; Blue Cross And Blue Shield Companies’ Quality and Payment Innovations Show Improvements in Patient Care and Cost Savings In Communities Nationwide
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Blue Cross And Blue Shield Companies’ Quality and Payment Innovations Show Improvements in Patient Care and Cost Savings In Communities Nationwide

Medicare should align with private sector programs to improve quality and reduce costs

July 18, 2012

WASHINGTON – The Blue Cross and Blue Shield Association (BCBSA) told lawmakers today that groundbreaking changes in how healthcare is being delivered by Blue Cross and Blue Shield companies, working in partnership with local medical professionals and their patients around the country, are showing concrete results in improving patient health and lowering costs.

Testifying before the Subcommittee on Health of the House Energy and Commerce Committee, BCBSA President and Chief Executive Officer Scott P. Serota said the key to improving the nation’s healthcare system is to move away from a structure that pays for each service, test or procedure separately to one that rewards quality care that is well-coordinated, and provides incentives for medical professionals to adopt the best practices and technologies to coordinate patient care.

Studies estimate that 30 percent of every healthcare dollar goes to care that is ineffective or redundant, Serota said. He said three core strategies are necessary to reverse that trend and create a high-quality, affordable healthcare system.

First, payments must reward quality care and good outcomes and no longer reward the volume of medical services provided to patients. Second, clinicians need individualized technical and other support to modernize their practices and coordinate their patients’ care. Third, consumers should be engaged in making the best decisions for their own health through wellness programs, information that helps them manage chronic conditions and tools that help them fully understand the quality and cost of medical services.

“Changing payments alone will not transform care if clinicians lack the means to identify and implement best practices. Giving clinicians sophisticated information systems and IT tools will not optimize health value if incentives are not realigned to favor outcomes, not volume,” Serota testified. “Neither changing payments nor partnering with clinicians will achieve its full potential if patients are not engaged in helping to manage their own health and care.”

Results from innovations put in place by Blue companies across the country include:

  • Blue Cross Blue Shield of Michigan’s statewide patient-centered medical home, a model that is based on creating personal relationships among patients, their primary doctors and other medical providers to ensure that care is coordinated and chronic conditions are properly managed. Medical providers can receive increased fees for time spent properly managing their patients’ health. Results in 2011 showed that the program reduced hospital admissions for conditions that could be managed through better primary and outpatient care by 22 percent, and also reduced the use of emergency departments and radiology services.
  • A statewide patient-centered medical home pioneered by Horizon Blue Cross Blue Shield of New Jersey, which produced immediate benefits for patients. Preliminary results from 2011 show that patients in the program had an eight percent higher rate of improved diabetes control, as well as higher rates of breast and cervical cancer screenings. The rate of emergency room visits dropped 26 percent, hospital inpatient admissions declined by 21 percent and re-admissions fell 25 percent. The cost of care per member, per month, dropped 10 percent.
  • Blue Cross Blue Shield of Massachusetts developed an Alternative Quality Contract that pays medical professionals a global budget for services each patient is expected to need and also provides performance incentives for delivering higher quality care.  A Harvard Medical School study published in the August 2012 issue of Health Affairs showed that in just the first two years of the program, spending dropped and the quality of care was improved. Overall savings were 1.9 percent in the first year and 3.3 percent in the second. Chronic care management, preventive care for adults and pediatric care all improved.

Serota’s comments were made during a hearing on “Using Innovation to Reform Medicare Physician Payment.” He said the lessons learned in the private sector can help transform Medicare.  “The time is ripe to accelerate the pace of reform for Medicare,” he said. The growing body of private-sector experience in improving care and holding down costs show that these techniques can and should be used in both public and private health insurance programs. 

Read Scott Serota’s prepared testimony in full.  

Find more information on Blue Plan Innovations at bcbs.com

About Blue Cross and Blue Shield Association 

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.