Blue Shield ACO reduced costs, lowered readmissions by 15 percent

One key to reducing medical costs is collaboration among insurers and their members and providers and their patients within accountable care organizations (ACOs) because everyone is focused on providing the best healthcare at the lowest costs, Blue Shield of California CEO Bruce Bodaken told Kaiser Health News.

The insurer's own ACO partnership with the state's public employee health program, CalPERS, has demonstrated a 15 percent reduction in hospital readmissions, as well as a reduction in admissions. Blue Shield committed to CalPERS that it would seek a zero percent trend, so CalPERS received a zero premium increase for 41,500 members in the ACO.

"We did it by becoming more efficient, so it's not a function of losing money," Bodaken says. "Blue Shield, Catholic Healthcare West and Hill Physicians agreed to share the risk to deliver promised savings, and all of us were able to achieve a modest bottom line."

He added that the healthcare industry has learned from mistakes made in the 1990s when HMOs were prevalent. "[W]e understand that not working through the physician is a huge mistake," Bodaken explained. "We've got to have a collaboration so as we make determinations from medical policy, physicians are going to support and can tell the members 'we think this is the best care possible you can get.' Saying that your HMO won't let you have it or prescribe it, obviously that's not a recipe for success with the consumer."

To learn more:
- read the Kaiser Health News article