What is Value-Based Purchasing?
It’s no secret that healthcare costs are spiraling upwards, and employers and employees face challenge after challenge in trying to find ways to cover the cost of health and wellness. Value-based Purchasing, (also known as Group Purchasing), is when two or more independent organizations join forces to leverage better contracts – which includes better service at a lower price – than either company could negotiate on their own. The goals of value-based purchasing are measurable decreases in cost and improved healthcare outcomes.
Here’s how it works. ECHO is an organization that bargains on behalf of its members, and the resulting options are much more desirable than any individual company or employee could obtain alone. New and innovative health related products and services are regularly presented to the ECHO Purchasing Committee. This committee is composed of Human Resource professionals and Business owner members who evaluate every program, ask all the important questions, and perform due diligence before endorsing the product or service for all ECHO members. All recommendations for programs are then presented to the ECHO Board of Directors for final approval.
Realizing the value of this screening process, ECHO members are assured that all programs meet the highest standard of quality for the best price, thus providing them confidence in making their health products and services decisions. ECHO members also save time that would otherwise be spent sourcing individual providers. For these reasons, ECHO membership is often considered an extension of the benefits team.
Employers and employees are facing growing challenges in covering the costs of healthcare, disease management, and preventive care. The public and private sectors are in search of methods to bend the cost curve and have identified value-based purchasing as a powerful strategy.