LIVONIA, Mich.—Blue Cross and Blue Shield of Michigan and Trinity Health-Michigan have signed a three-year reimbursement contract that gives Trinity's 12 hospitals in Michigan financial incentives for improving care with affiliated physicians. Blue Cross has similar contracts with Warren-based St. John Providence Health System and Royal Oak-based Beaumont Health System in Southeast Michigan, but the Trinity contract is the first one that applies statewide. “The current fee-for-service approach to paying hospitals is failing to improve care and lower its cost,” Michigan Blues CEO Daniel Loepp said in a statement. The contract will begin first at the four Mercy Health Partners hospitals and St. Mary's Health Care in western Michigan. In July, the other seven Trinity Health hospitals that are affiliated with Ann Arbor-based St. Joseph Mercy Health System will move under the new reimbursement arrangement. Under the contract, hospitals will share savings with Blue Cross through closer care coordination. Savings will come by eliminating redundant tests and procedures and unnecessary hospitalizations and re-hospitalizations, and by preventing medical errors. Blue Cross also is funding improvements to Trinity's information technology system to better track patient care between hospitals and physicians. “Insurers pay for most every treatment, no matter how effective. But we don't pay physicians and hospitals for some things that really improve patient health, like proactively contacting people about their follow-up care or medication compliance,” said Susan Barkell, Blue Cross' senior vice president for Health Care Value.
—Crain's Detroit Business
