Blue Cross, Advocate raise bar on accountability

By Bruce Japsen
Posted Oct. 6, 2010 at 7:00 a.m.

The state’s largest health insurer and the area’s biggest medical-care provider have signed an agreement that holds doctors and hospitals more accountable for performance and quality service.

The three-year deal between Blue Cross and Blue Shield of Illinois and Advocate Health Care, which operates 10 hospitals in Illinois, calls for Advocate to limit rate increases it negotiates from the insurance company. In addition, Advocate doctors and hospitals are being asked to meet performance targets tied to improved quality, safety and efficiencies of the medical care provided to patients covered by Illinois Blue Cross HMO and preferred-provider organization products.

Advocate has an opportunity to make money by getting a share of dollars saved under the arrangement. The contract runs from Jan. 1, 2011, to Dec. 31, 2013. Financial terms and related rate increases were not disclosed.

“We are excited about the opportunity to enter into a new era of contracting and relationship with Blue Cross and Blue Shield of Illinois,” said Dr. Lee Sacks, Advocate’s chief medical officer. “By innovatively collaborating with health insurance companies … we will be able to afford the infrastructure investments and incentives for physicians to better coordinate care across the continuum. This will allow for elimination of waste and inefficiency found in more traditional approaches to care delivery.”

The new federal health care law is bringing additional demands by insurance companies that doctors and hospitals be held to higher quality standards. The contract should better position Illinois Blue Cross and Advocate. By 2014, state-regulated insurance exchanges will be created under the health care law that are intended to expand coverage to more than 30 million Americans who don’t have health benefits.

To provide an affordable benefit package, Illinois Blue Cross has said it will likely have to limit consumer choices to doctors and hospitals that adhere to rigorous quality measures.

Among measures to ensure quality, the law requires state-regulated health plans, largely those selling policies to individuals and small to medium-size businesses, to spend at least 80 percent of premium dollars on medical care. That’s squeezing insurers’ profits. So, health plans are using the quality measures as a way to limit choices of doctors and hospitals in certain networks while rewarding better performers.

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  1. Barry Oct. 6, 2010 at 8:33 a.m.

    Even under the new healthcare system, it’s still going to be all about the profits and not the patients.

  2. jack (me) Oct. 6, 2010 at 8:33 a.m.

    Now we’ll have to see whether Evanston/Glenbrook Hospitals (or whatever they will call themselves by the time their next contract comes up) also will sign onto quality control, or just write off malpractice as a cost of doing business, to be passed on.

  3. SDR Oct. 6, 2010 at 9:22 a.m.

    The move towards accountable care organizations is the right call. While the stimulus bill included incentives to promote the adoption of EMR’s, healthcare remains 5-10 years behind other business segments. If they actually do have the appropriate technology infrastructure in place to improve patient outcomes and capture data that identifies inefficient care patterns, this model will work. The bigger challenge is getting Physicians/Nursing/ancillaries/billing to work together in a team based, value driven model. Mayo has been working like this for many years and are considered the gold standard.

  4. juan motime Oct. 6, 2010 at 10:11 a.m.

    Fire Jim Spendry! The Cubs need a new GM.

  5. ange1 Oct. 6, 2010 at 10:24 a.m.

    What do you want to bet that the share of dollars that Advocate gets back by mandating “quality” standards won’t go to those providers who have to do the extra work? It will go to the hospital, but it is the providers who have to deal with the extra burden of compliance. It is almost time to say that we won’t take insurance anymore…do it like dentists do. Bill the patient for services that the patient then submits the insurance company for reimbursement. The doctors want out of this the middleman profit engine that is the insurance industry. Either that or it is time to unionize/organize if we are forced to deal with corporate/hospital administration backroom deals.

    The quality standards out now depend on patient compliance which is out of providers control even if you spend too much time baby sitting the patient. I can say right now that this will make it more likely that we won’t want to take BCBS HMO products…it is easier to shunt those patients elsewhere.

  6. Jeremy Engdahl-Johnson Oct. 6, 2010 at 11:16 a.m.

    Big healthcare reform question: What are the primary operational considerations for health insurance exchanges under the PPACA?

  7. Hospital Finance Guy Oct. 6, 2010 at 12:30 pm

    These arrangements are relatively untested. They require the participation of the insuror (or government payor), the hospital provider, the physician and an organization to serve as the rewarder for efficient care. The expectation is that through incentive driven efficiency: hospital business will decrease, primary care physicians can receive more capitation payments by careing for a larger number of patients, greater control will exist over the referrals to specialists and ultimately the cost to insurance companies will go down with all of the parties sharing in some of the reduction in cost. Ultimately that will help society if premiums also go down and the quality of care is not harmed. First do no harm. The next five years will be very interesting as we watch to see if this works.

  8. blitherer Oct. 6, 2010 at 1:51 pm

    More monopolistic racketeering by the insurance/banking/pharmaceutical industry, time to bust up these monopolies.

  9. Bowl Weevils Oct. 6, 2010 at 2:01 pm

    As a patient of Advocate and a customer of Blue Cross, I would suggest inter-doctor communication as a means to avoid waste and inefficiency. Currently, patients are charged with the task of relaying the content of a visit to one doctor when they visit another. Unfortunately, patients are not qualified to do this: they do not remember potentially important issues because they don’t know what is important, they are frequently not at peak performance due to illness, they do not understand much biology and technical terms.

    It is hypocritical for doctors to whine so much about the insurance company “middlemen” interfering with their business while they are forcing their patients into the role of middleman. Insurance company middlemen are screwing with doctors’ pay. Doctors are screwing with people’s lives.

    Doctors should communicate directly with other doctors to avoid unnecessary harm to patients and unneeded duplicated tests.

    A lawyer would never tell their client to relay important legal information to another of the client’s lawyers because they know their client is not qualified to do so. Doctors also surely know that their patients are not accurate sources of the diagnostic opinions and reasoning process of their colleagues and should stop pretending that they do not.

  10. JOHN C Oct. 7, 2010 at 7:05 a.m.

    IT seems business for BCBS and Advocate is DOWN and they need a way to boost business and profits in the years ahead.

    YOU as a customer have to decide wisely who YOU pay premiums to and Which provider YOU CHOOSE for health care

  11. Bob.D Oct. 7, 2010 at 7:25 a.m.

    It is not clear why consumers would get excited about this announcement.

    Are the ‘quality measures’ set forth as the foundation of this agreement vetted with consumers…?

  12. JOHN C Oct. 7, 2010 at 8:48 a.m.

    Customer and patients will be treated like cattle herds.

    Procedures will be done when it convenient for the insurers and hospitals.

  13. Inside guy/whistleblower Oct. 12, 2010 at 10:47 a.m.

    I am inside the clinics, where chronic care happens everyday, and where so many hospitalizations can be avoided. I am in Trinity and South Suburban, and Evergreen and Beverly Advocate clinics. It is dispicable how poor the diabetes care is in these clinics. If Adv and BCBS had real, um, guts, they would ensure true accoutability that would ensure the docs would do everything possible to get diabetes patients in control, with an A1C under 7%; Apparently, the docs are more concerned with getting a positive patient satisfaction rating than doing the right thing; so, when a patient desperately needs insulin and pushed back on taking shots, the docs give in. I know that, last year, some of these clinics “cooked the books” to look good when they were audited. soon, they won’t be able to change some numbers around so it looks like diabetes is beign treated more aggressively. I wouldn’t allow a family member to go to an adv clinic…not even my pet dog.