Oakwood joins Blue Cross Blue Shield in new reimbursement model

Oakwood Healthcare is partnering with Blue Cross Blue Shield of Michigan to improve patient outcomes while increasing efficiencies and reducing costs.

Oakwood is participating in Blue Cross Blue Shield of Michigan’s value-based hospital reimbursement model, which is designed to evolve the focus of hospital payments toward supporting hospitals’ success in improving patient outcomes and delivering care to patients in a more coordinated, efficient fashion working in close concert with physicians and physician organizations. Blue Cross’ model has now been embraced by seven leading Michigan health systems.

“Our new approach to reimbursement puts the patient front and center and represents a new standard for how hospitals are paid,” said Daniel J. Loepp, president and CEO of BCBSM. “The hospitals joining us in expanding this model across Michigan are on the leading edge of transforming how health care is provided. Their commitment will benefit thousands of Michigan residents by enabling us to focus on what truly matters – keeping patients healthy while keeping costs down. In a marketplace where price is paramount, we are working together to make health care more effective, efficient and ultimately, more affordable.”

The new reimbursement model calls for hospitals to identify their provider partners in the community and work with them to develop and implement an infrastructure plan that includes an all-patient registry system that allows caregivers at the hospital and in the physician offices to measure an individual’s health performance against similar populations. This approach promotes coordination of care among all providers who treat the same patient which improves care quality, and helps ensure the right care is given at the right time. The hospitals also will work with their physician partners to develop work plans aimed at improving the health of the patient population they serve. The partnership includes Oakwood Hospital-Dearborn, Oakwood Hospital-SouthShoreOakwood Hospital-Taylor and Oakwood Hospital-Wayne.

"This was an easy decision to make. It’s right in line with our activities of recent years and why we formed the Oakwood Accountable Care Organization in 2011,” said Bill Isenstein, executive director of the Oakwood ACO. “Under the Oakwood ACO, Oakwood physicians and the Oakwood Healthcare System partner to provide patients with the right care at the right time in the right setting. This innovative BCBSM contract encourages hospitals and physicians to work together to improve patient outcomes, increase the quality of care while reducing costs to the individuals and communities we serve.”

Previously, hospital reimbursement placed sole emphasis on the long-standing fee-for-service reimbursement model, which pays hospitals for every service performed. By moving toward value-based reimbursement, Blue Cross rewards the hospitals with a share of the savings achieved when hospitals and physicians coordinate the delivery of efficient and effective care, eliminate re-use and over use of care, and prevent unnecessary re-hospitalizations.

“Instead of paying solely for the volume of services provided, we can now leverage our reimbursement approach to incentivize collaboration and focus on rewarding patient outcomes,” said Susan Barkell, senior vice president for Health Care Value at BCBSM.

“This truly is an exciting and innovative approach and we’re looking forward to working with our hospital partners to provide the most effective care possible at lower costs,” she added. “The commitment from these hospitals to evolve the traditional payment model in ways that support a stronger focus on quality patient outcomes further demonstrates their leadership.”