3 Approaches to Healthcare Centers of Excellence Employers Should Know

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The majority of large U.S. companies have a Center of Excellence in place for at least one condition. Musculoskeletal and cancer COEs are expected to see double-digit growth over the next few years.

If you’ve been exploring options for expanding your COE program or starting one for the first time, you may have noticed a few different approaches to how these narrow networks are built.

COEs have traditionally been facility based, with the idea that certain hospitals and health systems have a high concentration of especially skilled providers, leading to the best outcomes. But in more recent years, other approaches to network building have challenged that traditional approach—and can drive better utilization.

Let’s get into the three approaches to COE network building you’re likely to encounter in your search.

3 Approaches to Healthcare Centers of Excellence

Carrier Centers of Excellence

Carrier COEs are built and vetted by insurance companies. This is a common approach to COEs, with 73% of employers with a COE accessing it through their health plan, according to BGH.


  • Simple for employers to add through existing insurance plans
  • Straightforward member experience
  • Medium-level of network access


  • Typically leverage existing carrier contracts and don’t provide “contract-to-contract” savings for employers. On average, employers pay 250-300%+ above Medicare rates.
  • COEs are selected at the facility level, rather than the provider level, so surgeon quality can be inconsistent
  • Health plan COEs may/may not provide cost share waiving to employees
  • Most health plans don’t promote this feature and many HR leaders aren’t even aware of the benefit tucked into their larger plan, so utilization tends to be low

Facility-centric Centers of Excellence 

Some large employers have partnered directly with hospital COEs and require or encourage employees to receive care exclusively through these specific facilities.


  • Access to nationally known, brand-name facilities if you’re in a major metro area
  • Quality metrics reported by the facility
  • Can be the best option for complex cases


  • Utilization drops off as distance increases
  • Typically cover only a few core procedures, such as bariatrics
  • Unlikely that all surgeons at the facility have the same experience and level of quality
  • Travel required for most employees to access

Third-party/independent Center of Excellence solutions

Third-party COE solutions are built by companies who design high-performance specialty networks that include academic institutions, community health systems and ambulatory surgery centers. Some COE networks, like SurgeryPlus, build their networks at the specialist level, rather than at the facility level.


  • Typically cover a wide variety of plannable procedures
  • Vetted at the individual provider level, not the facility level
  • Flexible plan design options to complement employer health plan and culture
  • Direct contracting with specialists can secure big discounts across facility, specialist and anesthesiology rates. At EDH, for example, we average 130% of Medicare rates.


  • Additional point solution for employees to use
  • Driving engagement typically requires a thorough communications plan

As you consider which approach makes the most sense for your company, consider asking your team these questions to get the conversation started. And if you want to hear from benefits leaders who recently went through the COE search, check out our recent webinar.

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