Frustrated by the continued erosion of health care affordability, many employers believe that they have exhausted every existing option to reduce the cost of health care. Some have attempted to take matters into their own hands. These employers venture to recapture market power by pooling their plan member volume with other health care purchasers to maneuver around health insurance companies and negotiate contracts directly with local providers.
We call this strategy aggregated purchasing.
Over the past 30 years dozens of employer-led coalitions have launched aggregated purchasing models – of the many who tried, only a few found sustained success. CPR launched an extensive examination of employers’ efforts at aggregated purchasing to understand the reasons why so many fall apart and to distill the key ingredients for success.
CPR’s report is organized into two sections:
A Tough Crop to Till, Why Employer Attempts at Aggregated Purchasing Fail (and why some survive)
Part 1 focuses on examples of those who “tried and failed” juxtaposed against those who “tried and survived” to create an inventory of the local market conditions and endogenous leadership requirements to build and sustain success.
Planting Something New: Employer Blueprints for Durable Aggregated Purchasing Models
In Part 2, Catalyst for Payment Reform examines the success factors behind viable aggregated purchasing models and lays out guiding principles for employers who would strive to achieve similar success in their own markets.
More information on aggregated purchasing:
- AJMC Blog, Do Health Plans have a Plan to Help Employer-Purchasers Get Better Value?
- The Commonwealth Fund Blog, No Safe Haven for Employers Managing Health Care Costs
- Virtual Summit: On May 20th, CPR hosted a 2-hour virtual summit to share key findings from our research and hear from a panel of purchaser experts on their experiences with aggregated purchasing. A recording of the summit is available to health care purchasers for free, and to all others for a nominal fee.