; Independence Blue Cross Announces The Results Of Its Accountable Care Organization (ACO) Payment Model
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Press Release

Independence Blue Cross Announces The Results Of Its Accountable Care Organization (ACO) Payment Model

90 percent of region's health care delivery systems participating, results include improved quality and lower medical costs

July 14, 2014

PHILADELPHIA – Rewarding physicians and hospitals for collaborating to improve quality of care and lower costs is making a measureable difference in the Philadelphia region, according to initial results from Independence Blue Cross (Independence), a nationally recognized health insurer serving nearly 8.8 million people in 24 states and the District of Columbia, including 2.5 million in southeastern Pennsylvania. Independence's results demonstrate its success building interest and engagement in its Accountable Care Organization (ACO) payment model, which has been embraced by more than 90 percent of the health care delivery systems in the region.

"We're very encouraged by these results," said Daniel J. Hilferty, president and CEO of Independence. "They demonstrate the power of partnering with health care systems in our region to deliver higher quality, lower cost care with higher patient satisfaction – and transforming the delivery of health care."

Accountable Care Organizations are groups of doctors, hospitals, and other health care providers that come together to provide coordinated high quality care to their patients. The Independence accountable care payment model requires health care providers, often a hospital and its affiliated primary care physicians and specialists, to establish an ACO-like entity that shares responsibility with the insurer for improving clinical performance and cost efficiency for the care delivered to patients.

Key results from hospitals and health system participants in the first year include:

  • Half of the hospitals participating successfully reduced their medical costs, determined by customized targets based on historical costs;
  • Nearly 90 percent of the participants lowered hospital readmission rates with an average reduction of 16 percent;
  • 100 percent of the health systems improved at least one hospital-acquired infection measure or received a top distinction from the Pennsylvania Department of Health for infection control;
  • Nearly all participants scored better in measures that assess patients' experience during their hospital stay, such as their understanding of information about recovery at home.

"It's extraordinary to have such a high rate of engagement in our innovative ACO payment model, which reflects the true partnership we've built with hospitals and health systems," said Doug Chaet, senior vice president of Independence's Contracting and Provider Networks. "Here in one of the nation's most expensive regions for medical care, organized groups of health professionals are showing that more coordinated care can improve health outcomes for people and actually begin to control costs. Our ACO payment model is a critical component of our strategy to work collaboratively with physicians and hospitals to promote high quality, affordable care."

The potential performance-based incentive dollars for doctors and hospitals is expected to approach $150 million in 2014.

"The financial incentives Aria receives through Independence's accountable care payment model have helped us foster greater alignment and collaboration among patients, physicians and hospitals," said Sandra Gomberg, chief operating officer at Philadelphia-based Aria Health System. "It also helps us further invest in our people, technology and care delivery processes for improved population health management."

Under the Independence accountable care payment model, half of the potential earnings for the hospital and physicians are based on their ability to improve their performance related to hospital acquired infections, patient experience, readmissions, and surgical care, and the treatment of heart attacks, heart failure, and pneumonia. The other half of the potential incentive payment is based on their ability to manage costs through greater collaboration and coordination of inpatient, outpatient, ancillary care, home health, prescriptions, and other health services.

"This program is an important step in improving health care in America by focusing on value, not volume," said Eugene Hong, M.D., associate dean for primary care and community health at Drexel University College of Medicine, where the physician practice group is participating in collaboration with Tenet Healthcare's Hahnemann University Hospital. "It gives physicians and hospitals access to crucial data on patient care that enables us to improve services in a way that focuses on keeping our patients healthy and well."

About Independence Blue Cross
Independence Blue Cross (Independence) is a nationally recognized health insurer serving nearly 8.8 million people in 24 states and the District of Columbia, including 2.5 million in southeastern Pennsylvania. For more than 75 years, we have been enhancing the health and wellness of the people and communities we serve by delivering innovative and competitively priced health care products and services; pioneering new ways to reward doctors, hospitals, and other health care professionals for coordinated, quality care; and supporting programs and events that promote wellness. To learn more about how we're changing the game, visit www.ibx.com. Connect with us on Facebook at ibx.com/facebook and on Twitter at @ibx. Independence Blue Cross is an independent licensee of the Blue Cross and Blue Shield Association.

The Blue Cross and Blue Shield Association is a national federation of 37 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.