MemorialCare Health System’s ongoing effort to diversify care delivery has reached a large Orange County employer with a tailored offering of services, and the Fountain Valley-based provider sees the possibility for similar deals in the future.
Chicago-based aerospace manufacturer Boeing Corp. last month tapped MemorialCare to be a direct healthcare provider, meaning it will pay for healthcare services provided to its employees by the hospital operator without using an insurance plan.
MemorialCare’s Health Alliance accountable care organization will be offered as one of the healthcare choices for Boeing’s employees in Orange County, Long Beach and the South Bay area in Los Angeles County effective Jan. 1. Open enrollment starts in November.
The deal calls for several other healthcare providers to supplement MemorialCare’s lineup of local facilities, which includes Orange Coast Memorial Medical Center in Fountain Valley, Saddleback Memorial Medical Center in Laguna Hills, and hospitals in Long Beach. Doctors’ groups and outpatient clinics, among other assets, also fall under its banner.
The organizations aligned with MemorialCare for the Boeing service include UC Irvine Health, Torrance Memorial Health System and Whittier-based PIH Health.
“We brought in a couple other partners to kind of round out our offering, and we can do that again with maybe the same, or maybe some different partners depending upon the geography that best fits the particular employer,” said Barry Arbuckle, chief executive of the healthcare system.
Boeing is OC’s fifth largest employer with 6,470 workers through October, according to Business Journal research. It has about 15,000 workers and 22,000 dependents in California, most of them in Southern California.
Health Alliance’s features for Boeing employees include decreased paycheck deductions, no co-payments for in-network primary-care doctor visits, 100% coverage for generic drugs and the ability to choose specialist physicians within the network without a referral.
MemorialCare’s expansion of care in settings outside traditional acute-care hospitals, as well as its wellness and disease management efforts, helped attract Boeing, according to Arbuckle.
Scrutiny
“We’re very satisfied that we were selected by Boeing because they very much did scrutinize the market,” Arbuckle said. “They truly want the best offering for their employees and dependents.”
MemorialCare says its new option is designed to keep people healthy and out of the hospital by focusing on evidence-based prevention, diagnoses and treatments that are intended to identify and treat members’ underlying health problems prior to them becoming chronic conditions.
Boeing sent out a request for proposal roughly 15 to 18 months ago, according to Arbuckle.
“It really kind of struck us that things we’ve been working on for literally 20 years set us in a position to be able to respond in a very comprehensive way to the [request for proposal] and be selected by Boeing,” Arbuckle said, citing MemorialCare’s creation of its “physician society” which focuses on “best practices” in medicine.
The health system examined others involved in direct contracting relationships, including Santa Clara-based technology company Intel Corp., which contracts with Presbyterian Healthcare Services to serve employees and dependents at its Albuquerque, N.M., operations.
Financial Incentives
Boeing’s goals for the collaboration “are pretty much three-fold,” said Jeff White, the aerospace company’s director of healthcare strategy.
“We expect that quality will be enhanced; we have some quality terms in the contract,” White said from Boeing’s operations in Puget Sound, Wash.
Boeing expects that the “member experience” will improve, as well, White said. Examples of that include access to electronic medical records and the ability of patients to email their doctor, he said.
The third goal involves alignment of financial incentives through the collaboration’s design.
“If [employees] choose to select the partnership with MemorialCare, they’ll receive free primary-care office visits, free generic drugs … and they will also pay less out of their paycheck,” White said, adding that Boeing employees who choose a high-deductible plan will have more company money in their health savings account.
“The value of the incentive may depend a little bit on how much the employee is using the healthcare system, but in general, it’s probably $350 or so a month for a single and well over $1,000 a month for a family,” White said.
Options
Boeing plans to maintain multiple plan choices for its area employees.
“At this point, we’re not looking at plans for MemorialCare to be the only provider here in town,” White said.
MemorialCare will be Boeing’s fourth collaboration with a healthcare provider, according to White.
“We, over the past couple of years, have been doing some direct contracting with integrated health systems. We started here in Puget Sound and also did [contracts] in St. Louis and Charleston, S.C.,” he said, adding that Boeing selects healthcare systems that it contracts with through a competitive bid process.
Boeing “went through that process, focusing on quality, the network that the system has and their willingness to engage, stuff like that,” he said in describing how it picked MemorialCare.
