Why a Centers of Excellence Strategy Is Critical to Controlling Employer Healthcare Costs in 2027 and Beyond

U.S. employer healthcare costs are projected to rise 9.5% in 2026, exceeding $17,000 per employee, according to Aon’s 2025 Health Solutions Report. On a compounded basis, costs in 2026 are likely to be 62% higher than 2017 levels, per Business Group on Health’s 2026 Employer Health Care Strategy Survey.

The employers who will manage this environment successfully aren’t the ones who adjust deductibles and hope for the best. They’re the ones taking a strategic approach to specialty care—the largest, most variable, and most controllable slice of employer healthcare spend.
That structural approach has a name: a centers of excellence (COE) strategy—specifically, a value-based COE strategy.

The old playbook is broken

For years, the employer response to rising healthcare costs has followed a predictable script: raise deductibles, increase employee cost-sharing, switch carriers, and negotiate harder with the same broad network of providers. 59% of employers will make cost-cutting changes to their plans in 2026—up from 44% in 2024—with most involving raising deductibles and other cost-sharing provisions, according to Mercer’s 2025 National Survey.

This approach has three problems. First, it doesn’t address the root cause—how care is paid for and delivered. Second, it shifts costs onto employees rather than reducing them, creating retention and morale risks and potentially deterring employees from seeking crucial care. Third, it has a ceiling: there’s only so much cost-sharing employees can absorb before the benefit stops being a benefit.

The fee-for-service (FFS) model that underpins most employer health plans rewards providers for volume, not outcomes. The same knee replacement can cost dramatically different amounts at different hospitals, with no correlation to quality. Unnecessary procedures are financially rewarded. Avoidable readmissions generate more revenue. The incentives are misaligned—and employers and patients are paying for it.

A centers of excellence strategy addresses the problem at its source.

What a value-based centers of excellence program actually does

A value-based COE program is a fundamentally different approach to specialty care. Rather than giving employees access to a broad network of undifferentiated providers, a COE model steers employees to a curated set of top-tier providers—selected based on outcomes, volume, and quality metrics—for specific high-cost conditions and procedures (AKA, the claims that are costing employers the most money).

The mechanics that make it work:

Value-based payment models: Instead of relying on traditional fee-for-service reimbursement, in which providers are paid for each individual service regardless of outcome, value-based COE programs use payment models designed to reward quality, efficiency, and accountability. For example, in one type of value-based payment model called bundled payments, a single transparent, pre-negotiated price covers the full episode of care, including surgeon fees, facility costs, anesthesia, pre-op evaluations, and post-op follow-up. Other examples of value-based arrangements include shared risk, pay-for-performance, and capitation. The common thread is that employers gain greater cost predictability, while providers are incentivized to deliver the right care at the right time.

Clinical appropriateness review: Before surgery is approved, members undergo a clinical evaluation to determine whether the procedure is truly the right path. A significant portion of members who enter the process discover they don’t need surgery at all and are guided toward more conservative, effective treatment options instead.

Rigorous provider vetting: COE providers aren’t selected based on network participation or volume alone. They’re credentialed based on clinical outcomes, complication rates, readmission rates, and peer-reviewed performance data. The result is access to the genuinely best providers—not just the most convenient.

High-touch care navigation: A dedicated navigator guides the employee through every step—from initial consultation through scheduling, travel logistics, pre-op preparation, surgery, and follow-up. The friction that causes employees to delay care or fall through the cracks is eliminated.

Outcome warranties and provider accountability: Providers are held financially accountable if outcomes don’t meet agreed standards. This aligns incentives in a way the fee-for-service model never could—and it means the quality claims COE providers make are backed by something real.

The cost reduction case: what peer-reviewed evidence shows

The financial case for COE programs isn’t theoretical. A landmark study by the RAND Corporation, published in Health Affairs, analyzed real claims data from Carrum Health’s value-based COE platform and found:

• Up to 45% savings per procedure on average
• $16,144 average savings per procedure
• 30% of members initially recommended for surgery were redirected to non-surgical treatment
• Readmission rates decreased by 74 to 86% relative to the national average
• $0 out-of-pocket for most employees enrolled in non-HDHP plans

These aren’t projected savings. They’re validated, peer-reviewed outcomes from real employer health plans—the kind of evidence CFOs and benefits leaders need to build the internal case for change.

