Statewide collaborative model saves billions in health expenses

Over the last 10 years, Blue Cross Blue Shield of Michigan and stakeholders have prevented $1.4 billion in health expenses. Here's how.

Over the last 10 years, Blue Cross Blue Shield of Michigan (BCBSM) and stakeholders across the state have collaboratively improved clinical quality, efficiency and health outcomes, saved lives and directly prevented $1.4 billion in health expenses.

This is due to Blue Cross Value Partnerships, a roster of multiple statewide programs through which more than 19,000 physicians, 46 physician organizations and 75 hospitals in Michigan collaborate to improve the quality, safety and processes of healthcare.

The programs include:

  • Physician Group Incentive Program – Care process and quality improvement initiatives for physician organizations.

  • Patient-Centered Medical Home – Designation program that strengthens the primary care foundation.

  • Patient-Centered Medical Home Neighbor – Reward program for specialists who actively collaborate with primary care physicians.

  • Provider Delivered Care Management – Care management services offered through the primary care practice.

  • Organized Systems of Care – A community of providers that coordinate care across all settings for a shared population of patients.

  • Collaborative Quality Initiatives – Initiatives, each aimed at improving specific medical or surgical procedures and processes.

  • Hospital Value-Based Payments – Improves individual patient and population-based quality of care and payments based on outcomes.

  • National Solutions – Coordinating Michigan’s quality and value-based programs with similar Blue Cross programs nationwide.

“It’s a collection of many initiatives, each looking at different elements of the healthcare delivery system, according to David Share, MD, MPH, BCBSM senior vice president of Value Partnerships. “Because Blue Cross Blue Shield of Michigan is a statewide plan, we can engage physicians and providers from all areas of the state-urban, suburban, rural.”

Next: Calculating the savings



These programs are structured as collaborative partnerships with providers, according to Share. “From the beginning, we sought a collaborative, partnership effort with the providers,” he says. “Providers help formulate the initiatives, determine what quality areas need to be improved, and manage their progress over time.” 

The savings were benefit cost savings-costs that were prevented due to prevented complications, prevented hospital admissions, prevented ER visits, and appropriate care in the right setting, according to Share.

The program also had 22 collaborative quality initiatives to improve medical and surgical processes, five of which have saved $792 million in prevented complications and improved outcomes.

“Quality improvements resulted in reduced expenses,” Share says. “For example, the Bariatric Surgery collaborative saved close to $35 million statewide due to reductions in surgical site infections and other complications from the procedure.”

This formula was used to determine benefit cost savings:

[Cases in Study Year] * [Change in Complication Rate] * [BCBSM Average Complication Cost**]

**BCBSM Average complication cost = [BCBSM Avg. cost for case w/specified complications] – [BCBSM Avg. cost w/o specified complications]

Additionally, the value partnerships portfolio of initiatives includes the nation’s largest patient-centered medical home designation program, which has saved an estimated $512 million over six years due to prevented ER visits and hospital stays. Value-based payment contracts with 70 hospitals statewide have saved $100 million due to more favorable care outcomes for patients-in just one year, according to Share.

Next: How the model works



Each of the program areas within the value partnerships portfolio has a specific incentive structure, based on different defined metrics involving process improvement, quality, utilization and outcomes. 

Blue Cross provides tools and financing to collect and track data, and to build systems and infrastructure that helps providers deliver more coordinated care.

“Physicians decide how to build those systems, and how to improve performance,” Share explains. “Blue Cross convenes the providers as a neutral facilitator. The providers do the work of process improvement, and share best practices with each other.

For example, the angioplasty collaborative quality initiative has achieved a 52% reduction in complications associated with the procedure, and a 33% reduction in the need for blood transfusions after angioplasty, from 2008 to 2013. These reductions are based on roughly 25,000 procedures each year.

The resulting savings from these clinical improvements:  $362.9 million statewide, from all insurers, over six years, according to Share.

Share advises executives to “engage and involve the providers, give them a say in how programs are structured and measured. Listen to them. Partner with them. Leverage their clinical expertise and their motivation to improve.

“Also, hold communities of physicians/hospitals responsible both for transforming systems of care within practices [patient-centered medical home neighborhood] and across practices [clinical integration] between them and their hospital partners,” Share continues.

To optimize value, transform reimbursement so that it is variable and linked to value, holding providers accountable for population-level cost and quality performance, according to Share.

“They can do this because you have enabled them to achieve higher value with the modernized and integrated systems you have helped them create,” he says.

Share says that the model is replicable in other markets.

“We are talking with other health plans in other states to help them replicate these programs,” he says. “We recently worked with a Blue Cross plan in Philadelphia to launch a urological surgery initiative like the one we have here.”

Specific metrics differ for each initiative, whether it’s the patient-centered medical home program, one of the 22 Collaborative Quality Initiatives, the organized system of care, etc. “Overall, we look at improvements in process, quality and patient outcomes,” says Share.