Michigan Blues reaches value-based payment agreement with Trinity hospitals

Blue Cross Blue Shield of Michigan has reached a new value-based reimbursement model with Trinity Health-Michigan that aims to reduce premiums while coordinating care.

Blue Cross and Trinity called the new model a first-of-its-kind arrangement that shifts reimbursements from fee-for-service payments to a focus on value, efficiency and improved population health.

Under the three-year contract, which is based on an agreement that began May 2012 between Blue Cross and Trinity to partner on value-based payment methods for hospital services, Trinity's 12 hospitals and doctors will work to eliminate unnecessary and redundant medical tests and office visits. Blue Cross will then reward Trinity with a share of the cost savings achieved, reported the Grand Rapids Business Journal.

"Fee-for-service reimbursement does not account for quality or value," Jeff Connolly, Blue Cross president for West Michigan operations, said in a statement. "It has been a significant factor in the huge growth of healthcare costs over the last decade--costs that are now unsustainable. It's time to change what isn't working, and Trinity has joined the Blues to move this change forward responsibly here in Michigan."

Susan Barkell, a senior vice president at Blue Cross, told the Detroit Free Press that "ultimately, the customers will pay less in premiums because as care becomes better managed, the costs go down, so premiums would ultimately go down."

To learn more:
- here's the BCBSM statement
- read the Grand Rapids Business Journal article
- see the Detroit Free Press article