Blue Cross' $65 Billion Move Away From Fee-For-Service Medicine

In the latest blow to fee-for-service medicine, the nation’s Blue Cross and Blue Shield plans say they are spending more than $65 billion annually — about 20 percent of the medical claim dollars they pay — on “value-based” care that rewards better outcomes and keeps patients healthy.

The moves by the nation’s 37 Blue Cross and Blue Shield companies, a summation of which was announced today, are the latest push away from the traditional fee-for-service approach to medicine that can lead to overtreatment and unnecessary medical tests and procedures.

The Blue Cross Blue Shield Association, which is the trade group and lobby for Blue Cross plans, said its member plans have a portfolio of more than 350 “locally-developed, value-based programs in 49 states, Washington, D.C. and Puerto Rico.” These more accountable contracts are with more than 215,000 physicians, the association said.

The Blue Cross Blue Shield Association says the contracts with providers are taking on many forms. They include “pay for performance programs,” “episode-based payment programs,” “patient-centered medical homes” as well as so-called accountable care organizations (ACOs), a rapidly emerging health care delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs.