Daniel J. Loepp Op-Ed in Detroit News Celebrates Success of Michigan Hospital Partnerships

Daniel J. Loepp

Initiatives under way across Michigan that benefit from Blue Cross’ support are receiving national recognition for their success in slowing health care costs, BCBSM President and Chief Executive Daniel J. Loepp writes in a recent Detroit News opinion piece.

In the op-ed, “Michigan sets example for saving health care costs,” Loepp discusses how four BCBSM-led Collaborative Quality Initiatives saved $232.8 million by improving clinical quality and patient safety. He also touches on the Blues’ support for the Keystone Center for Patient Safety and Quality, a voluntary program run by the Michigan Health and Hospital Association that has helped improve health care and lower costs.

Loepp writes:

The programs that Blue Cross has under way with doctors involve the voluntary participation of often competing hospitals or physician groups and a willingness to share and compare data around common medical procedures.

This level of collaboration is unprecedented in Michigan health care.

With help from the University of Michigan Health System and Beaumont Hospitals, we’ve been able to determine best-practice protocols for procedures like bariatric surgery, breast cancer treatment and angioplasty.

By having everyone work together, we can determine what’s working and what isn’t, giving huge systemwide boosts to patient safety and clinical quality while lowering costs.

Read the rest of Loepp’s commentary here.

Quality Improvement Projects in Michigan Helping Bend the Health Care Cost Curve

If you are concerned about what’s going on with the escalating cost of health care in this country, you should feel good about the work going on right here in Michigan.

Four programs BCBSM sponsors with Michigan hospitals have saved a combined $232.8 million over three years, lowering complication rates for Michigan patients and literally saving lives.

The Collaborative Quality Initiatives, as we call them, target health care quality, patient safety and improved outcomes. They cover some of the most commonly performed and costly areas of medical care: general surgery, cardiac and thoracic surgery, angioplasty, and bariatric surgery.

Widespread Benefits

The savings benefit more than just people who carry Blue Cross insurance. About two-thirds of the savings was spread across patients with Medicare, Medicaid or non-BCBSM private insurance and the uninsured.

We started these initiatives in 1997 when we joined five hospitals to study variation in angioplasty procedures and treatment. The initiative resulted in drastically fewer emergency bypass surgeries and other complications and saved $15.2 million in an early analysis (this program saw the largest savings — $102 million — from 2008 through 2010).

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BlueWorks Award Highlights Progress in Improving Health Care Quality, Lowering Costs for All Michigan Residents

Two surgical initiatives developed by Blue Cross Blue Shield of Michigan and Blue Care Network have been recognized as tops among 48 programs run by Blues plans nationwide, providing further validation of BCBSM’s efforts to improve health care quality, patient safety and outcomes.

Together, the two collaborative quality initiatives have removed an estimated $100 million in costs from the health care system in Michigan, including from non-Blues plans.

The 2011 BlueWorks Award was announced last week by the Blue Cross and Blue Shield Association and the Harvard Medical School Department of Health Care Policy. The award recognizes Blues-sponsored programs that improve health care safety, quality, accessibility and affordability while engaging providers, consumers and communities.

It’s the second consecutive year that BCBSM has received the prestigious BlueWorks Award. In 2010, BCBSM was recognized for its Patient-Centered Medical Home program, which emphasizes the roles of primary care and increased patient involvement to improve health outcomes and lower costs.

The BCBSA and Harvard Medical School recognized the Michigan Blues for two statewide initiatives aimed at improving quality and patient outcomes in surgical procedures:

  • The Michigan Surgical Quality Collaborative, which collects and analyzes procedural and outcome data to improve the quality of care for patients undergoing general and vascular surgery, which is commonly performed at hospitals across Michigan. Rates for surgical morbidity are lower under this program and dropped more quickly than at other hospitals in the National Surgical Quality Improvement Program, after which the program is modeled.
  • The Michigan Bariatric Surgery Collaborative Quality Initiative, which analyzes and shares patient data and outcomes from a clinical registry database. Among other goals, this CQI aims to reduce both emergency room visits and the use of pre-operative Inferior Vena Cava filter placements to improve care for patients who undergo bariatric surgery. This initiative has served as a guide for other regional collaborative efforts and can be easily replicated to improve patient care in other clinical areas.

Early data suggest that the Michigan Surgical Quality Collaborative led to $85.9 million in cost savings statewide in 2009 and 2010. That figure includes procedures covered by all commercial insurers — including the Blues — as well as self-payers, Medicare and Medicaid.

An analysis of the Michigan Bariatric Surgery CQI suggests that the program has saved Michigan $14.6 million between 2008 and 2010.

