In the latest blow to fee-for-service medicine, the nation’s Blue Cross and Blue Shield plans say they are spending more than $65 billion annually — about 20 percent of the medical claim dollars they pay — on “value-based” care that rewards better outcomes and keeps patients healthy.
The moves by the nation’s 37 Blue Cross and Blue Shield companies, a summation of which was announced today, are the latest push away from the traditional fee-for-service approach to medicine that can lead to overtreatment and unnecessary medical tests and procedures.
The Blue Cross Blue Shield Association, which is the trade group and lobby for Blue Cross plans, said its member plans have a portfolio of more than 350 “locally-developed, value-based programs in 49 states, Washington, D.C. and Puerto Rico.” These more accountable contracts are with more than 215,000 physicians, the association said.
The Blue Cross Blue Shield Association says the contracts with providers are taking on many forms. They include “pay for performance programs,” “episode-based payment programs,” “patient-centered medical homes” as well as so-called accountable care organizations (ACOs), a rapidly emerging health care delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs.
“Studies estimate that 30 cents of every healthcare dollar goes to care that is ineffective or redundant,” Scott Serota, chief executive officer of the Blue Cross and Blue Shield Association said in a statement. “With the nation spending $2.8 trillion on healthcare each year, The Blues believe we must lead in improving care while helping to manage costs.”
The Blue Cross plans are the latest of a parade of health insurance companies touting their moves away from fee-for-service medicine as more Americans look for affordable health care coverage, particularly the 8 million people who purchased plans on exchanges under the Affordable Care Act. Blue Cross plans are big players on government-run exchanges under the health law.
Blue Cross rivals like Aetna AET +0.55% (AET), Cigna CI +0.08% (CI),Humana HUM -0.14% (HUM) and UnitedHealth Group (UNH) are also increasing the number of value-based contracts they have with doctors and hospitals. These insurers, which are publicly-traded, are likely to update their efforts during second quarter earnings reports over the next month.
UnitedHealth, for example, has said it expects accountable care contracts to more than double from $30 billion annually today to $65 billion by the end of 2018. And Aetna has said more than 20 percent of its medical costs will come from value-based contracts this year.
The insurers say value-based contracts are local in nature and there isn’t a one-size-fits-all approach to value-based care. Says the Blue Cross association’s Serota: “We’ll continue to expand locally-delivered, nationally-leveraged value-based programs with the needs of patients in mind.”