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Business Organizations Announce Plan to Reduce Healthcare Costs

BOSTON — Twenty prominent Massachusetts business organizations representing thousands of employers announced an initiative to save $100 million in healthcare costs by reducing avoidable use of hospital emergency departments.

The newly formed Massachusetts Employer-Led Coalition to Reduce Health Care Costs will work with doctors, hospitals, and health insurers to reduce inappropriate use of emergency departments (EDs) by 20% in two years. State officials estimate that 40% of ED visits are avoidable, a pattern that costs $300 million to $350 million annually for commercially insured members alone.

Coalition leaders Richard Lord, president and CEO of Associated Industries of Massachusetts (AIM), and Eileen McAnneny, president of the Massachusetts Taxpayers Foundation (MTF), say the group will help employers take a direct role in the health and healthcare of their employees and beneficiaries.

Healthcare industry organizations — including the Massachusetts Health and Hospital Assoc., Blue Cross Blue Shield of Massachusetts, the Massachusetts Assoc. of Health Plans, and the Massachusetts College of Emergency Physicians — are committed to be strategic partners with the coalition.

The coalition’s goal is to shift as many avoidable ED visits as possible to high-value, lower-cost settings to relieve crowded EDs, reduce the cost of care, and improve quality.

Most ED use is necessary, appropriate, and in many cases life-saving. However, providers and payers broadly agree that shifting ED use for non-urgent health problems to more timely, appropriate settings will improve quality and patient experience, and lower the cost of care. Upper respiratory infections, skin rashes, allergies, and back pain are among the most common conditions for which Massachusetts patients seek care in the ED unnecessarily, and the cost of an ED visit can be five times that of care provided in a primary-care or urgent-care setting.

The coalition will focus on four tactics for change:

• Work with employers to communicate information about avoidable ED use with employees and families so they can get the best possible care in settings such as primary-care practices, retail clinics, and urgent-care centers;

• Track and publicly report the rate of avoidable ED visits so employers, stakeholders, and the public may understand and tackle the scope of the issue;

• Work with labor unions, healthcare providers, health plans, employers, and employees to reward and encourage the appropriate use of the ED by aligning financial incentives, and bolster the availability of care in the community, especially during nights and weekends; and

• Advocate for policy changes that will advance new care delivery and payment models, such as accountable-care organizations, telemedicine, and mobile integrated health, which, combined, can improve access to timely care in the right setting.

“I urge employers of any size to participate in the coalition’s initiatives,” Lord said. “These efforts are an opportunity to engage with each other by sharing our successes and difficulties in managing healthcare costs, while also actively educating our employees about their ability to drive down healthcare costs through patient choice. We want to raise the bar for all employers in Massachusetts.”

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