All told, Blue Cross Blue Shield of Michigan and Blue Care Network sponsor 10 collaborative quality initiatives with Michigan hospitals. Another two are planned for launch in early 2012: one on arthroplasty (hip and knee replacement surgery) and the other on intensity modulated radiation therapy, which is used to treat breast and lung cancer.

Photo by Army Medicine.

Blues CEO Dan Loepp Talks Health Care Costs, Quality and Accountability on WJR’s Paul W. Smith Show

Daniel J. Loepp

Blue Cross made its presence felt at the Crain’s Health Care Leadership Summit in Detroit on Thursday. Daniel J. Loepp, president and CEO, delivered the welcoming address and earlier stopped by the WJR-AM radio booth for a live interview with host Paul W. Smith to talk about health care reform, partnering to lower costs and improve the quality of care and other topics in the news. A snippet:

Smith: We don’t know for sure the impacts of reform but we do know that there’s an opportunity to make health care work better for everyone. We need to save costs, save money, but we also need to make sure that the quality of care is there.

Loepp: Absolutely, and I think the two words that come to mind for me, and you and I have talked often about this, is accountability and responsibility, I think both on the provider’s side, the insurer’s side and the subscriber’s side. People taking care of themselves, paying attention to their health, best practices by hospitals and physicians and insurance companies. And if we can do that and we continue to talk—I was up in Marquette on Monday, I spoke to the economic club—talking about collaboration and when we do collaborate with each other and we’ve done that with the hospitals and the docs, we’re seeing savings in Michigan because of that and I think that’s part of what we’re going to talk about today.

Listen here: Paul W Smith Broadcast with Dan Loepp

Action Plan Unveiled in Washington D.C. to Promote Partnerships in Health Care Quality, Cost Savings

The "Building Tomorrow's Healthcare System" plan from the Blue Cross and Blue Shield Association calls for inspiring healthier living, among other recommendations.

Blues CEO Daniel J. Loepp traveled to Washington D.C. last week to join Scott Serota of the Blue Cross and Blue Shield Association in announcing a comprehensive action plan to overhaul the nation’s health care system by improving quality and reining in costs.

Loepp was on hand to help Scott Serota, CEO of the BCBSA, unveil “Building Tomorrow’s Healthcare System: The Pathway to High-Quality, Affordable Care in America,” a four-pronged approach to building tomorrow’s health care system based on efforts to contain costs and improve quality where BCBSM is already making measurable progress.

The “Pathway” plan focuses on rewarding quality and safety while taking on rising health care costs. It advocates for a public-private partnership in four areas:

  • Rewarding safety
  • Doing what works and focusing on quality outcomes, instead of paying for expensive services that may be ineffective or redundant
  • Reinforcing front-line primary care
  • Inspiring Americans to live healthy and make better choices

Loepp, who is also chairman of the BCBSA board of directors, told the media about the Keystone Center for Patient Safety and Quality, BCBSM’s widely recognized partnership with the Michigan Health & Hospital Association. He also shared some of the early achievements of the Patient-Centered Medical Home program, the largest in the country.

“We are helping to create a culture of patient safety in Michigan,” Loepp said. “We know our efforts are saving money and creating more consistent application of best practices, but more importantly, these efforts are leading to better outcomes and ultimately saving lives.”

If adopted, the recommendations would save $319 billion over the next decade, according to a study by Ken Thorpe, chair of the Department of Health Policy and Management at the Rollins School of Public Health at Emory University.

For more information, read the BCBSA news release, or read the Pathway action plan.

BCBSA is the parent organization of the 39 independent, locally based Blue Cross Blue Shield plans, including the Michigan Blues.

Photo by Christiana Care.

The Role of Information Technology in Improving Health Care

Imagine your loved one has a certain chronic condition. When a doctor asks whether she’s had an MRI recently, your loved one says “no” because she doesn’t remember receiving one — even though she just had one two weeks prior at another doctor’s office across town. Let’s say there was also a prescription for follow-up care, but she never received that, either. Maybe she was also prescribed medication, but the prescription was never filled at the pharmacy.

Without a centralized record, this person might theoretically receive the same test over and over without ever following up with subsequent treatment or medicine the doctor feels is necessary. She may feel she’s doing everything in her power to do what the doctor instructs, but the record may tell another story.

What many healthy people often don’t realize is how much time and attention to detail it takes to manage your own health care when problems arise. It’s not uncommon for several different doctors to prescribe multiple medications, tests and follow-up care. Without a centralized medical record, many don’t even realize the treatment they’re receiving is a duplication of effort. That redundancy adds to the already high costs of obtaining health care.

