Payer, Provider Value-Based Contract Targets 10% Lower Cost Trend

Blue Cross and Blue Shield of Minnesota (Blue Cross) struck a six-year value-based contract with Allina Health that focuses on quality improvement and cost savings through care coordination, telehealth, and preventive care, the payer announced.

Allina Health is Blue Cross’s largest provider partner in Minnesota. This partnership will span a large population of Minnesotans because Blue Cross covers about a third of the state and Allina Health conducts more than 6 million patient visits annually. The press release indicated that the contact would impact around 130,000 Minnesotans.

“Months prior to the onset of the COVID-19 pandemic and its impact on nearly every aspect of the American health care system, Blue Cross and Allina Health began reimagining the traditional construct between provider and payer in order to better align the relationship around a shared vision of lower cost, higher quality and more accessible health care,” the press release shared.

The contract is considered distinctive due to its length and its reimbursement model.

This value-based contract aims to lower Blue Cross members’ healthcare spending cost trend by ten percent in five years.

Allina Health has significant incentive to achieve these outcomes. If the provider demonstrates strong results pushing toward the final goal of ten percent lower cost trend, Blue Cross will reimburse Allina Health five to ten times the normal amount that providers receive for positive patient outcomes.

Blue Cross will be looking for effective use of preventive care and coordinated care strategies. Both Blue Cross and Allina Health indicated that by using these tactics to lengthen appointment times and patient-provider interactions, they can also decrease health disparities.

“Both organizations believe the sheer scale of this agreement will set a high bar for value-based care, driving innovation and transformation in health care at a pace that would take decades under more moderate contract terms,” the press release stated.

Allina Health’s strategy will include at least three facets: care coordination, telehealth, and preventive care along with other quality measures.

In accordance with Blue Cross’s goals, Allina Health will grow its care management and care coordination. This includes establishing lower-cost care sites and more care delivery channels. Blue Cross and Allina Health will improve patient experience by exchanging certain patient information.

The pandemic also forced the greater adoption of telehealth and virtual care. Stakeholders across the industry are finding impetus during the coronavirus pandemic to accelerate their virtual care and telehealth adoption.

Blue Cross and Allina intend to leverage this trend for their new value-based care model.

Telehealth and virtual care serve value-based care initiatives by offering greater access to care in a range of formats that can be customized to patient needs. Thus, the partnership will focus on expanding these options for Minnesotans.

While a lower cost trend is one of the primary goals of this value-based contract, the partners were quick to stress that improving quality is the ultimate aim and that cost savings must be assessed in light of quality of care improvement.

To measure quality of care improvement, the payer will focus on preventive care success, chronic disease prevention in particular. Preventive care has taken center stage as the healthcare system attempts to avoid higher cost treatment downstream due to deferred care and protect vulnerable populations.

The organizations also argued that adopting a value-based care contract protects providers during major care disruptions, such as the current global pandemic.

“We’ve lived in a volume-based health care world where the profitability of sickness is greater than the profitability of wellness,” said Craig Samitt, MD, president and chief executive officer at Blue Cross.

“COVID-19 has hastened the need for change, and our value-based partnership with Allina Health is already proving to be a positive example of what’s possible when health care plans and health care providers work collaboratively on shared challenges to improve the physical, mental and financial health of our patients and members.”