Accountable Care In-Flight

Boeing continues to develop its ACO initiatives

By Caroline Anschutz

ACO-Issue3.2015-iStock_000003272215_LargePose the questions “Are ACOs the answer? Are providers and patients seeing benefits?” to the healthcare industry at large, and you’ll likely receive a multitude of answers. Yes, no, maybe, only in specific circumstances … everyone has an opinion. What is clear, however, is that the Affordable Care Act is changing the healthcare landscape. And for one company, not only are its accountable care initiatives working, they appear to be thriving – and growing.

In 2014, The Boeing Company made history when it formed accountable care agreements with the Providence-Swedish Health Alliance, an ACO formed by Providence Health and Services in Renton, Wash., and Swedish Health Services in Seattle, and with an ACO formed by UW Medicine, also located in Seattle. These agreements drew a lot of attention from the healthcare industry because they do not include an insurer. At the time, the 600 ACOs in the U.S., including more than 300 commercial ACOs and almost 350 ACOs aligned with CMS, involved a provider and some kind of payer.

This “employer-driven” ACO was believed to be one of the first of its kind, and analysts were unsure if it would work. The potential benefit for Boeing was clear – by cutting out the insurer “middle man” between patients and providers, it may be able to reduce costs. The contract set goals for the employees’ medical costs. If costs are higher than anticipated, the provider will foot the bill. If costs are lower, the provider sees the savings. Boeing employees who elect to participate in an ACO will pay higher deductibles and co-pays if they receive treatment from a provider that is not included in the ACO network.

When ACO Insights first reported on these deals in November 2014, there was no indication as to how many Boeing employees were interested in the ACO option. The open enrollment period began in November 2014, and of the approximately 27,000 Boeing employees and 3,000 retirees in the Puget Sound region of Washington state that were eligible, about 18,000 or about 67 percent signed up for one of the ACOs in roughly equal numbers.[1] While actual savings numbers aren’t yet available, Boeing estimates employees will save $350 to $1,000 per person per year on monthly payments, deductibles, and co-pays.

Two new agreements
Numbers may not be available, but it’s clear that the risk must be paying off for Boeing. In July, the company selected Mercy in Chesterfield, Mo., to offer a new health care plan option to certain employees in the St. Louis area beginning in January 2016. According to Mercy, the new option, called the Preferred Partnership, is the largest to date in its Employer Health Solutions initiative.[2] The option is available in the St. Louis area and certain areas in Illinois for nonunion employees, and employees represented by the International Brotherhood of Electrical Workers, Local 1. During annual enrollment in the fall, eligible employees will be able to choose from among their current plans or the new option. Employees who choose the Preferred Partnership option will see lower paycheck contributions for some options and lower costs for primary care office visits and generic drugs. They will be able to see any specialty provider within the Mercy network without a referral from a primary care physician.

Then in August, Boeing entered into an agreement with Roper Saint Francis Healthcare in Charleston, S.C. Under the deal, which is effective Jan. 1, 2016, more than 6,000 Boeing employees will have access to the Boeing Preferred partnership. Again, employees will still have access to their current healthcare options. Additional benefits under the new program will include same-day or next-day appointments, a Boeing-dedicated customer service center and nurse line, and electronic messaging with care providers.[3] All of the ACO plans, including those formed last year, are being administered by Boeing’s Blue Cross Blue Shield of Illinois plan; however, the respective health systems are at risk for managing the workers’ costs.

Roughly 19,000 Boeing workers will have the option to choose new health plans for 2016 under the contracts,[4] giving about 49,000 of Boeing’s 162,000+ employees new choices. According to Jeff White, Boeing’s director of healthcare strategy, the company hopes to provide programs like these to most of its employees, though it’s not expected to announce any additional contracts for 2016.[5]

Boeing’s endgame
ACO-Issue3.2015-iStock_000010225445_LargeAccording to PharmExec.com, more Preferred Partner agreements are in the works. Why? Boeing’s risk is obviously paying off, and it may be working toward a private exchange. Tory Wolff of Recon Strategy says Boeing “is setting up its market to transition to a provider-consumer type market. We do not expect it to be too long before Boeing starts transitioning its employees to defined contribution.” If this is indeed Boeing’s endgame, it will join a small list of large employers that have taken this route. In 2013, Walgreen Co of Deerfield, Ill., moved 120,000 employees to the Aon Hewitt Corporate Health Exchange. GE, IBM, and Time Warner Inc all moved retirees to insurance exchanges, and Accenture predicts “that by 2018, enrollment on private health insurance exchanges could outpace enrollment on public exchanges.”[6] Several factors may play in to a company’s decision to move to a private exchange, including a 40 percent excise tax on high-cost health care plans set to go into effect in 2018 as part of the Affordable Care Act.

As of publication, no other company has yet followed in Boeing’s footsteps. Intel signed a direct contract with Presbyterian Healthcare Services in Albuquerque, N.M., in 2013 for a narrow-network, accountable care-style arrangement, and Lowe’s Corp and Wal-Mart Stores have limited contracts for orthopedic and cardiac surgeries with select U.S. health systems. It’s safe to predict that all eyes will remain on Boeing.


[1] http://www.pharmexec.com/boeing-going-gone-end-group-health-insurance

[2] https://www.mercy.net/newsroom/2015-07-28/mercys-employer-health-solutions-sets-partnership-with-major-employer

[3] http://www.foxcarolina.com/story/29661729/boeing-roper-st-francis-form-new-healthcare-partnership

[4]http://www.businessinsurance.com/article/20150805/NEWS03/150809940/boeing-negotiates-directly-with-more-health-systems

[5]http://www.businessinsurance.com/article/20150805/NEWS03/150809940/boeing-negotiates-directly-with-more-health-systems

[6] https://newsroom.accenture.com/industries/health-public-service/enrollment-in-private-health-insurance-exchanges-doubled-to-6-million-in-2015-according-to-accenture.htm

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