Wellmark touts cost savings from new payment system

Five Iowa health systems, including three Corridor hospitals, saved more than $12 million the past two years while participating in Wellmark Blue Cross and Blue Shield's Accountable Care Organization (ACO) payment system, the insurer announced.

An ACO is a network of local health care groups that work to reduce costs and improve quality through better coordination of care.

Wellmark offers the providers financial rewards if they reach established quality goals and slow the rate of increase in health care spending. At the same time, providers will not earn incentives if quality declines or costs run higher than expected.

The original health care groups participating in the commercial ACO, which was created in 2013, are UnityPoint Health, including St. Luke's Hospital, Mercy Medical Center in Des Moines, Genesis Health Systems, Wheaton Franciscan Healthcare and a collaboration between Mercy Medical Center in Cedar Rapids and University of Iowa Hospitals and Clinics. The ACO has since grown to include eight health systems.

'From a health delivery standpoint, we've changed the way of doing care and changed how we define care,” said Dr. Tim Quinn, chief of clinical operations for Mercy. The implementation of care coordinators, who focus on ensuring patients receive preventive care as well as follow up with patients discharged from the hospital, has been incredibly important, he said.

The collaboration between UI Hospital and Mercy means care coordinators at the hospitals also communicate with one another, so if a Mercy patient sees a specialist at the university, both hospitals are on the same page.

This has helped increase the number of breast and colon cancer screenings and well-child visits while decreasing emergency department visits and hospital readmission rates, said Dr. Jean Robillard, vice president for medical affairs at UI.

'We're following up after discharge,” Quinn said. 'Teams at both institutions are working together to provide better care for patients so they are less likely to be readmitted.”

Overall, the five ACOs that began participating in 2013, which represent more than 358,000 members, reduced hospital admissions by about 12 percent, readmissions by 7 percent and emergency department visits by nearly 11 percent.

Laura Rainey, a spokeswomen for St. Luke's, said the hospital has significantly reduced emergency department visits, resulting in savings of more than $1 million.

'This program is lost revenue for our emergency department, but it's the right thing to do for our patients and is driving down health care costs,” she said.

Wellmark will give the five organizations incentive payments for achieving performance goals, which the insurer measures by looking at how each hospital compares with its historic numbers and by meeting financial targets, said Michael Fay. vice president of health networks for Wellmark.

Traditionally, insurers dealt with fee-for-service payments, meaning companies would pay doctors or hospitals for tests and procedures.

'This is paying for performance,” Fay said. 'It is more value based.”