Several years after MGM, one of the largest employers in Las Vegas, rolled the dice on becoming a self-insured health plan for its employees, experts say the move has paid off, according to Keith Boman, a consultant for the health plan, and Matt Morrison, executive director of Healthcare Operations for MGM Resorts International.
When the health plan began in 2012, it had about 5,000 members. That number has grown to more than 20,000, all of them MGM employees and their dependents.
The number of primary care physicians in the narrow network has increased from 18 to more than double that amount.
Self-insured health plans may not be for everyone, like smaller employers, said Morrison, but it worked well for MGM, which has a workforce of 50,000 in Las Vegas.
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"MGM Resorts is in an unique position," Morrison said. "We have a significant number of employees; this is kind of an island in the middle of the desert;, the healthcare community is pretty tight. It's its own entity without a lot of outside influences."
MGM previously offered a self-funded PPO health plan and an HMO to its employees. It still does, along with the self-insured plan called MGM Resorts' Direct Care Health Plan.
MGM went to the new model because Morrison and others saw the need to reduce costs while increasing quality, and access, for their employees.
Most important, Morrison said, was access to care.
In Las Vegas, reimbursement rates are well below the national norm, so primary care physicians see 40 to 50 patients a day, he said.
Boman, chief medical officer for Wellhealth Quality Care, said he's been in practice in Las Vegas since 1980.
"Utilization rates, costs were increasing at no increasing quality," Boman said. "Part of that was driven by the economic reality; there was very poor reimbursement for PCPs. It became very much of primary care on volume basis, not quality basis."
Morrison said MGM looked at consumer-driven health plans but saw no benefit.
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"We didn't see that as anything other than a cost shift to employees," he said, so they approached providers about having a direct partnership with MGM.
MGM offered more for fee-for-service and also a monthly capitation fee, according to Boman. "That got their attention," he said.
The financial advantage for employees is less money out of pocket for copays and deductibles. In addition, wait times for appointments have been reduced to 30 minutes or less.
"We were always self funded," Morrison said. "The structure is not much different than the PPO plan. The only difference is we replaced it with a narrow network."
MGM Resorts' Direct Care Health Plan has become the largest of MGM's three health plans. Of MGM's total 60,000 employees -- with 50,000 located in Las Vegas -- about half are covered through their unions. Of the 22,000 eligible for benefits, up to 11,000 employees have signed on to the self-insured plan.
MGM uses a third party administrator for claims.
The plan uses utilization analytics, population health initiatives and care delivery metrics to improve health outcomes and reduce costs.
The employer has been able to reduce its overall spend on pharmacy and emergency room visits, the latter down by 20 percent, according to Morrison. Hospital bed days are lower with the self insured plan rather than with the company's PPO plan.
The screening rates for cancer and diabetes are well above previous levels.
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"MGM has the resources to follow their spend," Boman said. "The first couple of years were difficult; now over a period time, it has had terrific results. The cost trends really followed what they predicted and have come down and become stable."
Over the last decade, more employers have been moving towards self-funding their medical plans, according to the Self Funding Employer Association. Historically, larger corporations primarily were self funded, but more small and mid-sized companies are taking on the risk, according to the SFEA.
The self-funded plan in Las Vegas is all about primary care, Boman said, and a willingness from top management to take a risk.
"It was total trust and it worked," Boman said. "Doctors are paid better and they do not go through a pre-authorization process."
Twitter: @SusanJMorse