Information technology has the potential to give doctors and providers of medical care a much more complete picture of the patient in front of them, and patients a much easier way to access their complete medical history.

That’s why Blue Cross Blue Shield of Michigan was proud to be a sponsor of the Wiring Michigan Conference, a health information technology symposium held last month in Ypsilanti.

Our Patient-Centered Medical Home program is one example of how we’re persuading providers to adopt health IT. Our PCMH program, the nation’s largest at 1,800 designated physicians, encourages doctors to implement information technology such as e-prescribing into their practices as one way to improve quality, open up access to care and help manage costs.

Here’s a rundown of what we’re doing to promote health IT:

  • E-prescribing — The Blues have collaborated with large customers and industry leaders to lead on electronic prescriptions. Physicians who use electronic prescriptions can view patient records, confirm medications and dosages listed on formularies and know what medications have already been prescribed by other doctors. E-prescribing helps eliminate problems with illegible penmanship, reduces pharmacy staff time and avoids paper waste. Michigan ranked No. 2 nationally for the number of e-prescriptions filled in 2009, according to Surescripts.
  • Electronic transactions — BCBSM since 2008 has been helping business partners and providers prepare for the 2012 deadline to implement EDI 5010, a new, federally mandated electronic transaction standard. The changes will enhance business functionality, clarify data ambiguities and support the new National Provider Identifier number required under the Health Insurance Privacy and Portability Act.
  • New ICD-10 medical code set — With the rise of electronic medical records, e-prescriptions and connectivity between providers and specialists, the Blues have responded nimbly to maintain market leadership. For starters, the company is on track for early implementation of ICD-10 medical code billing standards, which will provide greater ability to measure health care services and monitor population health, provide better data and cut down on paperwork when submitting claims. Our process for associating the new codes in our systems have been featured at national forums and adopted by other insurers. We’ve also made our solution available to other health care entities to keep implementation costs down.

When approached with the subject of technology in health care, you might think of expensive diagnostic tools and cutting-edge procedures. But what you may not realize is that information technology — the kind of information systems we use at home or at work to track multiple projects or household expenses — can be used on a wider scale to make health care more efficient, safer and maybe even less expensive for everyone.

Photo by Tricia Wang.

BCBSM editorial in Crain’s Detroit Business

The following is an editorial from Andrew Hetzel, vice president of corporate communications at Blue Cross Blue Shield of Michigan that first-appeared in Crain’s Detroit Business on Oct. 31, 2010:

Allow the Blues to work out the best contract

On Oct. 18, the U.S. government sued Blue Cross Blue Shield of Michigan for delivering the lowest possible health care prices to our customers through the reimbursement contracts we negotiate with Michigan hospitals.

Especially now, as the government puts intense political pressure on private insurers to control premiums, it makes no sense for it to undermine the ability of insurers to negotiate the most favorable pricing we can possibly achieve.

Health care costs are straining the resources of every business and family in Michigan. BCBSM covers about 4 million Michiganders and is obligated by a 30-year-old state law to provide statewide access to health care at a reasonable cost.

None of our competitors share the Blues’ statutory mission. To fulfill it, BCBSM prioritizes having contracts in place with all Michigan acute care hospitals, while ensuring that these contracts deliver exceptional value to our customers in the form of the deepest possible volume discount savings.

BCBSM’s negotiated volume discounts across all hospitals, physicians and pharmacies in our network saved our customers nearly $13 billion in 2009 alone. Our payout that year approached $20 billion. The impact of that level of annual savings on the affordability of health care in Michigan cannot be overstated.

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How BCBSM is working with hospitals, managing costs and improving quality of health care

Discounts that Blue Cross Blue Shield of Michigan negotiates with health care providers and collaborations with physicians and hospitals have realized more than $13 billion in savings, according to the 2010 Annual Report of Program Value (PDF), released Friday.

We’ve gone on record saying that one of our biggest concerns with health care reform is a lack of measures to contain costs. That concern is also echoed by many business owners, many of whom will have to begin offering insurance to employees in the coming years.

That’s why we feel it’s important to spotlight the important work taking place to lower costs and improve health care quality right here in Michigan.

The report outlines savings on hospital, professional, pharmacy and dental rates for members that total $12.9 billion. In addition, the Blues work with more than 8,100 physicians and more than 40 hospitals across the state on projects that address factors that drive up costs and diminish the quality of health care.

