BlueCross BlueShield of South Carolina

SC BlueCross, Providence Hospitals First in State To Use ‘Bundled Payments’

October 25, 2012

Columbia, S.C. – BlueCross BlueShield of South Carolina and Providence Hospitals in Columbia have agreed to a restructured pay system using bundled payments, an arrangement aimed at enhancing patient care while reducing medical costs.

It’s the first time a major South Carolina insurer has implemented bundled payments, in which providers are reimbursed for a single “episode of care” — all services related to a particular surgery, for example. It encourages medical providers to deliver services efficiently and also allows them to share in the cost savings.

Using a bundled payment method is a major step toward transforming health care in South Carolina, and another illustration of BlueCross’ collaboration with physicians and hospitals to improve quality and control rising costs.

BlueCross and Providence contracted recently to begin the bundled arrangement for coronary artery bypass surgery for members of BlueCross as well as BlueChoice^® HealthPlan of South Carolina. In this case, the patient’s episode of care includes all services related to coronary artery bypass surgery performed over 90 days.

BlueCross will provide Providence with a comparison of its complication rates against regional and national levels. Then, the hospital and the patient’s medical team will collaborate to reduce those complication rates and improve patient outcomes. As an incentive to manage costs, the providers share the savings when the total cost comes in under the budgeted projection.

“As hospitals are facing mandates to reduce readmissions, reduce patient safety failures and improve the value of services provided, and as physicians are facing reduced fees from Medicare, this payment method encourages caregivers to work in teams, share information and take collective responsibility for a patient’s health,” said Laura Long, M.D., MPH, BlueCross’ vice president of clinical innovation and population health. “We’re proud to be the first in South Carolina to align economic incentives with the medical profession’s desire to improve patient health.”

“This is really about our processes, so we anticipate that it will be invisible to the patient. For us, being able to have the extra data that BlueCross will provide is significant in terms of enabling us to practice evidence-based medicine that we know will lead to higher quality care and potentially improved health outcomes,” said George Zara, president and CEO of Providence Hospitals.

BlueCross hopes to expand bundled payments to services provided at two other hospitals in other parts of the state before the end of this year.

About Providence Hospitals

Providence Hospitals (www.providencehospitals.com), a leading provider of cardiovascular and orthopedic services in the Midlands of South Carolina, comprises two hospitals, 13 physician practices, a network of rehabilitation centers, three sleep centers, a school of cardiac diagnostics and is an accredited chest pain center. Founded in 1938 by the Sisters of Charity of Saint Augustine, Providence has an open heart surgery program that has ranked consistently in the top 15 percent of open heart programs since 2006.  Both its orthopedic and cardiac services are recognized by BlueCross as Blue Distinction Centers.

About BlueCross BlueShield of South Carolina

Headquartered in Columbia, S.C., and operating in South Carolina for more than 65 years, BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association. The only South Carolina-owned and operated health insurance carrier, BlueCross comprises more than 40 companies involved in health insurance services, U.S. DoD health program and Medicare contracts, other insurance and employee benefits services, and a philanthropic foundation that funds programs to improve health care and access to health care for South Carolinians. BlueChoice HealthPlan of South Carolina also is an independent licensee of the Blue Cross and Blue Shield Association.