MemorialCare, Boeing form state's first direct contract for employee health care

Boeing Co. and MemorialCare Health System have struck a direct contract to provide medical care to Southe Califoia employees, the first such cost-saving alliance in Califoia between a large employer and a health provider, the companies aounced Tuesday.

Unlike traditional health plans offered by insurance companies, through which MemorialCare might be one of many covered providers, the five-year contract calls for Memorial to reduce costs for Boeing, while gaining direct access to clinical data to better customize and coordinate employees’ health needs.

The plan will be offered to roughly 15,000 employees during open enrollment in the fall, with coverage to start in 2017. Employees who choose the MemorialCare option will have lower premiums, zero co-pay visits to primary care doctors, and free generic drugs.

“This is an extraordinarily iovative relationship between a major employer and a health system,” said Barry Arbuckle, CEO of Fountain Valley-based MemorialCare. “Our goal is to improve the service and to bend the cost curve. That’s something employers are really longing for.”

The plan is known as an accountable care organization, or ACO, which offers a narrower network of providers who coordinate care and manage chronic conditions, while reducing uecessary costs and increasing communication with patients. In such arrangements, health providers ea more for improving patient health and lowering costs, rather than based on the number of procedures they do.

In 2014, Boeing entered into its first direct contract for health care in Washington state. The aerospace manufacturer has since done the same in Missouri and South Carolina. In Southe Califoia, Boeing operates in Seal Beach, Huntington Beach and Torrance.

The network for Boeing employees will include 2,400 primary care doctors and specialists as well as nine hospitals, including MemorialCare’s five hospitals: Orange Coast in Fountain Valley, Saddleback Memorial in Laguna Hills, Long Beach Memorial, Long Beach Community, and Miller Children’s and Women’s Hospital in Long Beach.

The nonprofit Memorial has also contracted with UC Irvine Medical Center, Torrance Memorial, PIH Health Hospital-Whittier and PIH Health Hospital-Downey.

“Because the majority of Boeing employees live throughout the greater Long Beach, South Bay and Orange County communities well served by MemorialCare and its partners, many are accustomed to and comfortable with the network’s primary care and specialty physicians, hospitals, outpatient and community outreach programs,” Jeff White, Boeing’s Director of Health Care Strategy, said in a news release.

Advertisement

MemorialCare has formed other ACOs since they were introduced by the Affordable Care Act as a way to tie compensation to improved outcomes. Last year, it partnered with Aetna to offer a PPO and has a similar arrangement with Anthem Blue Cross for care of patients with chronic conditions such as diabetes, asthma and heart failure.