
Consider for a moment the following statistics:
- From 2012 to 2016, commercial health care prices in the United States rose three times faster than inflation.
- In the Philadelphia area, commercial health care prices rose 16 percent between 2012 and 2016.
- Between 2010 and 2025, prescription drug prices in the United States are expected to increase by 136 percent.
These numbers do not paint an optimistic picture of the cost of health care. That’s why it’s now more important than ever to help lower medical costs.
The Challenges Employers Face
As the new business manager for the 2 – 999 employer group segment, I’m in a unique position to see the challenges our customers face with health care:
- Trying to balance the bottom line with the right decisions for employees
- Navigating a complex health care landscape
- Fostering engagement and well-being within their employee culture
At Independence Blue Cross (Independence), we advocate for our customers by helping to lower costs and reduce wasteful spending related to their care. One way we do this is through value-based contracting.
What is Value-based Contracting?
Value-based contracting means that instead of paying doctors and hospitals for the number of patients they see, we pay them based on their ability to help our members get and stay healthy. Independence is a leader in driving value-based health care through our Facilitated Health Networks (FHN). In fact, we make 18 percent more payments attributed to value-based contracts than the national average.1
How do we achieve this?
- We create contracts with doctors and hospitals that are based on shared accountability, so both parties have a stake in getting (and keeping) patients healthy.
- We give doctors and hospitals real-time data so they can coordinate, manage, and monitor patient care more effectively. Data enables us to ask the right questions so we can measure health outcomes. Is care cost-effective? Are unnecessary visits, treatments, or tests avoided? Do patients stay healthy? Are patients satisfied?
- With a new tool called Pre-check My Script, doctors can see what a member’s out-of-pocket costs will be before they write a prescription. This is important because members are more likely to fill a prescription if it’s affordable. Doctors can also see whether or not pre-certification is required and, if it is, they can complete the pre-certification before the member goes to the pharmacy.
The Numbers Speak for Themselves
One of the best examples of our success with value-based contracting is the FHN contract with the University of Pennsylvania Health System (UPHS). After the first year of our innovative, five-year contract with UPHS, we saw more than a 25 percent drop in hospital readmissions. This represents the largest readmission reduction in the history of both organizations.
Helping Our Members Lead Happier, Healthier Lives
At Independence, we are committed to putting smarter, better health care within reach. We work every day to make this happen by working to make health care effective, affordable, and simple for our customers and their employees. We also work collaboratively with doctors and hospitals to transform the way health care is designed, delivered, and experienced. Our goal is for every decision we make to help our members lead happier, healthier lives.
1 Health Care Payment Learning & Action Network, Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Medicare Fee-for-Service Programs, October 22, 2018