; Blue Cross and Blue Shield Companies Direct More Than $65 Billion in Medical Spending to Value-Based Care Programs
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Press Release

Blue Cross and Blue Shield Companies Direct More Than $65 Billion in Medical Spending to Value-Based Care Programs

One in five reimbursement dollars now tied to programs that link contracts with doctors and hospitals to quality, outcomes and cost measures

July 9, 2014

CHICAGO – Blue Cross and Blue Shield (BCBS) companies across the nation are spending more than $65 billion a year—about one in five medical claim dollars—in programs that provide incentives for better health outcomes for patients while reducing costly duplication and waste in care delivery.

The scale and scope of The Blue System programs collectively make the 37 independent BCBS companies the market leaders in developing and executing value-based care programs. These programs shift payment away from the fee-for-service model—which rewards the volume of medical services provided—to one that links reimbursement to the quality of care and improved patient outcomes.

A Blue Cross Blue Shield Association (BCBSA) survey of BCBS companies reveals a diverse portfolio of more than 350 locally-developed, value-based programs in 49 states, Washington, D.C., and Puerto Rico. The companies have engaged with more than 215,000 physicians—155,000 primary care physicians and nearly 60,000 specialty physicians—to increase quality and rein in healthcare spending. More than 24 million BCBS members are currently accessing care through value-based programs.

“Through these innovative, value-based care models, Blue Cross and Blue Shield companies provide patients with access to improved care while also creating value for our members, employers and taxpayers supporting public healthcare programs,” said Scott Serota, CEO of BCBSA. “Studies estimate that 30 cents of every healthcare dollar goes to care that is ineffective or redundant. With the nation spending $2.8 trillion on healthcare each year, The Blues® believe we must lead in improving care while helping to manage costs.”

The Blue System portfolio includes accountable care organizations, patient-centered medical homes, pay-for-performance programs and episode-based payment programs, all aimed at rewarding quality care and improving outcomes for patients.

Blue companies around the country report reductions in emergency room visits, hospital admissions and readmissions and other costly medical interventions. At the same time, there have been measurable improvements in prevention, including better diabetes control and higher rates of screenings and immunizations.  

Initial reports from the survey show savings of $500 million in 2012. BCBSA will survey Blue companies and report findings for 2013 in the fall.

The programs encourage and support clinicians and hospitals in modernizing their practices and coordinating their patients’ care. They also help consumers engage in making the best decisions for their own health through wellness programs, information that helps them manage chronic conditions and resources that help them fully understand the quality and cost of medical services.

“Healthcare is provided locally, and each community has distinct health challenges,” Serota said. “Blue Cross and Blue Shield companies know their communities and are able to work closely with local medical professionals to design programs and maximize value depending on local needs. We’ll continue to expand locally-delivered, nationally-leveraged value-based programs with the needs of patients in mind.”

Blue companies have been implementing local, value-based care models for more than 22 years. In 1992 local Blue companies and their partners in the medical community began developing some of the country’s first pay-for-performance programs in Illinois and Pennsylvania.*

On a national level, BCBS companies since 2006 have recognized medical facilities that demonstrate proven expertise in delivering safe, effective and cost-efficient care for select specialty care procedures through the Blue Distinction Centers for Specialty Care® program. The program was developed to eliminate gaps in provider quality and to guide members to higher value facilities. The program identifies hospitals delivering quality care in bariatric surgery, cardiac care, complex and rare cancers, knee and hip replacements, spine surgery and transplants. These specialty areas comprise approximately 30 percent of inpatient hospital expenditures.

View details of Blue Cross and Blue Shield companies’ value-based care model results.

* BCBSA value-based care survey results are from 2012. BCBSA will announce the breadth of Blue System programs through 2013 in fall of 2014.

* BCBSIL initiated a value-based payment model in January 1992 and has continuously refined the model every year.  Today, the program contracts with 75 financial risk bearing IPAs/Medical Groups and covers more than 700,000 members. Independence Blue Cross’s Quality Incentive Payment System (QIPS) program was initiated in April 1992 and was significantly revamped in 2010 with the addition of medical cost and PCMH measures and significant increases to a PCP’s earnings potential. Today it includes more than 500,000 IBC members.


The Blue Cross and Blue Shield Association is a national federation of 36 independent, community-based and locally-operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for more than 105 million members – one-in-three Americans.  For more information on the Blue Cross and Blue Shield Association and its member companies, please visit bcbs.com. We encourage you to connect with us on Facebook, check out our videos on YouTube, follow us on Twitter and check out The BCBS Blog, for up-to-date information about BCBSA.