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Starting at the center to transform health care spending

Originally published in The Tennessean, December 2017

For decades, insurers and patients alike were paying providers almost exclusively based on the quantity of health care services delivered. But today, every player in the health care industry is in a state of transition as we work to find the right way to pay for services on the basis of quality or value.

At BlueCross BlueShield of Tennessee, we’re well along that path – and those efforts are bringing better health to our members.

Our pay-for-value efforts span every type of member we serve , including those with Medicare, Medicaid, employer-based and individual plans. And while our programs look a little different for each line of business, they fit into three basic categories.

Our three types of pay-for-value programs

The first promotes clinical quality performance, incentivizing physicians to follow evidence-based guidelines for care and rewarding them for making sure preventive services and screenings are a priority in their daily work.

We track how participating providers perform against a variety of measures, such as adherence to diabetic screenings or recommended vaccinations. Then we raise (or lower) their rates based on how they compare to relevant benchmarks.

Brenda Jones is a BlueCross-employed PCMH care coordinator serving members who are patients at Fayetteville Medical Associates.

The second category centers on the patient-centered medical home (PCMH) model of care, which takes a long-term view and applies a team approach to support people with chronic health conditions like diabetes or asthma.

We relaunched our PCMH program in 2014 with a new partnership strategy that allows BlueCross-employed care coordinators to work directly within some physicians’ offices. We pay physicians an additional monthly fee for engaging more deeply with patients who have chronic health needs, and we provide analytics tools to help identify gaps in needed care.

Our third type of pay-for-value program is a total cost of care arrangement. These programs are built on a foundation of clinical quality and integrated care. Providers who want to participate have to achieve 3- or 4-star quality ratings, but commit to go further.

We empower physicians to strive for value by delivering services more efficiently across a tightly integrated continuum of care while closely managing costs. BlueCross and the physician then share in any savings together.

Total cost of care programs offer the best shot at slowing the upward trajectory of medical spending , because providers and insurers alike have a stake in containing costs for patients. And that’s a win for our members.

Why we focus on primary care providers

We put primary care providers at the center of our pay-for-value strategy because they hold the keys to the preventive and coordinated care that can significantly improve quality of life. Their work can also mitigate the need for costlier services in the future and improve the overall efficiency of health care delivery.

Today, 70 percent of the primary care providers in our networks participate in at least one pay-for-value program, with 41 percent participating in two or more programs.

And our results are ahead of the curve. A 2016 Deloitte University Press study found that just 30 percent of physicians nationwide participate in a value-based payment program.

This year, we invested around $40 million in pay-for-value initiatives. And our participating providers are achieving higher scores against evidence-based quality benchmarks.

PCMH providers in particular are lowering the rates of inpatient admissions and emergency room utilization , while increasing compliance with recommended tests and screenings.

The future of our pay-for-value efforts

Our next frontier is to build a pay-for-value models that further engage specialists, who often support members with more intensive or complex health needs.

Beyond that, we want to help members identify and choose providers committed to the principles of cost-effective, evidence-based and well-coordinated care. That can fundamentally shift the way people seek and receive care – leading to healthier residents and costs that are more manageable for everyone.

About Clay Phillips, Vice President, Network Strategy and Value-Based Contracting

A photo of the authorClay provides strategic leadership in developing and implementing provider networks and leads the company's efforts to evolve provider payment and care delivery models in ways that support better health and cost-effectiveness for our 3.4 million members.

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