Blue Cross Blue Shield of Michigan advances movement toward value-based care with six more Michigan hospital systems

More than half of Michigan hospitals have now engaged BCBSM in value-based agreements to transform health care reimbursement

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Blue Cross Blue Shield of Michigan

Dec 17, 2014, 11:06 ET

DETROIT, Dec. 17, 2014 /PRNewswire/ -- Michigan's health care delivery system continues to transform its payment structure away from volume, toward a greater focus on quality and efficiency, as six Michigan health systems have signed new value-based reimbursement agreements with Blue Cross Blue Shield of Michigan. To date, 18 Michigan hospital systems, including 71 hospitals, have adopted this innovative payment model.

Today, Blue Cross announced value-based arrangements with the following Michigan hospital systems:

Henry Ford Health System, located in southeast Michigan
Holland Hospital, located in the west Michigan lakeshore area
Hurley Medical Center, serving Genesee, Lapeer, and Shiawassee counties
Sparrow Health System, located in Lansing
University of Michigan Health System, based in Ann Arbor with locations in three counties
UP Health System – Marquette, located in Marquette, with 42 primary and specialty care clinics throughout the region

"By evolving reimbursement away from volume and toward value, we are elevating the importance of quality care and collaboration between doctors and hospitals to achieve the best possible outcomes for patients," said Daniel J. Loepp, president and CEO of BCBSM. "Hospitals are working closely with Blue Cross and their physician partners to improve efficiency and quality of care for a shared population of patients. The hospitals that have joined us today, as well as those over the past 18 months, deserve credit for changing the paradigm for how health care is paid for across the state. Michigan residents reap the benefits."

The agreement with these six systems continues efforts Blue Cross began in 2011, when BCBSM secured its first formal outcomes-based reimbursement arrangement with St. John Providence Health System. The new reimbursement model requires hospitals to identify provider partners in the community; and collaborate with them to develop and implement an effective infrastructure plan that includes an all-patient registry system allowing doctors and nurses both in the hospital and office settings to measure an individual's health performance against similar populations.

Value-based reimbursement arrangements put the patient front and center by transforming how health care is provided. For decades, hospital reimbursement was based on a fee-for-service reimbursement model, which pays hospitals for every service performed no matter how effective. By moving toward value-based reimbursement, Blue Cross incentivizes hospitals and physicians to eliminate re-use and over use of care, and prevent unnecessary re-hospitalizations. The model also promotes integrated services and smoother transitions for the patients moving through the health system.

Blue Cross financially supports hospitals in their efforts to work with physician partners to develop the infrastructure needed to efficiently coordinate patient care and manage population health. When savings are achieved by successfully working together to coordinate the delivery of quality, efficient and effective care, Blue Cross rewards the hospitals and affiliated physicians with a share of the savings.

"This innovative type of reimbursement arrangement with hospitals is a natural next step in advancing Blue Cross' focus on delivering value and achieving better patient outcomes," said Sue Barkell, senior vice president for Health Care Value at BCBSM. "Hospitals understand the importance of outcomes tied to quality rather than quantity, which significantly affects the health of the people in the communities they serve. We are pleased to have so many leading hospitals joining us as partners in our shared effort to advance patient care and improve outcomes in Michigan."

Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. BCBSM provides and administers health benefits to more than 4.4 million members residing in Michigan in addition to employees of Michigan-headquartered companies who reside outside the state. For more company information, visit bcbsm.com and MiBluesPerspectives.com.

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SOURCE Blue Cross Blue Shield of Michigan