A Minnesota business group that earned national accolades for efforts to improve health care is shutting down because of the economic fallout from COVID-19.
The Bloomington-based Minnesota Health Action Group is planning to close in September after the pandemic severed financial support from member companies, said Mamie Segall, the group’s president and chief executive.
In the 1990s, employers across the country followed the group’s pioneering health insurance program where employees shopped for care based on cost and quality. More recent work promoted better care at clinics and enhanced mental health benefits.
“It’s really the only place where employers as purchasers were part of the conversation and leading efforts around health reform and health improvement,” said Jennifer Lundblad, president and chief executive at Stratis Health, a nonprofit that’s been a member of the group.
“They’ve been around for 30 years doing this work,” Lundblad added. “The fact that an organization with such a history, with such engagement from the employer community … can’t make it through the economic crisis caused by coronavirus, I think, is pretty distressing.”
Employer-sponsored health plans provide coverage to about 150 million Americans, so corporations often talk about how they might use their size to drive health care changes. A high-profile example came in 2018 with the launch of a health care company from Jeff Bezos, Warren Buffett and Jamie Dimon — the celebrity CEOs of Amazon, Berkshire Hathaway and JPMorgan Chase & Co.
With the average cost of family coverage in employer plans now exceeding $20,000, some companies are trying to change the role of intermediaries like insurance companies in order to save money and promote quality. It’s an idea that dates back to the Minnesota group’s work in the 1990s, which the Wall Street Journal described at the time as “one of the most innovative campaigns in the nation’s war on health care costs.”
Just last year, the nonprofit was talking about reinventing the concept to tackle high drug costs. But on Friday, member companies voted to ratify a shutdown on Sept. 30.
The pandemic’s economic upheaval meant some members couldn’t pay dues, Segall said. Revenue from the group’s annual health care summit took a hit this spring, she added, when COVID-19 concerns forced the event to an online format. Members also couldn’t invest in a new mental health program.
“In our community history, they were extremely important,” said Jon Christianson, a health policy researcher at the University of Minnesota who studied the nonprofit’s early years.
Employers often cut expenses like the health care initiative in tough times, he said, even though the programs could deliver long-term benefits. The Minnesota group is one of several regional health care initiatives that have struggled, he added, as growth at member companies means many employees no longer live near headquarters.
“This is not simply here — it’s nationwide,” he said.
Originally, the nonprofit was known as the Buyers Health Care Action Group. Created in 1988, its members included Dayton-Hudson Corp., Pillsbury, Norwest Bank and General Mills.
With the group’s Choice Plus program, big employers in the Twin Cities provided data to workers so they could select among competing networks of doctors and hospitals based on cost and quality. Workers paid lower premiums if they opted for a higher-value network.
For a while, the program seemed to deliver the promise of health reform. Employees paid attention to data when choosing care networks, research showed, and there was some evidence of cost restraint without hurting quality.
But Choice Plus never achieved a critical mass of enrollees. And employers started dropping out to take advantage of lower prices offered by health insurers.
By 2005, the group shifted its focus to Bridges to Excellence, a program that provided financial rewards to clinics where patients did better in managing chronic conditions such as diabetes, vascular disease and depression. Over 12 years, employers backing the program paid out more than $6.5 million to high-performing clinics.
After taking the name Minnesota Health Action Group in 2013, the nonprofit launched studies to detail why costs were high and widely variable for conditions ranging from back pain and spine treatments to joint replacements and specialty drugs.
Most recently, the group focused on the issue of mental health benefits after noting the sizable toll depression takes on worker productivity, medication use and well-being.
Last year, the nonprofit won a federal grant to study gaps in mental health care, so leaders are now looking for a way to transfer the work to another organization, said Nance Lee Mosquera, employee benefits manager for the city of St. Paul and a board member.
“When it’s pure headwinds, you can have the best intentions in the world and it doesn’t mean you can necessarily achieve your goals,” Mosquera said. “But no, I’m not ready to say that we can’t effect change.”
The Minnesota Health Action Group’s board voted in May to wind down the nonprofit’s activities. With six employees, the nonprofit is scheduled to close Sept. 30.
The economic consequences of the pandemic have hit hard for the group’s members and supporters, Segall said. Their financial struggles have sapped resources the nonprofit needs, she said, to effectively work on health care quality while making the system more efficient and affordable.
The group is going away, but Segall predicted employers will find other ways to promote the nonprofit’s goals.
“I think given the continued rapid increase in health care costs … I don’t think employers can afford to not actively engage and pay attention,” she said. “It’s too important. And I think the work will continue.”