BCBSRI resolution: No fee-for-service payments by 2018

Peter Andruszkiewicz
Posted 3/12/15

It is time for bold new goals and dramatic changes in the way we deliver healthcare in Rhode Island. Today, while the vast majority of Rhode Island residents have healthcare coverage the combined …

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BCBSRI resolution: No fee-for-service payments by 2018

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It is time for bold new goals and dramatic changes in the way we deliver healthcare in Rhode Island. Today, while the vast majority of Rhode Island residents have healthcare coverage the combined cost of premiums and cost sharing is too high, and continues to increase.

For decades we have talked about the need to reduce the rate of increase of healthcare spending. Yet, the percentage of Rhode Island’s Gross State Product (GSP) spent on healthcare remains high and is growing (18.6 percent). Only three states (West Virginia, Maine and Mississippi) spend more on healthcare.

There are many implications of higher healthcare costs, including the negative impact on business growth, more money out of consumer pockets, and government dollars spent on healthcare that could be used for economic development, housing or other critical priorities like infrastructure. But we know all this. We have all known this for decades. So why is the pace of change so slow?

Historically, consumers (receiving health insurance coverage principally though their employer) have seen their share of annual premiums and levels of cost sharing rise virtually every year. They really don’t know why. Physicians have largely been insulated from considering consumer costs related to a diagnostic test, procedure, or brand name prescription drug because of a perverse fee for service payment model that actually encourages more services.

But today, in Rhode Island, the root cause of rising overall health costs is not unit cost increases in the hospitals or for the professional services offered by physicians or even for lab or radiology services. Rather, costs are driven by higher and higher levels of utilization of healthcare services provided in a fragmented healthcare market.

BCBSRI and many of our provider partners are working to accelerate change by putting agreements in place that incentivize them to provide coordinated, quality care as measured by individual and population health outcomes; improving communication among providers around their patients and with their patients; and providing consumers with tools to make educated choices.

We are excited to see initial success from some of our innovative programs, including:

Advanced Primary Care: BCBSRI has been focused on increasing the number of patients seen in Patient-Centered Medical Home (PCMH) practices to proactively manage patient care and do more to encourage preventive care/wellness efforts, which keep people healthier.

Pharmacy pilot: On-site pharmacists at several PCMH partners work with physicians and our Medicare members to coordinate pharmacy care, assuring that medications are prescribed and used correctly, guarding against harmful pharmaceutical interactions and encouraging the use of generic drugs.

Maternity Bundle/Orthopedics bundle. These two programs with Care New England and South County Hospital/ Orthopedics pay providers a set fee for the care provided to a patient from pregnancy to birth or for an entire episode of orthopedic care (such as a hip replacement). This encourages improved results, better cooperation among providers and support for the patient after discharge.

Behavioral health: A program in collaboration with Continuum Behavioral Health, HealthPat is designed to provide BCBSRI members with access to comprehensive, coordinated, community-based treatment and support services.

The results of these programs and new reimbursement incentives have been impressive with our physician and hospital partners reducing costs by nearly $15 million over the past two years. More importantly, we are confident that patients are receiving better, more coordinated, and truly patient-centered care.

While this is good news, these results are simply not significant enough and not fast enough.

At BCBSRI, we are pledging to drive change more quickly. We are setting the goal of eliminating fee-for-service payments by 2018. Federal officials have committed that half of all Medicare spending will be linked to value based contracts by 2018 and a new coalition of national health providers and insurers is trying to meet a similar goal by 2020. But we believe that close collaborations with Rhode Island health providers will allow us to meet this critical benchmark towards improving care and lowering cost more quickly than others.

Some providers have already begun working collaboratively with us to achieve this goal. In particular, two stand out with the work they are doing creating accountable care organizations, Coastal Medical and Integra, a Care New England partnership with Rhode Island Primary Care.

We cannot do this alone. No single entity can. We need a state wide, system wide reform strategy with all the players at the table including hospitals, physicians, insurance companies and the State government working as real partners. As payment models change, providers will make more meaningful changes in the way they work with each other to provide care. New approaches will benefit the patient care experience, as well as the patient’s and the community’s pocket book. We plan to continue to collaborate with providers every step of the way.

We will achieve our collective goals of the Triple Aim … better care models, better patient experience, lower costs.

Rhode Island and its residents deserve nothing less.

Peter Andruszkiewicz is the president and CEO of Blue Cross & Blue Shield of Rhode Island.

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