Blue Cross And Blue Shield Companies Deliver Message To Capitol Hill: Changing Payment Incentives 'Crucial Step' In Healthcare Reform

System needs to encourage and reward providers based on quality

April 15, 2008

WASHINGTON – The Blue Cross and Blue Shield System strongly believes everyone should have health insurance.  However, the Blues are concerned a healthcare system that is unaffordable for many today will not work for even more people tomorrow.  With 30 percent of today's healthcare spending going to care that is ineffective, redundant or inappropriate, it is crucial to change incentives in the payment system to reward the delivery of high quality care.

Today, three leading Blue Cross and Blue Shield companies came to Capitol Hill to brief the Administration and congressional staff, consumer and employer groups, policy experts, and others, about what they are doing to base payment for doctors and hospitals on the quality of medical care they provide to patients, rather than the volume of services.  Speakers included chief medical officers from Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of North Dakota and Highmark Inc.

The initiatives – which exemplify what Blue Cross and Blue Shield companies are doing nationwide to address the cost of care and improve healthcare quality – represent a key component of Blue Cross and Blue Shield Association's (BCBSA) new comprehensive proposal, "The Pathway to Covering America:  Ensuring Quality, Value and Access."  The proposal is a five-part plan that builds on the employer-based system to promote better quality care, keep healthcare affordable and improve access to coverage.

"We need to change incentives in the healthcare delivery system to encourage and reward providers for delivering high-quality, coordinated care," said Scott P. Serota, BCBSA president and CEO.  "As healthcare leaders for nearly 80 years, the Blues are committed to building a well-functioning and totally integrated healthcare system based on proven clinical outcomes and economic value that will better serve the needs of American consumers – safely, efficiently and consistently."

Highmark Inc.:  QualityBLUE Program
Dr. Don Fischer, senior vice president and chief medical officer of Highmark Inc., provided an overview of the Plan's "QualityBLUE Program."  The program promotes high-quality and effective care in both the ambulatory and inpatient setting by encouraging physicians to deliver evidence-based medical and preventive care based on national standards.  In 2006, the hospital-based program prevented 900 central-line blood infections, saving $32 million.

"We have had remarkable success in Pennsylvania by working collaboratively with our hospitals and providers," said Dr. Fischer.  "Improving quality and value is integral to delivering excellent care and creating a system that is more affordable, effective and accessible to everyone."

Blue Cross Blue Shield of Massachusetts:  Alternative Quality Contract
Dr. Robert Mandel, vice president for healthcare services for Blue Cross Blue Shield of Massachusetts (BCBSMA), discussed the Plan's "Alternative Quality Contract," a new program which focuses on linking accountability with quality.  BCBSMA is looking to offer incentives for providing optimal patient outcomes by working closely with providers to restructure the traditional fee-for-service payment system.

"Our objective was to address efficiency and quality issues in order to achieve a system which delivers safe, effective, and timely patient-centered care," said Dr. Mandel.

Blue Cross Blue Shield of North Dakota:  Patient-Centered Medical Home
Blue Cross Blue Shield of North Dakota (BCBSND) instituted a unique program that utilizes a patient-centered medical home model.  Dr. Jon Rice, senior vice president and chief medical officer for BCBSND, discussed how the Plan's program was able to successfully coordinate diabetes care by assigning disease management nurses to patients through a medical practice serving as the patient's "medical home."  In 2006, the program was able to reduce emergency room visits and hospitalizations which resulted in an average savings of $1,200 per-patient, per-year.

"Through the medical home model, patients with diabetes were able to receive coordinated, high quality care which reduced the need for emergency room visits and hospitalizations," said Dr. Rice.  "By focusing on a collaborative approach, the program successfully improved patient outcomes and value."

BCBSA's Blue Distinction® Designation Program
These Blue Plan programs also complement national efforts to improve quality care such as the Blue Distinction® designation program.  Under Blue Distinction, there are 800 specialty centers in 42 states which have been recognized for providing quality care.  These specialty areas include:  cardiac care, bariatric surgery, transplants and complex and rare cancers.  This program is raising the quality of care being delivered across the country by recognizing medical facilities that meet objective, evidence-based thresholds for clinical quality developed in collaboration with expert clinicians and leading professional organizations.

More examples of initiatives by Blue Cross and Blue Shield companies to improve quality and value are highlighted in “The Pathway to Covering America,” which can be found on the BCBSA website at: www.bcbs.com/issues/uninsured/pathway-to-covering-america/.

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