Michigan Blues Launch Hospital Cost Reduction Initiative
Blue Cross Blue Shield of Michigan has teamed with the University of Michigan Health System to launch an initiative intended to boost cost transparency for the state's hospitals.
The goal of the initiative, known as the Michigan Value Collaborative, is to reduce spending variations among the state's hospitals while improving quality. The overall goal is to reduce costs among Michigan hospitals by a relatively modest $10 million.
"This new initiative uses healthcare claims data to enable hospitals to see how they compare on the resources they use to deliver care to patients," said David Share, M.D., senior vice president of value partnerships for the Michigan Blues. "This initiative is unique in that it allows participating hospitals to see how they compare with other hospitals, and use that data to better connect their care practices and costs with outcomes. Hospitals will be able to adjust their practice patterns to benefit patients and the overall efficiency of our healthcare system."
Spending on care by hospitals is all over the map, according to healthcare finance authorities such as the Dartmouth Atlas. Most initiatives to curb spending variations have been launched by individual hospitals and healthcare systems, with few providers across geographic regions acting in concert.
Michigan spent $6,618 per capita on healthcare in 2009, according to data compiled by the Kaiser Family Foundation. That's significantly below the nationwide average of $6,815. However, states such as Texas, Georgia, Arizona, California, Nevada, Idaho, Utah and Alabama spent significantly less. Utah spent just over $5,000 per capita per year, while Nevada, Texas, Idaho and other states spend well under $6,000.
“Providing hospitals with reliable feedback on their comparative costs is obviously important in the era of health reform," said John Birkmeyer, M.D., with the University of Michigan Center for Healthcare Outcomes and Policy, which is leading the program. “We also want to give them insights about how they can help their patients achieve the best possible outcomes at the lowest reasonable cost.”
The initiative is the 15th launched by the Michigan Blues to bring providers together to collaborate on improving quality and patient outcomes.
