Centers of Excellence in Healthcare: An Employer's Guide to COE Programs
Key Takeaways
- Concentrating complex, high-cost procedures at high-volume facilities is what lets a center of excellence improve outcomes and lower the total cost per episode.
- "Center of excellence" is an unregulated label, so the decision should rest on demonstrated, risk-adjusted outcomes rather than the designation itself.
- Because these programs reach only a thin slice of total plan spend, they work best within a broader strategy that steers all care toward high-performing providers.
About half of large employers are offering a cancer center of excellence in 2026, according to the Business Group on Health. The thinking here is that, in most cases, facilities that regularly perform a complex procedure have fewer complications and lower costs than those that rarely do. The catch is that these facilities, also known as centers of excellence, are not all built the same. In fact, the name "center of excellence" is an unregulated label, so two programs carrying the name can be quite different.
So, how can you tell a strong program from a weak one? And, even more importantly, do centers of excellence even work? The answer starts with understanding what a center of excellence is built to do.
What are centers of excellence?
A center of excellence (COE) is a facility, or a network of facilities, designated to handle a specific set of high-acuity procedures at high volume under standardized clinical protocols. The model comes down to a simple idea: concentrate complex cases with teams that perform them often, hold those teams to consistent processes, and you get better outcomes at a lower total cost per episode. Employers typically route planned surgeries such as joint replacement, spinal fusion, bariatric surgery, and cardiac procedures to these facilities, often paired with a bundled payment that covers the full episode of care.
The core promise of a center of excellence program
The model's credibility comes from the volume-outcome relationship, one of the most consistent findings in surgical research: facilities that consistently perform a procedure tend to produce fewer complications and lower mortality than those that perform it infrequently. A 2025 systematic review of ovarian cancer surgery found perioperative mortality fell from 2.5% at the lowest-volume hospitals to 0.9% at the highest, and patients at low-volume hospitals were 48% more likely to die after a complication, per a review in Frontiers in Surgery. The same pattern holds across the complex procedures COEs tend to target. Concentrating volume is what lets a facility standardize protocols, sharpen patient selection, and build the team experience that drives those numbers.
Why the center of excellence label is applied so broadly
No regulator controls the phrase “center of excellence.” Health plans, accreditation bodies, and third-party vendors all use "center of excellence" to mean different things, applied through different criteria. The Joint Commission certifies programs against process standards. The Leapfrog Group rates hospitals on safety and procedure volume. Blue Distinction Centers, a designation from the Blue Cross Blue Shield Association, set their own cost and quality thresholds. A carve-out vendor may apply the label to any hospital willing to accept a negotiated rate. Because the criteria range from rigorous outcome audits to little more than a contracted discount, the name on its own tells you almost nothing.
Types of COE programs
Three structural models dominate, and they differ most in how much control the employer keeps over criteria, network, and terms.
What conditions are best suited for a COE program?
COE evidence is strongest where procedures are complex, planned, and high-stakes, and where doing them often clearly changes the result. For the most part, that describes complex cardiac surgery, major joint replacement, bariatric surgery, organ transplant, and oncology surgery.
In addition to quality, centers of excellence also aim to drive down cost for procedures treating these conditions. Depending on where a procedure is performed, it can carry wildly different prices: commercial plans paid hospitals an average of 254% of Medicare rates in 2022, with prices topping 300% of Medicare in some states and falling below 200% in others, according to RAND. The healthcare transparency data makes those gaps visible, though price alone never signals quality.
A COE is built to neutralize that difference in cost. Rather than paying whatever a facility bills under fee-for-service, an employer routes its patients to one vetted, high-volume site and negotiates a single bundled price for the full episode, often holding the facility financially responsible if complications occur. That bundled rate replaces unpredictable billing with a fixed, lower cost, and the site's volume means fewer of the expensive complications and readmissions that drive up an episode's total in the first place.
However, that logic weakens as care gets more routine. Primary care, chronic disease management, mental health, and everyday specialist visits do not hinge on a single high-volume procedure, so there is no discrete episode to concentrate, price, or steer. This kind of care plays out across many providers and dozens of visits over months or years, and its cost accumulates quietly instead of arriving as one large claim. It’s also where most members spend most of their time in the health system, and where the majority of a plan's dollars ultimately go, and a COE has no mechanism to reach any of it.
