Direct Contracts and the ECEN High-Value Network Model, Take Two EP240: With Olivia Ross

Direct contracts between employers and clinical organizations perform way better than what most third parties negotiate — and the Employers Centers of Excellence Network (ECEN), built by the Purchaser Business Group on Health (PBGH), proved exactly that. This Take Two episode revisits that work in light of a key finding from a recent PBGH data demonstration project: plan sponsors can now use publicly available transparency and claims data to build their own high-value networks, all by themselves.

In this episode, Stacey Richter speaks with Olivia Ross, who led the ECEN program at PBGH, about how the network selected Centers of Excellence down to the individual surgeon level, structured prospective bundles to create price predictability, and avoided unnecessary surgeries — which turned out to be the single largest source of cost savings.

WHAT YOU'LL LEARN
✅ Why over 50% of spine surgery patients referred to ECEN Centers of Excellence were counseled against surgery after multidisciplinary review — and why that number reflects the scale of inappropriate surgical care happening in local markets

✅ How ECEN used prospective bundled payments covering facility fees, all physician fees, and initial post-discharge outpatient care at a single negotiated price — and why competitive pricing alone was not enough to drive employer adoption

✅ Why the ECEN center selection process went down to the individual surgeon level, measuring procedure-specific outcomes like surgical site infection rates and return-to-OR rates — and why that granularity matters when hospital-level quality scores mask wide variation between surgeons

✅ How direct contracting creates market pressure even in consolidated geographies where hospital monopolies have eliminated local competition — giving self-insured employers a way to route members to higher-value care elsewhere

✅ Why self-insured employers pay on average approximately 30% more in their claims wire than what the actual provider received — and what transparent, direct contracting without confiscatory middlemen changes about that math

✅ How continuous quality improvement within ECEN allowed best practices — like a nurse follow-up call 24 hours post-discharge — to spread beyond ECEN patients to the broader patient population at participating centers

WHY THIS MATTERS
The ECEN model got dismantled when the TPA administering it was acquired by a larger firm — a cautionary tale about institutional will. But the underlying lesson is more durable than any one program: employers who are willing to act as the demand curve, and who pair that with genuinely rigorous quality assessment, can create competition where none exists, eliminate unnecessary care, and drive costs down without shifting them onto patients. With current price transparency data now making it possible for any plan sponsor to do this themselves, the old is new again.

=== LINKS ===
🔗  Show Notes with all mentioned links:  
https://cc-lnk.com/Take2-EP240

✉️  Enjoy this podcast? Subscribe to the free weekly newsletter:
https://relentlesshealthvalue.com/join-the-relentless-tribe

🫙  Support the podcast with a small donation to the Tip Jar:
https://relentlesshealthvalue.com/join-the-relentless-tribe

🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b

📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue

=== CONNECT WITH THE RHV TEAM ===
✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/
✭ Threads  https://www.threads.net/@relentlesshealthvalue/
✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social
✭ X   https://twitter.com/relentleshealth/

07:40 Prospective bundles and the cost of care.

08:22 How the largest cost savings come from the improvements in quality.

09:51 What Olivia looks for in choosing centers of excellence.

10:36 Creating market pressure and avoiding consolidation.

11:17 Creating positive disruption in the healthcare system.

12:17 How Olivia chooses the centers and providers she works with in the Purchaser Business Group on Health.

13:12 The quality metrics Purchaser Business Group on Health looks at when assessing providers and centers.

14:04 What a team assessment is, and why it's important.

15:07 How local PCPs have to factor into this health care model.

17:57 How Purchaser Business Group on Health intervenes in the patient journey to ensure that the patient and the employer are getting the best quality care for the best price.

19:39 Olivia's suggestions on how to have an intervening conversation with a patient who has already been told he or she needs surgery.

20:18 EP468 with Matt McQuide.

20:20 EP471 with Christine Hale, MD, MBA.

20:22 EP472 with Eric Bricker, MD.

25:27 "Even at a more competitive price point, there's still an upside to them getting this new business."

25:52 How choosing specific physicians is part of the COE designation process.

27:35 How COEs and their physicians are also involved in continuous quality improvement.

30:56 Employers Centers of Excellence Network collaboration with The Leapfrog Group.

32:24 How the Employers Centers of Excellence Network program is open to any employer, no matter the size.

32:54 What it takes to join the Employers Centers of Excellence Network.