COEs are designated providers that meet high standards for both quality and cost of care for one or more services. These tend to be health systems and hospitals that provide highly specialized treatments and procedures for complex conditions. COEs generally feature high concentrations of expertise centered on specific medical areas/conditions and deliver care in a comprehensive, integrated, and interdisciplinary fashion.

COEs are designed to improve the quality of care and reduce spend for certain conditions, often those with highly variable costs. COEs often reduce unnecessary utilization and procedures by considering alternatives to the most aggressive course of action. This can lead to better patient outcomes and greater patient satisfaction.

COEs aren’t a new concept. However, health plans and employers are facing a confluence of factors, such as rising costs from hospital consolidation, making certain providers and sites-of-care particularly expensive. At the same time, advances in treatment options and innovative new drugs are leading to extremely costly care for some conditions. Therefore, plans and employers are seeking ways to navigate members to high-quality, lower-cost sites-of-care. As such, more plans and employers are turning to COEs.

It can be administratively burdensome for employers and plans to identify and contract with a network of high value providers. Additionally, it can be challenging for provider organizations to maintain excellence with workforce turnover. Employees may not choose to use COEs, and, even after setting up a COE, results are mixed on the effectiveness of these programs.