You may have heard the term “center of excellence” thrown around from time to time—and you may have wondered, “What exactly is a center of excellence?”

According to Gartner, a center of excellence is “a physical or virtual center of knowledge concentrating existing expertise and resources in a discipline or capability to attain and sustain world-class performance and value.” For example, the University of North Carolina at Chapel Hill leads the Coastal Resilience Center of Excellence (CRC). At CRC, there are over 30 experts across academic institutions, government agencies, and other entities working together to find solutions to minimize damage from coastal disasters and storms.

What’s a healthcare center of excellence?

Centers of excellence (or COEs) exist in many industries, including healthcare. The Business Group on Health describes healthcare COEs as “groups of healthcare providers who practice high-quality, efficient care for reasonable and predictable prices, often leading to reduced total cost of care with improved outcomes.”

A healthcare center of excellence typically focuses on a specific type of medicine or care delivery. For example, Texas Oncology addresses several different types of cancers, and Premier Spine Care focuses on treatment for spinal issues such as neck and back pain, herniated discs, and sciatica.

What are the main benefits for employers who use a (best-in-class) center of excellence? 

Healthcare centers of excellence are becoming more and more popular among employers as they look to decrease their healthcare spend while also providing top-notch care to their population. According to the Business Group on Health, “when it comes to employers’ strategy to tackle a specific condition, offering a COE provider network is typically at the top of the list.”

Business Group on Health’s 2024 employer survey shows that the interest in COEs will continue to grow in coming years, especially for musculoskeletal conditions and cancer (increases of 31 and 26 percentage points from 2023 to 2025/2026, respectively).

A best-in-class healthcare center of excellence offers several benefits, with the top three being:

High-quality, holistic care from leading specialists

Top centers of excellence put patient care and experience first, setting the bar for high-quality healthcare. Collaborative, team-based care is the norm at these institutions—not the exception.

Rather than tasking patients with running notes, labs, and other information between their different doctors, the healthcare providers on each patient’s care team share information and form treatment plans together. This makes the patient’s care journey much smoother and decreases the likelihood of complications, as they have the opportunity to discuss a patient’s care holistically and take any possible issues into account (e.g., medication interactions and comorbidities).

Centers of excellence also have greater access to innovative and new treatment options, which helps them attract the sharpest minds in medicine because it gives healthcare providers the opportunity to leverage top-of-the-line resources.

As a result, patients have a superior experience that’s more personalized and holistic than it would be at other healthcare facilities.

Improved patient outcomes

A best-in-class center of excellence also delivers better patient outcomes because their high-quality, holistic, and patient-centered approach to care not only fosters increased collaboration, as mentioned above, but also requires healthcare providers share responsibility for the outcome of that care.

There’s plenty of data proving better patient outcomes for best-in-class centers of excellence—including for Carrum Health. RAND Corporation conducted an independent study that found that patients who use Carrum Health (and thus a center of excellence in Carrum’s network) experienced 80% fewer readmissions for joint replacement, spinal fusion, and bariatric surgery.

Decreased cost of care

One of the biggest benefits for employers who provide their employees with access to best-in-class COEs is the cost savings, which often benefits the patient as well. Studies show that the bundled payment arrangements best-in-class centers of excellence typically leverage can save more than $16,000 per surgery.

These savings occur for three main reasons:

• Transparent, pre-negotiated procedure rates
• Some patients were referred to more conservative, less invasive procedures (e.g., they were told to try physical therapy before seeking surgery)
• Patients who received surgery were less likely to experience complications and be readmitted, eliminating the fees for added facility stays, procedures, and medications

What characteristics define a healthcare center of excellence?

Expertise and excellence in a specific field or discipline

Healthcare centers of excellence hone in on one specific area of medicine (instead of treating a wide range of ailments) such as cancer care, total joint replacement, bariatric surgery, and more. Whatever their focus, centers of excellence provide highly customized specialty care within their area of practice.

Access to specialized resources 

Innovative treatment options reign supreme at COEs. These facilities have access to the latest and greatest technology, techniques, and training, ultimately enabling them to provide their patients with the highest quality of care and an experience that’s as convenient, accessible, and pleasant as possible.

Collaboration among experts

Providing more personalized, holistic, and collaborative care helps providers anticipate potential pitfalls and avoid mistakes. Specialists work together to review health history, identify health concerns, find the best possible options for care, and strategize how a patient’s individual circumstances may influence those options.

What makes a healthcare center of excellence best-in-class?

Not all centers of excellence are built the same. When considering a COE benefits solution, employers should aim for a partner whose network only includes best-in-class COEs.

Here are some things that make a COE best-in-class:

• Appropriateness of care: They take a value-based approach, only ordering tests and procedures that are absolutely necessary in order to avoid wasting time or money on ineffective or unnecessary care. When suitable, they will direct patients to more conservative treatment paths.
• Quality: They meet or surpass a set of rigorous quality metrics, such as low patient readmission rates, low complication rates, reasonable patient recovery times, high patient satisfaction, and other metrics that help result in improved outcomes and experience.
• Warranty: A top-notch center of excellence has skin in the game—they eat the costs for complications and readmissions that fall within a certain time period after the procedure or treatment. This helps ensure the care they provide is top-notch because they bear some of the financial risk.
• Bundled prices: Top COEs operate using bundled pricing. These are pre-negotiated, affordable flat rates for end-to-end care. In addition to reducing healthcare costs, bundled pricing facilitates cost transparency and greater healthcare spend predictability.
• Tech-driven: Access to tools that ease the healthcare experience and increase provider access is a priority for the best centers of excellence. Things like AI tools that help predict patient outcomes and triage patient needs are also helping them stand out.
• Experience-driven: Best-in-class centers of excellence are determined to provide superior patient experiences so patients leave feeling both healthier and supported. White glove concierge service is the expectation, not the exception.

So a quick recap: A healthcare center of excellence employs the very best specialists and leverages a collaborative, patient-centered approach that ultimately reduces healthcare spend, provides a better patient experience, and leads to optimal health outcomes.

The information contained on this page is for informational purposes only. No material is intended to be a substitute for professional medical advice, diagnosis, or treatment.