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ND Blues shifting to paying providers based on performance

FARGO -- Blue Cross Blue Shield of North Dakota is launching an initiative that includes a gradual shift to paying health providers based on patient outcomes to reward performance rather than volume.

The Blue Alliance pay-for-performance program involves a stronger collaboration with the state’s health providers with the aim of providing care that is more effective and more efficient, with a greater emphasis on prevention and wellness.

Ultimately, patients will benefit from receiving care that is better coordinated by a team of providers whose decisions are guided by sophisticated data analysis, Blue Cross Blue Shield administrators said.

By rewarding better care, the initiative also will help to restrain the spiraling cost of health care.

“We know the cost of health care is not sustainable,” a problem that is exacerbated by the aging population of the baby boom generation, said Dr. Lisa Faust, the North Dakota Blues’ senior medical director for mental health.

“There’s sort of a perfect storm,” she said, noting that an aging population requires more health care. “There’s this kind of demand spiral. What we know is our children are going to pay higher taxes if we don’t change things.”

Blue Alliance means a shift from “sick care to health care,” with a more proactive approach to prevent acute illnesses, Faust said. Over time, health providers will assume greater financial risk for their performance and be held financially accountable for the results.

The Blue Alliance program is an outgrowth of a similar effort, mediQhome, that targeted chronic disease patients and managed their care through collaborative teams directed by a primary care provider.

It’s also part of a growing movement, by both public and private payers, to get away from paying clinics and hospitals simply for providing services -- in effect, rewarding volume -- but based on their performance, as measured by quality indicators.

The federal Medicare and Medicaid health insurance programs, for example, have been moving rapidly to pay-for-performance. By the end of 2018, half of its payments will be based on meeting value measures, not volume. That’s up from 30 percent this year.

“We have to go at a pace that our providers can tolerate,” Faust said, while at the same time not dragging out the transition too long. No hard deadlines have been established. The initiative also provides flexibility, enabling health providers a lot of options in how they implement the program.

“We need to create that win-win situation,” said Chelsey Matter, the North Dakota Blues’ director of provider relations. Clinics and hospitals have provided their input to help shape the program, and share with insurers the desire for better and more efficient care, she said.

Leading doctors from Sanford Health and Essentia Health said their health systems welcome the changes, and said they have been taking steps for years in preparation for the trend toward  value-based payments.

“This really aligns with a lot of the things we are already doing with patients,” said Dr. Douglas Griffin, vice president and medical officer for Sanford in Fargo. He supports the focus on value.

“It’s good medicine,” Griffin said. “It’s really focusing on a lot of common-sense stuff,” including screening, vaccinations and well-child visits.

Those who pay for health care are demanding better, more affordable care and greater accountability from health providers, said Dr. Michael Van Scoy, Essentia’s medical director of population care management. “We have to respond to that,” he said. “We want to take a more proactive approach.”

Information provided by health insurers help to identify patients who are at risk and those who are missing certain quality interventions, Van Scoy said. “We get great information from the health plans.”

It will take time to show significant results from the shift to value, but those results will become evident, said Dr. Julie Blehm, a senior medical director for North Dakota Blue Cross Blue Shield.

“Changing health care will not be an overnight result,” she said. “I think we’ll see it in 10 years, maybe even five. It’s not a rapid process.”