Blue Cross Blue Shield of Michigan, Physician Groups and Hospitals Engage in Intense Effort to Enhance Health Care to One Million Michigan Patients

‘Value Partnerships' aims to improve systems of care

MACKINAC ISLAND, MI, June 1, 2006 — Blue Cross Blue Shield of Michigan has launched a collaborative program of unprecedented scope by partnering with physician groups and hospitals to enhance health care in the state. Branded "Value Partnerships," the Blues expect the program to improve the quality and efficiency of health care delivered to more than 900,000 patients visiting their primary care or specialist physicians, and more than 100,000 Michigan patients undergoing certain major surgeries or procedures.

"Value Partnerships represents an unprecedented level of cooperative engagement by physicians, physician groups, hospitals and the Michigan Blues to make fundamental improvements in health care," said Daniel J. Loepp, Blues president and CEO. "This joint initiative is one of the largest of its kind in the country to enhance health care quality and efficiency."

Value Partnerships encompasses eight separate initiatives that involve BCBSM, physicians, physician groups and hospitals "partnering for value" to transform systems of care in the state.

As part of that effort, BCBSM, physicians and hospitals have joined to create five collaborative quality initiatives that focus on common major procedures: angioplasty, cardiac/thoracic surgery, general and vascular surgery, bariatric surgery and breast cancer treatment. The initiatives are expected to enhance care for an estimated 100,000 patients who annually undergo these procedures. Physicians, nurses and researchers will examine care in these selected areas, create databases and funnel the research into patient care to improve quality of care and save dollars by reducing complications and ineffective treatments. BCBSM is providing funding to support the use of data registries and help defray data collection costs for hospitals.

The Value Partnerships umbrella also covers two programs launched by BCBSM for physicians, and a third program for hospitals that provide incentives to physicians and hospitals for continuing to improve the quality of care. These programs are expected to help an estimated 900,000 Michigan patients receiving care from participating physicians and hospitals.

"Working hand-in-hand with doctors and hospitals to identify the most effective processes and treatments is the key to the success we know Value Partnerships will achieve," Loepp said. "Our commitment to evidence-based medicine ultimately will make everyone successful — the doctor, the patient, the insurer and the provider of health benefits. The bottom line results will be improved quality of care for patients, and significant dollars saved for businesses and individual health care purchasers."

The creation of Value Partnerships was spurred by the success of a partnership by the Blues, hospitals and physicians to improve angioplasty care in the state. Participating hospitals observed dramatic decreases in emergency bypass surgeries, heart attacks, kidney failure and mortality among angioplasty patients, leading to the avoidance of $8 million in annual health care costs associated with those complications. The angioplasty initiative encouraged creation of the four additional quality initiatives.

"The quality initiatives are designed with input from physicians and hospitals — strong collaboration that has resulted in a shared sense of ownership and responsibility for their ultimate success," said Thomas Simmer, M.D., Blues senior vice president for health care value and provider affiliation and chief medical officer.

Building another partnership, BCBSM launched its first physician incentive program in 2005 with 10 physician groups, encompassing 1,500 physicians in 33 Michigan counties. The program's objective is to encourage physician groups to more effectively and proactively manage patients with chronic illness, especially those with congestive heart failure, coronary heart disease, diabetes and asthma. Groups are rewarded for implementing programs and building the infrastructure they need to provide high quality care, do so efficiently, and rigorously measure and monitor care quality.

In addition to improving chronic illness care and encouraging patient participation in care management and shared-decision making, the program rewards participating physicians for marked improvements in their generic drug dispensing rate. During 2005 the generic dispensing rate for participating groups increased by three percentage points, yielding an estimated $7 million in drug savings. Referral of patients to care management programs increased by 3 percent, and physician groups have undertaken multiple initiatives to improve systems of care.

Medical Network One of Rochester, Mich., is one of the physician groups participating in the incentive program.

"We chose to focus our efforts to enhance the quality of care to patients with chronic conditions, and have reached some important milestones," said Al Juocys, D.O., of Country Creek Family Physicians in Medical Network One. "For example, we created a team charged with assessing and supporting chronic illness management, and developed disease registries now used by many primary care physician offices to improve management of patients when they interact with us."

BCBSM is launching a second physician incentive program in 2006 called the Physician Organization Gain Sharing Program, which could double the number of Michigan physician groups and individual physicians participating in BCBSM incentive programs. Physician groups in this program will share in the financial value of savings generated from selected improvements in the efficiency of care. The program will also include a focus on improved efficiency in the use of ancillary services such as laboratory and diagnostic imaging services.

BCBSM also continues to develop its Participating Hospital Agreement Hospital Incentive Program, which has rewarded 88 hospitals for their efforts to improve patient safety, quality of care and community health. As hospitals meet program goals, new goals are set to raise the bar on quality. The program was selected by the Robert Wood Johnson Foundation's Rewarding Results program to be evaluated for its impact on quality of care. Results show Michigan hospitals receiving incentives under the program had a higher average score on key quality indicators than hospitals nationally, and also higher than Michigan hospitals that did not receive incentives.

Blue Cross Blue Shield of Michigan, a nonprofit corporation, provides or administers health care benefits to just over 4.7 million members through a variety of plans: Traditional Blue Cross Blue Shield; Blue Preferred, Community Blue and Healthy Blue PPOs; Blue Choice Point of Service; Blue Care Network HMO, and Flexible Blue plans compatible with health savings accounts. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. For more company information, visit www.bcbsm.com.