Hospitals, Payers,

Allina, BCBS of Minnesota strike big value-based contract

The two companies had been negotiating a six-year value-based contract prior to the start of the pandemic. Allina and BCBS of Minnesota expect the agreement will affect roughly 130,000 patients.

Allina Health and Blue Cross Blue Shield of Minnesota struck a six-year value-based contract. Between the large, Minneapolis-based health system and the insurer, the agreement is expected to affect roughly 130,000 people.

The two entities had been planning a value-based care agreement several months before the start of the Covid-19 pandemic. But the health crisis has made it that much more timely, with a business model that would lead to more reliable payments as several health systems have seen a significant dip in patient volumes. According to a recent report by Kaufman Hall, adjusted hospital discharges were down 13% compared to last year.

“COVID-19 accelerated the imperative that health care in the U.S. needs to be more coordinated, accessible and affordable for all who need care,” Allina Health CEO Dr. Penny Wheeler said in a news release. “The pandemic also unearthed significant gaps throughout the health care community that contribute to unacceptable health disparities. Through this agreement with Blue Cross, we will be better equipped to address health disparities and positively impact the future of health care in Minnesota.”

The goal is to reduce the cost trend for Blue Cross members who seek care at Allina Health by 10% over five years.  BCBS of Minnesota claims that it is paying 5 to 10 times more than in typical risk-based agreements.

“Allina Health is putting a significant amount of their profit margin at risk, while Blue Cross is providing a significant amount of population health payment upfront,” an Allina Health spokeswoman wrote in an email. “That investment will enable Allina Health to build the infrastructure needed to implement new programs, as well as support existing care models that don’t currently have a revenue source that would not be otherwise funded in a fee-for-service or low-risk value-based reimbursement model.”

The plan will be structured to reward preventive care, such as diabetes A1c control and statin therapy for patients with cardiovascular disease.

sponsored content

A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

Allina Health also said it would use the agreement to expand its care coordination and offer more affordable sites for care. Expanded telehealth services, which were broadened after the start of the Covid-19 pandemic, are also part of the agreement.

Photo credit: mediaphotos, Getty Images