The Boeing Company selected MemorialCare Health System for a “first of a kind customized health plan option” for Boeing employees and their dependents in Long Beach, South Bay and Orange County, Calif. Boeing has about 15,000 employees and 22,000 dependents in the state, with most in Southern California. Open enrollment in the MemorialCare Health Alliance ACO will begin in the fall for a January 1, 2017 service launch.
Boeing said it reached its decision after a lengthy, competitive process, and that MemorialCare was selected for their reputation of high-quality care, broad geographic reach and the depth of their provider network. Defining characteristics of the plan include:
- Decreased paycheck deductions for health care coverage
- No office-visit copayments for network primary care physician visits
- 100 percent coverage for generic-drug prescriptions
- Ability to choose specialists within the network without a primary care physician referral
- Increased company contributions to a health savings account for eligible participants
- Faster access to network primary care providers and specialists and additional after-hours care
MemorialCare Health Alliance ACO includes agreements with Torrance Memorial Health System, UC Irvine Health, PIH Health and associated provider groups. The network encompasses more than 2,400 primary care and specialty physicians and providers, 9 hospitals and 71 community-based ambulatory surgery, medical imaging, urgent care and dialysis centers.
Our Take: This isn’t Boeing’s first foray into accountable care. The list of benefits—such as no copays and free generic prescriptions—mirrors that of its first ACO, launched in the fall of 2014 with Swedish-Providence Health Alliance and UW Medicine Accountable Care Network for 30,000 employees in the Pacific Northwest. In July of 2015, it announced two similar agreements, one with the Mercy health system in St. Louis covering 13,000 employees, and another with Roper St. Francis Health Alliance covering 6,000 employees in the Charleston, S.C. metro area.
If the agreement reached with MemorialCare looks anything like the one with Providence—a deal that took two full years to negotiate—it’s a multi-year agreement that sets costs for company medical costs annually. If costs exceed projections, Swedish-Providence pays the excess; if it beats budget, it keeps the savings.
No insurance company is involved, since Boeing is self-insured. The contract stipulates patient satisfaction and quality measures as well, such as having short appointment wait times and tracking population measures in diabetes and cardiovascular disease.
In order words, it’s a fully-functioning shared savings ACO. Today, Boeing has 41,000 employees, about 26 percent of its workforce, eligible to be part of an employer-led ACO.
It’s no accident that Boeing chose MemorialCare either. Torrence Memorial Medical Center, PIH Health and MemorialCare Health System are also part of Vivity, the unorthodox alliance of competing hospitals that launched in 2014 in partnership with Anthem Blue Cross. At the time, Vivity made no secret that the ACO-like alliance was all about going after Kaiser Permanente. By the end of 2015, Vivity had enrolled 24,000 members and had 13 employers on board.
MemorialCare has the experience to ensure that its partnership with Boeing will work. As Boeing, Intel and other major employers find success with the model, look for more agreements like this to be announced this fall.