June 17—“All of the good that the [Affordable Care Act] will do for folks will cost the country, the people, employers—all of us,” Robert Kolodgy, senior vice president, finance, and CFO for Blue Cross Blue Shield Association (BCBS), told healthcare finance professionals at ANI: The HFMA National Institute on Monday. “That’s not a bad thing; it’s just a thing—and a thing that we need to be aware of.” 

Each of us will be affected in some way by the Affordable Care Act (ACA), Kolodgy said, particularly as an estimated 25 million people are newly insured. “Somebody’s going to have to pay for these 25 million people to get coverage,” he said, adding that those who become newly insured under the ACA will generally be sicker than the average person with insurance coverage, and the benefits of expanding coverage will come with a cost that will be felt by providers, payers, and consumers. Kolodgy  

Now more than ever, it is imperative that payers and providers work together to improve value—particularly at a time when healthcare spending accounts for 18 percent of our nation’s gross domestic product, at $2.7 trillion, and when 30 percent of the dollars spent on care are directed toward ineffective, redundant, or harmful care, Kolodgy said. 

Getting There from Here

How can payers and providers more effectively collaborate to improve value? Kolodgy shared these four starting points for transformation. 

Improve access.

“We need to lead in primary care,” Kolodgy told healthcare finance professionals at ANI. BCBS is working to encourage students to enter the medical field by offering scholarships to young people who wish to study medicine and who are willing to work in rural areas. 

Improve quality.

Both payers and providers can work together in promoting the use of evidence-based care protocols and in recognizing superior performance. For example, by reducing variability in hip and knee replacement procedures, one program has reduced costs by 23 percent, Kolodgy says. 

Maintain affordability.

Providers and payers should work together to design and implement new patient-centered care models, increase transparency for consumers, and develop innovative payment structures. “We need to give folks good information … that allows them to think through [their care options],” Kolodgy said. One patient-centered medical home model supported by BCBS in Michigan has improved patient access and reduced the use of imaging and emergency department services—and has saved $155 million in one year. “These are programs that are producing good results. How do we replicate them?” Kolodgy said. 

Promote individual accountability.

Empower consumers with information that enables them to make more informed healthcare choices—and make them accountable for their own actions in regard to their health, Kolodgy said. Providers and payers can work together in designing incentives for consumers that encourage them to make responsible decisions regarding health and wellness and utilization of healthcare services. 

Collaborative Leadership

Above all, providers and payers should recognize that they have a common purpose and common goals and should determine the terms of engagement for collaboration, Kolodgy said. “We need to move the dialogue away from the money,” he said. “Both of us have to be willing to support each other at some point.”

Publication Date: Monday, June 17, 2013