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How BCBS is transforming its payment model

Report highlights 4 key strategies to Blues' success

Blue Cross and Blue Shield (BCBS) companies understand that transforming the healthcare reimbursement system depends not just on cutting costs but, rather, reinventing it pays doctors and providers.

The transition from fee-for-service payment models to value-based care is no small feat. Over the past several years, Blues companies implemented more than 570 locally developed quality care programs nationwide and tied more than $71 billion in medical claims to programs that focus on prevention, wellness and managing care, according to a new report issued by BCBS.

The Blues pride themselves on linking reimbursements to the quality of care, the report said. This has reduced the number of emergency visits, hospital admissions and readmissions, all while producing better outcomes in key quality measures such as breast cancer screenings.

BCBS attributes its success to four key strategies, according to the report:

  • Changing how providers are paid. Payers should offer financial incentives to doctors and hospitals; this way, providers are more inclined to focus on improving patient health. Payers need to work with providers to introduce this new payment method.
  • Giving providers data. Providers may have some internal analytic tools, but they often need help building multi-payer systems. Payers are well-positioned to provide doctors with the tools they need to implement paying for value, FierceHealthPayer previously reported.
  • Promoting healthy living. To help consumers stay active, it's important to provide wellness incentives that include educational tools that make healthcare quality and cost transparent. Blues companies use enhanced network and benefit designs that encourage consumers to make more informed choices about which provider they choose.
  • Emphasizing savings. Be mindful of costly services that don't add value--duplicative testing; fraud, waste and abuse, and rising pharmaceutical costs that threaten patient access to new drugs.

Additionally, BCBS pointed to its Medicare Advantage (MA) plans, which emphasize prevention, wellness and disease management. The MA plans outperformed traditional Medicare in terms of out-of-pocket costs and consumer satisfaction.

BCBS of Massachusetts has experienced MA success thanks to its partnership with startup investment firm Zaffre Investments, reported the Boston Business Journal. Specifically, the state's largest insurer plans to implement a pilot program that focuses on engaging baby boomers and seniors.

For more:
- here's the report (.pdf)
- read the Boston Business Journal article

Related Articles:
Payers positioned to lead alternative payment model transformation
Using analytics to achieve value-based care in rural areas [Special Report]
Feds speed plans for value-based payments