Business Health Care Group representatives shared details Wednesday of a new health plan offering for employers in eastern Wisconsin that will roll out next year under its new contract with Buffalo, New York-based insurance startup Centivo.
The new plan with Centivo, which pledges to save self-funded employers at least 15% compared to traditional insurance carriers, begins January 2022. BHCG, a coalition that includes some of the region’s largest employers, has contracted with UnitedHealthcare since January 2016.
Jeffrey Kluever, executive director of BHCG, said in an announcement the change was prompted by frustrations among area employers with the “ever-increasing health care cost trend in our area.”
“With Centivo, our member employers can offer their employees high-quality care at lower and more predictable costs, while at the same time saving significantly on their overall health care spend,” he said.
During a rollout presentation Wednesday, Centivo and BHCG representatives unveiled that Ascension Wisconsin, ProHealth Care, Froedtert Health, Advocate Aurora Health and Independent Physicians Network will participate in the new health plan, and additional systems are “in progress.”
Representatives from BHCG member employers Northwestern Mutual, Baird, Molson Coors Beverage Co. and Kohler Co., Inc. spoke at the rollout meeting about the benefits of the new plan. Other large BHCG members include Acuity, A.O. Smith Corp., Associated Banc-Corp., Badger Meter, BMO Financial Group, Briggs & Stratton Corp., Direct Supply, Inc., Kohl’s, ManpowerGroup and Rockwell Automation. In total, BHCG member employers represent 250,000 covered lives in 22 eastern Wisconsin counties.
The BHCG/Centivo plan will include three network options:
- A broad plan that includes Ascension Wisconsin, ProHealth Care, Froedtert Health, Advocate Aurora Health and Independent Physicians Network.
- An intermediate plan that includes Ascension, ProHealth, Froedtert and IPN.
- And a narrow network that includes Ascension, ProHealth and IPN.
BHCG self-funded member employers can offer Centivo as their sole health plan or alongside other coverage options they choose.
Centivo says it utilizes provider contracting that moves away from traditional payment models that are based on the number and types of services delivered, and towards payment based on value. Eastern Wisconsin – like many areas nationally– sees a wide variety in costs for the same procedures from hospital to hospital, which has led to frustrations among payers over the opacity of pricing.
In a presentation Wednesday, Centivo founder and chief executive officer Ashok Subramanian said the key to the organization being able to offer lower rates than competitors is convening high-value providers. In traditional broad networks, Subramanian said, providers are all grouped together, resulting in a “blended premium” in which high-value providers are “subsidizing” low-value providers. Centivo is instead able to offer more cost-effective networks that actually reflect the cost of care for high-value providers, Subramanian said.
Since launching in 2019, Centivo has raised $70.4 million over three rounds, according to Crunchbase. It raised $34 million in a Series B round in December 2020.