The model is a precision instrument for a narrow set of planned, high-acuity procedures, and it leaves the larger, everyday share of care untouched. Recognizing that boundary is what separates using a COE well from expecting it to do more than it realistically can.
How to evaluate a center of excellence program
Because the label is unregulated, the burden of proof falls on the buyer. A sound evaluation looks past the arbitrary designation to focus on the evidence underneath it.
Designation vs. demonstrated performance
A designation tells you a facility met someone's criteria at a point in time. Demonstrated performance tells you what happens to patients there now. While they might seem similar, the two are more different than the marketing suggests. Ask for risk-adjusted outcomes, not raw rates: facilities that take harder cases look worse on unadjusted numbers, and weaker performers can hide behind a favorable case mix.
Provider-level variation matters just as much as facility-level reputation, since outcomes ultimately track the performance of individual doctors. The individual physician a patient sees is the biggest factor in healthcare value, as shown by Garner's extensive data that isolates differences across 320 million patients to identify the best-performing doctors in a given specialty and geography.
The four questions to ask any COE partner
- What procedure volume does each facility actually perform, and does it clear the thresholds the evidence supports?
- What are your risk-adjusted complication and readmission rates by procedure, updated within the last year?
- How do you select patients, and how do you handle cases that turn out to be more complex than expected?
- Do we have audit rights to verify the outcomes and the data behind them?
How Garner compares to a center of excellence
Garner operates as an overlay on the employer's existing plan, applying 550+ proprietary clinical metrics across 80+ specialties to steer members to the best-performing doctors already in their network, well beyond the high-acuity surgeries a COE covers. Its dataset covers 320 million patients and roughly 75% of claims nationally. Those surgical episodes are expensive per case, but they are a thin slice of total plan spend. The majority of claims flow through primary care, specialist visits, diagnostics, and chronic condition management, the everyday care a surgical COE never touches.
Garner applies the same performance-first logic a COE uses for one surgery to the full spectrum of care. When a member sees a Top Provider, Garner helps cover their out-of-pocket costs, driving 27% savings per episode of care and 12% lower plan costs on average, with up to 100% of its fees at risk if it does not deliver. It shifts demand toward the best-performing doctors rather than narrowing the network, so you can keep a COE for the procedures it does well and use Garner to guide the far larger volume of decisions that sit outside it.
Going beyond a center of excellence
A COE earns its place doing a specific job: a handful of complex, planned surgeries where concentrating volume improves results. In the case of that specific job, the model delivers. The mistake is treating the label as a guarantee. Because "center of excellence" is unregulated, the decision should rest on demonstrated, risk-adjusted outcomes rather than the designation itself. And the wider the lens, the clearer it becomes that a COE alone cannot bend a plan's cost curve, because it reaches only a thin slice of spending.
A COE covers the procedures it does well, but most of a plan's spend sits outside it. The employers bending their cost curve are not doing it with a better bundled rate on one surgery. They are doing it by steering members to the best-performing doctors across every specialty. That is what Garner is built to do. Request a demo to see how we fit alongside your existing programs.
FAQs
How do centers of excellence reduce healthcare costs?
They reduce costs in two ways.
- By concentrating volume at high-performing facilities, centers of excellence can lower the rate of complications, readmissions, and repeat procedures, which are among the most expensive outcomes in surgical care.
- Centers of excellence usually use bundled rates that cover the full episode, which caps price variation and removes the surprise charges that inflate a standard fee-for-service claim. The savings are real but bounded to the procedures the program covers.
What's the difference between a COE and a high performance network?
A center of excellence is narrow and deep: a small set of designated facilities for a specific list of high-acuity procedures, often with bundled pricing. A high performance network (HPN) is broad: a curated subset of a plan's full network, chosen for value across many specialties, that members use for everyday care. A COE optimizes a few expensive episodes. An HPN optimizes the much larger volume of routine care.
Can I use Garner alongside an existing COE program?
Yes. The two are complementary, not competing. A COE handles the narrow set of surgical episodes it is designed for, while Garner steers members to high-performing providers across every other specialty and visit type. Keeping both means the high-acuity procedures stay with the COE while the far larger share of care gets the same performance-based guidance.