Blue Cross joins forces with physician group

Aug. 07--Blue Cross and Blue Shield of Illinois is teaming up with one of the Chicago area's largest independent physician practices as the traditional adversarial relationship between doctors and insurers continues to change.

Blue Cross and the DuPage Medical Group planned to announce on Thursday a strategic partnership whose aim is to provide coordinated, high-quality and efficient care. The doctor group will continue to accept other insurance plans.

The venture comes at a time of sweeping change in health care triggered by the Affordable Care Act and intense pressure to reduce the cost of care. Many hospitals are responding by merging and buying doctors' practices, while some are for the first time offering their own health plans.

The consolidation of health care providers worriers insurers, forcing them to come up with new approaches to work with doctors and hospitals. With years of experience monitoring and paying claims, insurers have developed the management expertise and databases to affect how and what kind of care is delivered and to whom.

They are exercising their strength in the market by forming strategic partnerships with large health systems and physician groups. The arrangements represent a shift in the way doctors and hospitals are paid -- placing less emphasis on the volume and profitability of services and more on improving quality and lowering costs.

The big question is can providers and insurance companies work together to transform the health care system or will coordinated care and vertical integration squelch competition and lead to higher prices?

Minoo Javanmardian, a principal at Strategy&, part of the PwC network, said changing the adversarial relationship between doctors and insurers is easier said than done but it needs to happen to reduce the waste and fragmentation in the industry.

"The current system was not designed around the consumer," Javanmardian said. "Now they are realizing that you need to focus on consumers and need to focus on them holistically. The right collaboration means better outcomes for patients."

In this case, Blue Cross will share data and information with DuPage Medical Group to help its more than 425 doctors make decisions about the insurer's members they see. Before, the doctors could only see data on the services they provided to the patients and not other care provided outside the group, said Michael Kasper, chief executive of DuPage Medical Group.

"We have a huge limitation on having a complete picture of what's going on with our patients," he said. "It's one of the biggest challenges in health care."

By being more transparent, Blue Cross wants to be in a position to control costs upfront rather than paying for expensive treatments when a patient lands in a hospital. The group's doctors, in turn, will get some mutually agreed on financial incentives based on specific quality measures, so-called value-based care.

DuPage Medical Group has managed to remain independent despite market pressure to join forces with a hospital. The group has expanded into services traditionally provided by hospitals, like diagnostic imaging and emergency care. It plans to open two more urgent care centers in the suburbs, Kasper said.

Blue Cross officials say they have an incentive to deepen their ties with physician groups so they can remain independent. Historically the company has seen lower costs in independent doctor groups compared to those that merge with hospitals, said Donna Levigne, vice president of risk-based networks.

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