Blue Cross Blue Shield of Michigan continues payment evolution by collaborating with four more health systems to improve quality and patient outcomes

Value-based hospital reimbursement arrangements designed to improve coordination and efficiency of patient care while holding down costs

May 22, 2014, 10:00 ET from Blue Cross Blue Shield of Michigan

DETROIT, May 22, 2014 /PRNewswire/ -- Four more Michigan health systems have agreed to participate in Blue Cross Blue Shield of Michigan's value-based hospital reimbursement model – bringing the total number of hospitals involved in this innovative payment model to 45.

Under the new reimbursement arrangements, hospitals are given the opportunity to achieve infrastructure funding to construct modern and efficient ways to coordinate patient care and manage population health.  Hospitals then share part of the savings achieved when they and their affiliated physicians successfully work together to coordinate the delivery of quality, efficient and effective care.

"The emphasis on encouraging hospitals and physicians to work in close concert to improve patient care and lower costs is a key element in shifting our model of care from one based on volume, to one that focuses on providing high quality care at a lower cost," said Daniel J. Loepp, president and CEO of BCBSM. "The hospitals joining us by adopting this model are leading an evolution in health care delivery by recognizing that patient outcomes – not patient volume – should be the foundation for reimbursement. Whether you have a Blue Cross card or not, this new approach benefits everyone in Michigan."

New arrangements were announced between Blue Cross and the following Michigan hospitals:

  • Detroit Medical Center, located in SE Michigan, which includes Harper University Hospital; Huron Valley Sinai; Detroit Receiving; Sinai Grace Children's Hospital of Michigan
  • Allegiance Health, located in Jackson
  • Dickinson County Healthcare System, located in Iron Mountain
  • Metro Health Hospital, located in Wyoming

The agreement with these four systems continues efforts Blue Cross began in 2011, when Blue Cross secured its first formal outcomes-based reimbursement arrangement with St. John Providence Health System. The new reimbursement model requires hospitals to identify provider partners in the community; and collaborate to develop and implement an effective infrastructure plan that includes an all-patient registry system allowing doctors and nurses both in the hospital and office settings 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 by helping to eliminate re-use and over-use of care and prevent unnecessary re-hospitalizations. Working together helps ensure the right care is given at the right time.

"No one wants to stay in the hospital longer than necessary or to go through the same tests with multiple physicians at multiple locations," said Sue Barkell, senior vice president for Health Care Value at BCBSM. "With the new reimbursement model, patients will see less fragmented care and more efficiency in treatments. This approach shifts the focus of care to what is truly important – keeping patients healthy while keeping costs down.

Over the past two and a half years, we've accomplished a lot with partners who want to be innovative and really move the needle forward. It's been and continues to be an exciting time of change, and we look forward to continuing to make progress for all Michigan residents by creating a system that supports better quality care at lower costs."

Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. BCBSM provides and administers health benefits to more than 4.4 million members residing in Michigan in addition to employees of Michigan-headquartered companies who reside outside the state. For more company information, visit and


SOURCE Blue Cross Blue Shield of Michigan