News: CJ Exclusives

New BCBSNC payment plan focuses on patient health

DURHAM — The state’s largest health insurance company is partnering with five of North Carolina’s major health systems in a pathbreaking, shared-risk payment model designed to improve the quality of patient care and drive down costs.

Patrick Conway, president and CEO of Blue Cross and Blue Shield of North Carolina, announced the launch of Blue Premier at a Tuesday, Jan. 15, news conference and panel discussion. The goal is to have half of BCBSNC members covered by a doctor under Blue Premier contract by early 2020, and 100 percent using Blue Premier within five years.

“There is no payer in the country that has reached that level. This would literally be setting a new standard,” said Conway, former deputy administrator for innovation and quality at the federal Centers for Medicare and Medicaid Services.

Conway said Blue Premier will center more on patients. It has the potential to reshape the state’s health care economy. It makes doctors more responsible for improving patients’ health, reduces waste that some estimates say are between 20 and 40 percent of total costs, allows for more innovation, and encourages collaboration among partners.

Doctors no longer would be paid for every service they provide because performing more procedures doesn’t always improve patient health. Instead, doctors would get a fixed rate per patient to determine the best way to manage care. Performance would be measured against benchmarks. If the patient improves and there’s money left over, the doctor would share the savings. But physicians would be on the hook if goals aren’t met and costs exceed the fixed payment.

Many health care analysts advocate these arrangements. Accountable Care Organizations in Medicare have successfully implemented these reforms, as have some of Blue Premier’s five health system partners.

Cone Health, Duke University Health System, UNC Health Care, Wake Forest Baptist Health, and WakeMed Health and Hospitals have signed onto the program. Conway said these groups joined first because their contracts with BCBSNC came due in 2019. They represent about 25 percent of BCBSNC’s total cost of care.

Discussions will continue with other large health systems such as Vidant, Novant, Mission Health, and Atrium, whose contracts with BCBSNC have not run out. Independent physicians and hospitals also will be recruited, Conway said.

The self-insured State Health Plan, which has the largest membership base in the state and uses BCBSNC as a third-party administrator, isn’t being wooed.

“The treasurer has outlined a different plan in terms of building a customized network for the State Health Plan,” Conway said. Treasurer Dale Folwell wants to implement a reference-based pricing model linking provider payments to a level higher than Medicare reimbursement rates.

Conway said the Blue Premier model could ease restrictions on some health providers. Hospitals get more money from Medicare when physicians rather than nurse practitioners or physician assistants provide services. Medicare ACOs increasingly have been using those lower-level professionals to manage patient care.

He said freeing doctors to do what lower-level professionals can’t should keep quality high and reduce costs.

“We cannot support a health care system in the United States that is fast approaching 20 percent of our GDP,” said Terry Akin, CEO of Cone Health. “We’ve got to move away from a system that incentivizes and rewards us for volume and activity to one that rewards us on health.” 

“We are a state that has great disparities in care, and if we’re really going to make a dent on that we have to demonstrate that we can control costs to the point that we can expand Medicaid,” said Kevin High, president of Wake Forest Baptist Health. “If we don’t do that we will leave a whole segment of our population out. I think that has got to be part of what our longer term goal is here.”

Providers in the Blue Premier program will be able to share claims data and other information so they can track patients who receive care outside of their primary care practice or health system network. That will increase the level of care management. Physical and behavioral health will be integrated.

Donald Gintzig, president and CEO of WakeMed Health, said partners will have greater flexibility to address problems that can lead to poor patient health. Lack of transportation, poor nutrition, and substandard living conditions are among them.

All the participants cautioned that this is a huge change, and to expect both resistance and impatience during the transition. Mistakes will occur. Tweaks will be necessary.

They agreed that confidence in the health care system is flagging due to rising costs, barriers to getting treated, and complexity. Patients might think the shift won’t help them. But they trust their doctors, making physicians’ buy-in a key to restoring patient trust.