CHICAGO – Blue Cross and Blue Shield (BCBS) companies across the nation boosted their spending to $71 billion in programs that provide incentives for better patient health outcomes while reducing costly duplication and waste in care delivery. The new spending level, revealed in a 2014 survey of BCBS companies, represents a 9 percent increase in claims tied to quality-based programs since the last annual survey was released in 2013. Payments to medical professionals serving patients through these programs represent approximately 20 percent of BCBS medical claims and the initiatives now serve more than 25 million members nationwide.
The breadth of the Blue System programs collectively makes 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, improved patient outcomes and progress in containing costs.
A Blue Cross Blue Shield Association (BCBSA) survey of BCBS companies reveals a vast portfolio of 570 locally-developed, value-based programs in 48 states. The companies have engaged with more than 228,000 physicians and 1,500 hospitals to increase quality and rein in healthcare spending. Value-based care programs are available to federal workers through the Blue Cross and Blue Shield Federal Employee Program (FEP®) and to BCBS customers in other government programs including Medicare and Medicaid managed care.
“Blue Cross and Blue Shield companies are building programs that best support the needs of each community and their members—and have been doing so for decades,” said Scott Serota, CEO of BCBSA. “Local Blue companies continue to lead transformation away from volume-driven, fee-for-service payments toward value-based, coordinated payments. We are pleased to see growth of these programs that align incentives to encourage better care coordination for Blue Cross and Blue Shield members. We are seeing increases in both the number of programs and the impact they have.”
The Blue System portfolios include 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.
BCBS 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.
The programs represent strong engagement with medical professionals and encourage clinicians and hospitals to modernize their practices and coordinate their patients’ care. They also support clinicians by providing them with the tools and research they need to be successful in transforming their own practices. And they 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 better understand the quality and cost of medical services.
Blue companies have been implementing local, value-based care models for more than 23 years. In 1992 local Blue companies and their local medical communities began developing some of the country’s first pay-for-performance programs in Illinois and Pennsylvania.*
* 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.