Aaron Friedkin, senior vice president of care delivery for BCBSM, said Triarq will reduce overall costs to patients and the insurer by bundling services under one bill.
"It operates similar to Medicare with the bundled payment program," Friedkin said. "Triarq coordinates the efforts around, say, knee and hip replacements, but also ensuring the right coordination happens. There is presurgical work, then surgery and rehabilitation that typically takes place disconnected from one another. Under this model, they have created a clinically integrated model where physical therapists and surgeons are all working together and collaborating through Triarq. The care plan is connected through a bundled payment arrangement and performs at a lower cost."
The move is likely a response to competitor and the country's largest insurer UnitedHealth Group Inc. The company's Optum division, the source of more than half of its revenue, has spent years acquiring physician and medical practices.
For instance, United acquired DaVita Medical Group, which operates physician practices and thousands of dialysis outpatient centers across the U.S. and Michigan, for a sidesplitting $4.3 billion
United employs or manages nearly 5 percent of the practicing physician workforce in the country, or about 50,000 doctors, Bloomberg reported.
United offers its own medical network as part of a new insurance plan called Harmony, which has premiums about 20 percent less than its own HMO network. United started selling the Harmony plan to employers in 2019 and then to individuals in California last year.
While HMOs largely fell out of favor in the 1990s over blowback from patients and payors upset with restricted care choices, rising healthcare costs are fueling their regrowth.
Blue Cross and Aetna are expanding their own HMO networks as an attempt to better control rising healthcare costs — which are expected to rise 4.4 percent in 2021, according to human resource consulting firm Mercer.
Susan Moore, president of Ortonville-based managed care consulting firm Managed Healthcare Resources Inc., said Michigan employers are leery of insurers directly owning physician practices, like United, and that may be the reason BCBSM is choosing to expand via an MSO.
"Nationally Blue Cross wants a low-cost, high performing network to sell to employer groups," Moore said. "This is the first shot across the bow at that. Michigan is a different market, maybe because of the large auto sector employers, but they are just more skeptical about insurance companies controlling practitioners more. Executives are having to be more creative about how they sell insurance and this allows Blue Cross to remain at an arm's length while having a major impact on costs."
Employers are also looking to control costs and effectively creating their own healthcare networks.
CVS Health's Aetna unit announced its Whole Health heath plan last year that has a smaller, more limited provider network and steers employees to its HealthHub offerings, which include visits with physician assistants and nurse practitioners for chronic care issues.
Walmart Inc. also started pushing at least some employees to a selected group of providers this year, Bloomberg reported.
Locally, Amazon Inc., Rocket Cos. and United Wholesale Mortgage also operate or contract with direct primary care practices to control healthcare costs.