Bridges to Excellence, an alliance of major employers and health plans that includes IBM, GE, and Verizon, paid out over $10 million in 2007 to primary-care physicians for improving preventive care and for coordinating their care. Improved care of chronic conditions, screening tests, immunizations, and better follow-up and coordination of cases referred to specialists has been estimated to reduce costs an average of $250 to $300 the first year - most likely the savings will be higher going forward. The companies are using some of the savings to compensate these physicians in the form of $125/patient bonuses. For some physicians, this amounts to a revenue increase of up to 6%
More importantly, this is a watershed change in attitude by payers, who have begun to appreciate the value of prevention and disease management rather than focussing solely on cost shifting and controlling utilization.
In a related story, Excellus BCBS in Rochester NY decided that they needed to do something to address the local physician shortage by increasing reimbursements to 125% of the Medicare rate, to nearly the same rate as the next-largest insurer Preferred Care, which reimburses at 126% of the Medicare rate. This increase of about 3.7% was the first step in a program to attract and retain area physicians.
The increase was funded by:
- A reduction in Excellus’ margins to a razor-thin rate of half a percentage point
- A program to manage CT, MRI, and other imaging costs
- A program at the largest area hospital to reduce hospital-acquired infections and encouraging increased use of generic drugs
Another initiative at the University of Rochester Medical Center reduced local physician overhead expenses by a total of half a million dollars.
The result of this level of cooperation between the hospital, insurer, and physicians is a pay raise for physicians and a higher level of care for the community.
- and from a program to
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