Global outcomes contracting a bridge between volume and value

Premera Blue Cross believes it has found a way to transition from the fee-for-service payment model toward the newer value-based system--a global outcomes contracting program.

"We wanted to create a bridge from fee-for-service to paying for quality," John Partin, a director on Premera's healthcare delivery systems team, told AIS Health. "The underpinning is we want to control costs and quality, and allow physicians flexibility--let them figure out with our help where are the greatest opportunities for savings."

Covering almost 7 percent of its 1.5 members, Premera's global outcomes program shares about half of the costs saved with participating providers. However, Premera can reduce providers' fees if for the following year if they don't meet certain quality goals.

"There's no specific prescribed penalty, but [the ultimate penalty] could range anywhere from not being in the program to renegotiation of their underlying fee-for-service rate," Partin said.

Although the payments still are based on the fee-for-service model, providers "tend to want [fee-for-service rate] increases over time," creating a bridge to quality healthcare, noted AIS Health.

"This model helps doctors transition away from the current fee-for-service business model to an outcomes based business model, which we believe is a key component to creating a high quality, affordable healthcare system," Rich Maturi, Premera's senior vice president of healthcare delivery systems told FierceHealthPayer in a previous interview.

So far, the program is realizing costs savings that are about 3 percent to 5 percent below average or more than $3 million for large clinics. And in 2011 alone, two of Premera's participating provider groups, The Everett Clinic and The Polyclinic, saved $1.2 million and $2 million, respectively, FierceHealthPayer previously reported.

But despite the positive results, Premera doesn't plan on making the global outcomes program a permanent approach to tackling high costs. It's still considered an "incremental step" between fee-for-service and value-based payments.

To learn more:
- read the AIS Health article