The Better Hospital Blues


    GRAND RAPIDS — Blue Cross Blue Shield of Michigan would love to see improved quality and decreased risks in the state’s health care delivery system. After all, it’s paying for a great deal of the $50 billion in personal health care provided in Michigan each year. In order to protect the people it serves, and to control its costs, BCBSM recently introduced a number of new initiatives aimed at increasing accountability and quality among health care providers, with the long-term goal of reducing health care costs.

    “Value Partnerships” consists of eight programs designed to “improve the quality and efficiency of health care” for over one million Michigan patients. BCBSM President and CEO Daniel J. Loepp called the program “one of the largest of its kind in the country.”

    “Working hand-in-hand with doctors and hospitals to identify the most effective processes and treatments is the key to the success we know Value Partnerships will achieve,” Loepp said. “Our commitment to evidence-based medicine ultimately will make everyone successful — the doctor, the patient, the insurer and the provider of health benefits. The bottom-line results will be improved quality of care for patients, and significant dollars saved for businesses and individual health care purchasers.”

    Five of Value Partnerships’ programs are collaborative quality assurance initiatives between the insurer and hospitals and physician groups across the state, targeting quality measurement and improvement in several major common procedures. Participating hospitals will share data on angioplasty, cardio-thoracic surgery, general and vascular surgery — essentially allowing them to assemble a massive database to “compare notes” on varying treatment strategies. The programs are modeled around a previous BCBSM effort to improve angioplasty care. This initiative not only led to improved clinical outcomes, but resulted in an estimated savings of $8 million — the sum that would have been spent on treating complications and associated conditions.

    West Michigan‘s health care community has begun to partner with BCBSM in a number of ways. Dr. John Collins, chief quality officer at Saint Mary’s Health Care, said that his organization is sharing data on vascular and general surgery.

    “The focus of the program is to reduce postoperative complications in several vascular and general surgical procedures,” he said. “Extensive data are gathered on 40 patients each week with follow-up after their surgeries on how their recovery is going. BCBS helps offset the expense of collecting the data by paying participating hospitals a small premium on Medicare, Medicaid and BCBS patients. This offset pays for a full-time RN to collect data and follow up after discharge with the patient, as well as conference calls with all participants in the study to discuss care protocols and improvements in quality and outcome.”

    As Collins pointed out, there are multiple advantages to participating in the program. Of course, any research that leads to better, more effective treatment is a desirable goal for any health care provider. But receiving a financial incentive in the form of higher reimbursement rates makes participation all the more attractive. Collins said the arrangement is commonly known as “pay for participation.”

    There is another, similar term for other Value Partnership programs: pay for performance. This increasingly common payment system gives financial incentives to practitioners for providing care that is effective and efficient, according to criteria set by the payer.

    In the case of Value Partnerships, there are three facets to the pay-for-performance system. The largest is a system of chronic disease management, designed to “encourage physician groups to more effectively and proactively manage patients with chronic illness.” Specifically, BCBSM is encouraging hands-on treatment of patients with congestive heart failure, coronary heart disease, diabetes and asthma. When not appropriately monitored, these conditions can be some of the most expensive for the health care system to handle.

    Another staple of BCBSM’s physician incentive program is an effort to encourage the use of generic prescription drugs. Because these drugs are less expensive than their name-brand counterparts, but offer the same dosages and effects, payers love the idea of physicians prescribing them whenever possible. In the case of newer drugs still under patent protection, generics are not available. Under these circumstances, doctors consult with patients to determine if there is an alternative medication available in generic form, or whether the patient is willing to pay more for the name-brand drug.

    Value Partnerships comprises two more incentive programs. The Physician Organization Gain Sharing Program creates a pool of funds “saved” by other quality measures, then distributes incentives from that pool to participating practice groups. This program is further motivation for doctors to bear costs in mind when making treatment decisions, insomuch as it includes “a focus on improved efficiency in the use of ancillary services such as laboratory and diagnostic imaging services.”

    The final element of Value Partnerships is the Participating Hospital Agreement Hospital Incentive Plan, which rewards health care institutions for satisfying an ever-increasing set of quality standards. So far there are 88 Michigan hospitals involved in the program. BCBSM said that those hospitals have displayed higher quality scores than the national average. They also scored higher than Michigan hospitals that do not participate in the program.    

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