The conditions driving the most employer spend in 2026

Understanding where to focus a COE strategy matters. In 2026, a handful of conditions account for a disproportionate share of employer healthcare spend. This is precisely where COE programs deliver the most impact.

Cancer is now the top condition driving employer healthcare costs for the fourth consecutive year, according to Business Group on Health. It accounts for up to 15% of total annual employers’ spend in healthcare. About half of employers will offer a cancer COE program in 2026, and another 23% are considering doing so by 2028, a signal that the market is moving decisively in this direction. Carrum’s Cancer Care program is the industry’s first all-inclusive, value-based cancer treatment solution, delivering up to 30% savings per treatment episode while connecting members to the nation’s leading oncologists.

Musculoskeletal (MSK) conditions—joint replacements, spinal surgeries, minor orthopedic procedures—consistently rank as one of the top three cost drivers for employers. Cancer and MSK rank among the top three highest cost conditions for 80% and 74% of employers, respectively, per Business Group on Health’s 2025 survey. MSK is also where price variation is most extreme; the same lumbar surgery can range from $8,200 to $73,000 with little relationship to quality. COE programs with value-based pricing eliminate that variability entirely.

Bariatric surgery, when delivered through a high-quality COE, reduces long-term comorbidity costs from obesity-related conditions like diabetes, cardiovascular disease, and sleep apnea that compound over a member’s lifetime. Carrum’s bariatric program includes evidence-based evaluations to ensure appropriate patient selection and optimal outcomes.

Substance use disorders, including opioid use disorder (OUD) and alcohol use disorder (AUD), are a growing and often underaddressed cost driver. The cyclical nature of relapses in low-quality facilities compounds both healthcare costs and productivity losses. Carrum’s Substance Use Treatment Program delivers a value-based approach with risk-sharing contracts that can reduce employer costs by up to 45% per treatment episode.

Real-world outcomes: what employers are seeing

The most compelling evidence for COE programs isn’t the projections—it’s the employers who have already made the shift.

Sana Benefits, an Austin-based health benefits provider serving 30,000 members, turned to Carrum Health in 2022 after MSK conditions became one of their highest cost categories. Nearly one in five members had an MSK-related claim, with some individual claims reaching $70,000. After implementing Carrum’s COE solution, , engagement exceeded expectations from the start.

“We had such good engagement right out of the gate,” said Agata Kowalski, Sana’s head of strategic partnerships. “I was genuinely surprised at how many people signed up for an account during launch month. The demand was there.”

The partnership delivered meaningful savings per episode, measurable improvements in member NPS, and access to a surgical network that Sana’s previous COE solution couldn’t match. Read the full Sana case study here.

Prudential has cited significant oncology savings through Carrum’s Cancer Care program, with members facing cancer treatment paying $0 out-of-pocket in many cases. “Carrum Health’s progressive, innovative program design puts quality first for members, who can receive treatment from some of the best cancer centers in the country,” said Daniel Reber, Director of Corporate Employee Benefits at Prudential.

US Foods deployed Carrum’s COE benefit across a nationally distributed workforce in five to six weeks—a rollout that their senior director of health and welfare described as delivering “easy plug and play” access to quality specialty care, lower costs, and the best possible associate experience.

2026 is the inflection point

The convergence of factors driving healthcare costs in 2026 (e.g.,post-pandemic deferred care catching up, cancer and MSK conditions rising, GLP-1 utilization accelerating, and hospital consolidation pushing prices up) means that employers who respond incrementally will fall further behind.

A centers of excellence strategy isn’t a marginal optimization. It’s a structural shift in how specialty care is purchased and delivered—one that addresses both unit cost and care quality simultaneously. The employers who move decisively now will sooner have a lower cost trend, healthier employees, and a benefits story that actually resonates with the workforce.

The data is there. The peer-reviewed evidence is there. The implementation path is faster than most benefits leaders expect.

See how much your organization can save—get a personalized savings analysis from Carrum Health.

Ready to talk through what a COE strategy looks like for your workforce? Schedule a demo with our team.