Detroit-based Henry Ford Health is accelerating its shift toward direct-to employer contracts amid uncertainty across the healthcare industry.
In a Nov. 17 news release shared with Becker’s, the health system revealed a partnership with Nomi Health, a direct healthcare model, to help cut out-of-pocket consumer healthcare costs while also lowering employer costs. Robin Damschroder, executive vice president, president of value-based enterprise and CFO for Henry Ford Health, said long-standing cost-shifting from government programs has pushed employers to find clearer and more affordable options that reduce administrative friction and emphasize prevention.
Becker’s connected with Ms. Damschroder to discuss how federal reimbursement pressures and lessons learned from Henry Ford’s direct-to employer contracts are shaping the system’s strategy moving forward.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: How does the current uncertainty around ACA subsidies, Medicaid cuts and federal policy influence Henry Ford’s move toward direct-to-employer models?
Robin Damschroder: When you think about healthcare costs becoming more expensive, and there’s these pressing economic issues that are facing both employers and residents here in Michigan, our partnership with Nomi offers to allow us to help self-insured employers create more affordable options.
This has been a cost-shifting game for over 40 years. When we lose funding from the governmental programs, then the pressure goes on the commercial programs. What we like to do is be able to create opportunities for those employers, particularly self-insured employers, where we can work and be around the table with Nomi, which is a lot like how we do our work with the [Health Alliance Plan] or employers like General Motors. We can sit with the employer and help them think through, what can I do to help people with preventative health? How can we get farther up the ladder so we’re not so focused on acute care? There is acute care that’s very important. High-value care encompasses all of that.
However, for those employers to really lean into that preventative care, and whether they need an option on-site for a clinic, whether they want to be sure that annually people are getting their flu shots and their COVID shots, whether they want to be sure that their employees’ families are getting their vaccinations, there are things we can do to help make that easy for them. We also work with them very closely on their pharmacy formulary. We like people to be on generics, biosimilars, things in an effort to get around those high end pharmacy costs. We’ve learned a lot in our initial, very large direct-to-employer contract with General Motors, about what some of those very effective employer interventions are. It’s very tailored to individual employers when that occurs.
Q: What financial stability or reimbursement advantages do you see in contracting directly with employers rather than relying on traditional insurers?
RD: There is some collaboration together and an effort for us to be paid more quickly. … For employees, there’s only a copay and deductible on urgent care and emergency, which means we, the healthcare provider, don’t have to chase the employee. Once they’ve paid their premium outside of an urgent care or emergency department copay, they’re going to primary care, they’re getting a diagnostic, there’s no copay.
With every other traditional insurance plan, we’re chasing a copay and deductible, [with] very small balances, which costs a lot of money and takes time. This way the employee feels good and the employer feels good because they paid up front. Then again, there’s a mechanism with Nomi that once a claim has been approved, we get paid pretty rapidly, which is not often the case in traditional insurance. It can take upwards of two, three [or] four weeks for us to get paid.
Q: Why partner with Nomi Health specifically? What do they bring that Henry Ford couldn’t build or execute on its own?
RD: With our direct-to-employer plan with GM, it comes from an employer. They do a lot of their own data analytics. They bring a lot of value to the table of knowing what’s going on with their employees. We compare data, share data and make plans together. Smaller, self-insured employees don’t have that depth and breadth. Nomi, as our partner in this arrangement, really brings some of that data to the employer and some of the other tools that a larger employer might have in its benefits departments that they don’t have. They’re a great partner in that sense. They also can act as a great account manager, much like you have with an insurance company, making sure things are getting done between all of us. They have a very experience oriented service model for both the provider and the employer to make sure that we’re getting those connections one needs in a model like this.
Q: How common are direct-to-employer models today? Are you seeing more health systems move in this direction as broader industry pressures grow?
RD: When you look across the nation, you have someone like Northwell, they have a fairly sophisticated program. I think everyone is dabbling in it. It really depends on the depth and breadth of the employers you have in your market who want to engage at this level. In their own benefits department, they have taken on the folks to do that, or they find a partner. It’s like what we’ve done with Nomi, or again, Northwell has done with their own internal company. I think you see it happening across the nation, in markets, in different ways.
Is it the primary thing folks are doing? No, but I think it’s an option. Particularly when we look at what has worked well in value-based care. We feel like getting closer to the employer and to the actual employees, we can have a better effect. The employer has such great communications and trust with their employees, and if we can be offering directly the advice that they need for preventative care or managing patients or employees that they have with comorbidities, collectively, we can be aligned in those messages, and that’s just a different way to think about it.
If you have personal insurance yourself, you know that you can take advantage of our programs for health and wellness at your employer, as well as at your insurer. They’re not necessarily all coordinated. Yet we’ve really found in our relationship with GM, and we hope to with these self-insured employers, with Nomi, the same thing … that we can be closer to them in aligning those programs so they get greater engagement and adoption. Without that engagement and adoption, it’s harder to get further up the ladder on preventative care.
Q: What are you hearing directly from employers? Why are they seeking these arrangements, and what does this model look like in practice for the employees and families it affects?
RD: Employers are looking for transparency. The one thing that the model can do is somebody may be using a broker and decide not to. Nomi is engaging with employers’ regular brokers as well, but there’s fees all along the chain, from employer through the broker, through the insurance company, before you even get to the provider. There are opportunities to streamline that, and Nomi has been working with the brokers and the employers on that end as well. I think having full transparency into their data and access to their data, sometimes you might hear employers say, “I don’t even have access to my data,” and that’s kind of held as something that they need to ask for. With Nomi, it’s free access to their data, and we can sit and talk with them together about it.
