2 million in surgical costs in 2015 and improved their outcomes. Because they still had their PPO, and some employees were still using their traditional hospital rather than MPSC, they were able to create a natural experiment for outcomes. During this period, 20 surgeries were performed under the PPO, of which 8 had complications. Over that same period, 75 employees used MPSC with a total of zero complications. Zero.
After this success, they went the Anthem and removed preauthorization for surgery centers and added it to hospitals, and then finally cut their surgery center copay in half.
As for MPSC, they see approximately 17,00 cases annually, making them the 6th highest volume surgical provider in California. They have 192 surgeons on staff (95 percent of all surgeons in the county) from 13 specialties — they do not perform heart or brain surgery. Of their 17,000 surgeries in 2016, they only had 8 complications.