Blue Cross and Blue Shield companies are making progress in its transition from fee-for-service to value-based reimbursement models.
Over the past several years, Blue Cross insurers have been designing and implementing programs that emphasize primary care and try to curtail avoidable acute hospital treatment by reimbursing physicians and hospitals on pre-set, non-fee-for-service contracts.
According to the Blue Cross Blue Shield Association, in 2012, the nation's 37 Blue Cross and Blue Shield companies spent more than $65 billion a year on value-based care – about 20 percent of all claims.
BCBSA's annual survey of Blue insurers found that the $65 billion is being channeled through a "diverse portfolio" of more than 350 local programs in 49 states, covering 24 million members and 215,000 physicians (155,000 of them primary care doctors).
Using variations on the patient-centered medical home and accountable care organization models, the value-based initiatives follow similar themes, including changing payment incentives, partnering with clinicians on information sharing, and engaging patients with wellness programs and price transparency, said Scott Serota, CEO of BCBSA, in a media release.
"Studies estimate that 30 cents of every healthcare dollar goes to care that is ineffective or redundant," said Serota. "With the nation spending $2.8 trillion on healthcare each year, we must lead in improving care while helping to manage costs."
According to the survey, the value-based contracts saved Blue Cross insurers a collective $500 million in 2012 through reductions in emergency room visits, hospital admissions and readmissions and high-cost, high-risk interventions, while also making improvements in access to preventive care and control of chronic conditions like diabetes.
Efforts by Blue insurers to transition away from fee-for-service have been ramping up recently, coinciding with the advent of health reform, but forms of value-based contracting have been in the making for at least two decades, Serota said.
In 1992 Blue Cross companies in Illinois and Pennsylvania worked with local providers to develop the first pay-for-performance programs in Illinois and Pennsylvania.
Blue Cross Blue Shield of Illinois' value-based program continues today, with 75 financial risk-bearing independent practice associations and medical groups covering 700,000 members. Independence Blue Cross's quality incentive payment system now covers about 500,000 members, after a revamp in 2010 that included incorporating medical home measures and increasing earnings for primary care practitioners.
Blue insurers like IBC have also staked out claims to help nurture innovation in primary and chronic disease care at the regional level, such as through a new joint venture with DaVita HealthCare Partners focusing on providers treating high-risk patients with diabetes, heart failure, pulmonary disease and other chronic conditions.