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BCBSIL Announces Three New Commercial Accountable Care Organization (ACO) Agreements

Aug. 13, 2014

Chicago, IL — Blue Cross and Blue Shield of Illinois (BCBSIL) announces today three new, strategic agreements aimed at improving patient care while slowing health care cost trends. Accountable Care Organizations are a value-based care model that seeks to move the healthcare industry's payment structure from one based on fee-for-service, or volume, to one that reimburses based on the quality of patient outcomes and patient care. In an ACO, both the payer and provider share financial risk, and in return, shared savings, while improving the care that is delivered.

BCBSIL's provider-partners in the three new ventures will have more than a combined 110,000 patients participating:

  1. Independent Physicians' ACO of Chicago
  2. Northwest Community Healthcare
  3. Illinois Health Partners (the combined Edward Hospital and Medical Group, Elmhurst Hospital and Medical Group, and DuPage Medical Group)

BCBSIL works with each provider to better coordinate care and share valuable data that helps direct providers' efforts toward where the data trends point. BCBSIL also works with each provider group to agree on a set of quality measurements and improvement goals, including reducing inpatient stays and emergency room visits, avoiding unnecessary readmissions, along with improving key care quality measurements.

This brings the number of ACOs developed by BCBSIL in partnership with providers to five, with the first such commercial ACO being initiated in 2010 with Advocate Health Care, the state's largest hospital healthcare system. That agreement impacted more than 250,000 patients, and represents the nation's largest commercial ACO to date. Interest in and the growth of ACOs is a product of the early demonstrated success that illustrates how such agreements have the potential to be a victory for providers, payers, and most importantly, patients, with the eventual objective of lowering health care costs for all while improving healthcare quality.

That early arrangement — now in its fourth year — demonstrated success and the potential of ACOs. Over the first three years of the ACO agreement between Advocate and BCBSIL the medical cost trend was reduced by six percent when compared to the rest of the BCBSIL PPO population in the market. The cost reduction was coupled with improved clinical outcomes for patients, such as lower readmission rates.

Blue Cross built on that success by partnering with OSF Healthcare, Central Illinois' largest hospital health care system last year to launch a sweeping ACO agreement that covered 40,000 OSF patients and Blue Cross members. By advancing that commercial ACO, it complemented OSF's own work as one of just 32 organizations chosen by the Centers for Medicare & Medicaid Services (CMS) to participate as a Pioneer ACO for the federal government.

"These (three new) arrangements represent a continuing shift in the evolving nature of how we pay for medical services, and it moves reimbursement away from costly and uncoordinated fee-for-service payments to those that are payments for value," said William Patten, divisional vice president for Network Management, BCBSIL. "In addition, the arrangement enables the providers to utilize clinical data and best practices to help drive medical decision-making, enhance patient safety and improve quality of care — all supporting the goals of better health and improved outcomes for our BCBSIL members."

Independent Physicians' ACO of Chicago (IPACO)

"While each partnership is unique, it's the first time we've created an ACO with an established physician-owned- only practice like Independent Physicians' ACO of Chicago," says Patten.

The IPACO has more than 600 participating physicians who have come together to advance the future of healthcare by transforming the way independent physicians coordinate and deliver patient care.

"We are proud to partner with Blue Cross on this strategic alliance, which represents the many innovative approaches to healthcare delivery. Our organization is formed entirely of practicing physicians, with no hospital or other entity as owners," says John Venetos, M.D., and President of Independent Physicians' ACO of Chicago. "It's time independent physicians unite and establish an industry-leading organization that can create a sustainable heath care solution for the future — we've done that here."

Northwest Community Healthcare ACO

"The ACO model rewards the innovative, high quality care we aspire to at Northwest Community," says Michael Hartke, executive vice president and chief operations officer, Northwest Community Healthcare.

More than 300 primary care and specialist physicians will be affiliated with the new ACO partnership between Blue Cross and Northwest Community Healthcare.

"The arrangement with Blue Cross shifts the way we are paid for services, but more importantly, it reinforces our focus on improving the overall patient experience," Hartke says. "The bottom line is, we will be reimbursed based on how well we meet predefined quality, patient satisfaction and cost metrics. The continued goal is effective, efficient and equitable care for our patients in the northwest suburbs."

Northwest Community Healthcare has almost 20,000 patients as part of the BCBSIL/Northwest Community Healthcare ACO program.

Illinois Health Partners

"As one of the largest networks of hospitals and physicians in Illinois, we are focused on continually improving the quality of care patients receive, while better controlling costs in this era of health care reform," said Lee McGrath, President of Illinois Health Partners, a network of more than 1,500 physicians and hospitals including DuPage Medical Group, Edward-Elmhurst Healthcare and Northwest Community Health Partners.

"This partnership with Blue Cross Blue Shield of Illinois will help our network reach its goal of a better health care experience for patients by improving quality, efficiency and access. The ACO is another example of the innovative approaches that we believe will lead to truly effective healthcare reform," said McGrath.

View 2014 press releases