Michigan Blues, Munson Enter Into Value-Based Pact

Munson Healthcare, the seven-hospital not-for-profit system in Northern Michigan, has reached a three-year contract with Michigan Blue Cross Blue Shield that includes a variety of value-based incentives at three of its facilities.

Included in the three-year pact is a shared-savings program between Munson and the Michigan Blues intended to improve care and outcomes for patients. The focus will be on preventing readmissions within 30 days of discharge, as well as the reduction of care that is either overused or inefficient.

“Healthcare reform is shifting our model of care from one based on volume, to one that focuses on value. Ultimately, this agreement will benefit our patients by improving the coordination of care and reducing cost. That's the right thing to do,” said Munson Healthcare Chief Executive Officer Ed Ness.

The shared savings program will be launched at three Munson facilities: Munson Medical Center in Traverse City, Kalkaska Memorial Health Center in Kalkaska, and Paul Oliver Memorial Hospital in Frankfort.

The Michigan Blues is also providing funds to Munson to improve its infrastructure at those hospitals to better coordinate care between them and the region's physicians. No dollar amount earmarked for the improvements was immediately available.

Munson Healthcare has been working for the past year on an electronic patient registry system that enables easier sharing of medical records between its facilities and doctors in order to improve the coordination of care.

"When a patient visits the hospital or doctor, imagine how much more manageable and valuable that situation would have been if communications between the doctor, the hospital, the pharmacist, and the outpatient setting were seamless and connected," said Susan Barkell, the Michigan Blues' senior vice president for Health Care Value. "Our new contracts with these Munson Healthcare hospitals will work toward achieving this connectivity through infrastructure incentives."