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The Dose

Welcome to The Dose, which tackles the business and economics inside the turbulent world of health care and life sciences in Indiana. Your host is John Russell. To contact me call 317-472-5383.
Health Care / Insurers / Insurance / Health Care Businesses / St. Francis / Anthem / Hospitals / Health Care & Insurance

A new partnership rings up big savings for Anthem, Franciscan

February 29, 2016

It was a new kind of contract and a lot could have gone wrong.

About two years ago, Anthem Blue Cross and Blue Shield of Indiana signed a three-year contract with Franciscan Alliance hospital system that allowed Franciscan to make money only if it saved money for Anthem.

The contract created what is known as an accountable care organization—a fairly new kind of set up in health care. Under the deal, Franciscan was financially accountable for what it would spend on care for about 63,000 patients who had Anthem benefits provided by its employers or purchased individually.

Under accountable care contracts (ACOs for short), health care providers take responsibility for cost and quality of the care provided to a specific group of patients.

In Franciscan’s case, that meant it would be responsible for the bills those 63,000 Anthem patients rack up.

Now, the first year of the contract (July 1, 2014 to June 30, 2015) is over and the bills are tallied. How did it go?

According to both sides, it was a runaway win.

The two companies announced Monday that the collaboration produced $22 million in savings while showing improvement in patient care.

According to the announcement, highlights include:

  • An increase of between 2 percent and 4 percent for medication adherence for patients with diabetes, high cholesterol and hypertension.
  • A 7 percent improvement in routine well child visits for children 15 months and younger, and a 6 percent improvement for such visits for children between 3 and 6.
  • A decrease in hospital inpatient admissions for conditions such as asthma, chronic obstructive pulmonary disease, diabetes, urinary tract infection and heart failure.
  • A decrease in avoidable emergency room visits for conditions such as earaches, sinus infections and urinary tract infections.
  • Improvements in treatment for acute and continuing episodes of depression.

Because the point is to stay well, patients and employers stand to save money when the program works and patients avoid complications, unnecessary procedures and hospital readmissions.

Anthem provided health data on the members covered by the ACO so their doctors could identify patients at high risk for hospitalization or complications and “intervene in a timely manner,” the companies said.

Under the ACO, Anthem paid a care coordination fee for each insured member. That funded a “personalized care team” that included a Franciscan Alliance physician, a care coordinator and other health care professionals as needed.

“We are extremely pleased by these first-year results which show that Anthem members are getting the care they need in a more efficient and coordinated way and staying healthier as a result,” said Dr. David Lee, vice president of provider solutions at Anthem Blue Cross and Blue Shield.

Dr. Albert Tomchaney, chief medical officer for Franciscan Alliance, said the partnership “allows us to learn from each other on how to best collaborate and coordinate activities….while optimizing the care of individual patients.”

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