A few examples:

  • Doctors participating in our Physician Group Incentive Program saved nearly $9.5 million in 2009 through more judicious use of high- and low-tech radiology services.
  • An initiative to increase use of generic drugs helped save $700 million over seven years.
  • A collaborative initiative targeting angioplasty in hospitals saves an estimated $15.2 million annually and has reduced both hospital deaths and post-procedure blood transfusions by nearly a third.
  • A cardiac surgery initiative has decreased incidence rates of post-surgical prolonged ventilation, saving $25,000 per case.
  • And our Patient-Centered Medical Home program, at 1,800 participating physicians, is the largest in the nation and is beginning to see positive effects in just its second full year.
  • Preliminary data have shown that PCMH practices have lower rates for adult and pediatric inpatient admissions, radiology utilization and ER visits than non-PCMH practices. Comprehensive data on first-year results of the program are expected later this year.

Blue Cross is proud of these accomplishments, of course because they are saving valuable health care dollars, but more importantly, because they are creating a safer, higher quality atmosphere for health care in Michigan for everyone.

Technology, medical equipment driving health care costs

The rising cost of health care has been a topic of intense national debate over the past two years, as legislators, health care experts and insurance companies ponder the reasons for the high cost of care and explore possible solutions.

Most studies addressing the reasons for rising health care costs put technology at the top of the list.

As Blue Cross Blue Shield of Michigan President and CEO Daniel J. Loepp pointed out at an employee meeting, “Everyone today wants the newest, the best equipment. And every new machine costs significantly more than the last. As a culture, we demand the newest and best.”

What he didn’t say, but implied, was that the newest, the best and the most expensive don’t necessarily correlate with better health care.

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How health care reform impacts ‘Cadillac’ plans, small businesses and group plans

One of the central talking points for health care reform during the long and heated push for its enactment was that if you currently receive health insurance from your employer, and you like your plan, you get to keep it.
But health care reform does make a few important changes to benefit-rich “Cadillac” group plans, and it will incentivize small business owners to begin offering health insurance for workers by providing tax credits.
As part of our weeklong series exploring what the changes mean for Michigan Blues members, we delve into some of your most commonly asked questions. You can also check out yesterday’s post about individual-market policy impacts, or our earlier post outlining the changes more broadly.
And as always, we welcome your comments and questions.

Q: When will near-term changes to my benefits based on national health care reform take effect?
A: Depending on your employer, changes will take effect either in your new plan year if it begins after Sept. 23, 2010 or at the end of the most recent collective bargaining period. If your employer provided coverage through Blue Cross Blue Shield of Michigan as of March 23, 2010, changes to your policy include:
  • No lifetime limits on your policy
o   Your policy will no longer have a lifetime dollar limit for benefits.
  • Restrictions on allowable annual limits on your policy
o   The Department of Health and Human Services will post regulations about what annual limits health insurers will be allowed to place on benefits
  • Coverage of dependents until their 26th birthday
o   The Department of Health and Human Services will post regulations about the definition of “dependent.” Currently, the only requirements are that the person must be under the age of 26 and cannot have an offer of coverage from their employer (the dependent can be married).
Q: What is the “Cadillac Plan” tax and will my policy be affected?
A: The high-cost plan tax, or “Cadillac” tax, is a 40 percent excise tax on the value of employer-provided health benefits that exceed specified thresholds.
When the tax begins in 2018, the standard thresholds are $10,200 for individual plans and $27,500 for family plans. The thresholds increase to $11,850/$30,950 for retirees and employees in specified high-risk professions. The thresholds are also adjusted for age, gender and health status, and will increase in 2018 if health costs rise more than expected.
The tax only applies to tax-excludable employer-provided benefits, so individual market products are not affected. Since this tax goes into effect in 2018, it is unclear how many group benefit packages will hit the threshold. Beyond 2018, the thresholds are indexed for a cost-of-living adjustment (with an additional percentage point added only in 2019). Since the thresholds will grow more slowly than health expenses, more plans will face the thresholds over time.
Q: I work for a small business – will they be eligible for tax credits to help buy coverage for their workers?
A: Starting Jan. 1, 2010, if an employer has fewer than 25 workers with an average annual wage of less than $50,000, they are eligible for a tax credit to help purchase health insurance. The value of this credit will be based on the number of employees and the average wage and can reduce costs of purchasing insurance by up to 35 percent.
The full value of the tax credit is only for small businesses with 10 or fewer workers with an average annual wage of less than $25,000. These tax credits are available until 2014. There are also tax credits available after 2014 for two years through the insurance exchange.
Nonprofit organizations are also eligible for these tax credits, but at a 25 percent maximum credit.
Tomorrow: High-risk pools and pre-existing conditions.
Tags: Cadillac plans, small business tax credits, health care reform, lifetime limits