Insurer and Hospital System: Why Can’t We Be Friends?

In North Carolina’s Research Triangle, two forces so often at odds — a major health care system and the region’s dominant insurer — announced that they would work together in the interest of better, cheaper medicine.

UNC Health Care System and Blue Cross Blue Shield of North Carolina plan to cut the ribbon late this year on a new project, part clinic and part laboratory for reinventing health care, for around 5,000 patients in either Durham or Chapel Hill.

“It is going to reward health outcomes more than we have ever seen before,” said BlueCross CEO Brad Wilson. There’s a lot of catch words involved — collaboration, coordination and quality all make cameos in press releases on the deal — but here’s the gist: It will be a high-tech, cost-conscious health center that offers patients, especially people with chronic illnesses, a clearinghouse for numerous health care needs.

The two organizations are splitting the considerable costs of setting up and staffing the planned 10,000 square foot facility. If its work succeeds at saving money, they’ll split that, too. The project also shows a changed tone between the insurer and the health system. Dr. Bill Roper, the CEO of UNC Health Care, described his health system’s past relationship with BlueCross as “the product of very formal negotiation.”

The idea materialized in the waning days of the congressional health debate last March, just after Wilson took the reins at the insurer. Wilson and Roper — who have known each other for 15 years — began to talk, and this week’s announcement is the fruit of those chats.

“We recognized that the system we have is unsustainable and we would need to make changes regardless” of whether the health law passed, Wilson told us.

The concept will remind experienced health watchers of the health management organizations that dominated the 90s — and were stymied under pressure from consumers who felt their choices were too restricted. During that era, Roper worked for Prudential HealthCare, a now-defunct HMO operator.

That’s not the plan now, Wilson promises. “This is not about building a construct where BlueCross BlueShield will serve as a mother-may-I,” he says. “The perception of the 90s was that the insurer had too much of a role in making decisions that should be made between doctor and patient. We recognize that.”

But, to today’s policymakers, some variation of this partnership looks like the future, too. Beginning next January, Medicare, the government agency that pays for health care for seniors and disabled people, will begin paying bonuses to certain groups of health care providers that spend less money than anticipated and get better results. Wonks are calling these groups “accountable care organizations.”

Marketers have latched on the term, filling up this reporter’s email inbox with pitches about “ACOs” even though the term doesn’t yet have a definition. (A federal health official told us this morning regulations are expected by the end of the month).

The idea will require institutions that have sometimes been at each other’s throats to find new ways to work together. That could be one take away from the North Carolina experiment.

“There’s a lot vagueness” surrounding the term, Roper said. “We hope we are a leader in this.”

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