This week, Dallas, TX-based Baylor Scott & White Health (BSWH) announced a new relationship with American Airlines, creating a lower-cost, narrow-network health plan option for American’s 55,000 employees based in the Dallas-Ft. Worth region.
The new “DFW ConnectedCare” will provide employees access to over 5,000 doctors and 50 hospitals that are part of the Baylor Scott & White Quality Alliance (BSWQA), BSWH’s accountable care organization; participants will also have zero deductibles and receive priority access to network providers. The American Airlines contract builds on a decade of work to move as many of BSWH’s contracts to total cost-risk arrangements as possible, delivering cost savings for Medicare beneficiaries, the system’s own employees, and other DFW-area employers, including Dallas Area Rapid Transit, which re-upped its direct contract with the system this year.
Whereas most accountable care organizations have focused on the Medicare population, three-quarters of the estimated 815,000 covered lives BSWQA will manage this year are in the commercial sector. With growing frustration with high deductibles and other forms of employee cost sharing, large employers like American Airlines, General Motors and others appear to be open to novel network arrangements that offer lower costs and other benefits in exchange for reduced choice—and are willing to work with regional health system partners for a subset of their employee population.
Health systems have a window of opportunity to demonstrate that direct contract arrangements can generate sustainable cost savings and provide the levels of access and service required for a long-term relationship with large employers. But to truly change the commercial market, these arrangements must also be scalable across medium and small employers, who have much lower purchasing sophistication and risk tolerance in selecting health benefits.