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Lower Costs, Better Outcomes in NJ Shared Accountability Arrangement

Collaborative Alignment Elevates Quality and Lowers Overall Cost by 5%

Horizon Blue Cross Blue Shield of New Jersey and Atlantic Health System are seeing early success in their payer-provider shared accountability program where the two organizations have agreed to tie payments for healthcare services directly to outcomes in achieving quality and cost goals. In this innovative model, Atlantic Health shares with Horizon BCBSNJ financial accountability for the health, quality of outcomes, and total cost of care for a population of patients. This represents a significant step away from the traditional “fee for service” model under which providers get paid based on the volume of services they deliver.

To achieve this, the partners collaborated in new ways to enable Atlantic Health System to deliver improved and coordinated care by sharing data, clinical expertise, patient support, and an overall better consumer experience at an unprecedented level.  This innovative and successful arrangement has resulted in a reduction of more than 9% in unnecessary hospitalizations and, correspondingly, better overall health outcomes for those involved.  Furthermore, these efforts to improve quality and the consumer experience have resulted in a 5% reduction in the total cost of care for patients/members in the first program year.

“Health care is a team effort, including how we pay for care. This unique partnership has created a framework to deliver high-quality, affordable and accessible care that is increasingly proactive and preventative,” said Brian Gragnolati, president and chief executive officer of Atlantic Health System. “To support our journey toward value-based care, we have invested in robust data systems that empower our physicians and caregivers to deliver the most precise, personalized care. I am proud to lead a health system that has entered into a shared-accountability arrangement and hope that our commitment will serve as a catalyst to others, so that together, we can address the major issue of health care costs in our state.”

“The OMNIA Health Alliance launched five years ago with the goals of working together to transform health care in New Jersey and improving health care quality, affordability and experience. This shared-accountability arrangement is the latest milestone in our progress to achieve this level of alignment,” said Gary D. St. Hilaire President and Chief Executive Officer of Horizon BCBSNJ.  “This arrangement puts the focus on achieving the best result for the patient by giving doctors more accountability for the care they deliver along with greater incentives for them to help lower the total cost of care.”

In the traditional fee-for-service model, the health insurer bears almost all of the financial impact for care delivery and reimburses doctors, hospitals, specialists, diagnostic facilities, and others involved in care with little regard for the benefit provided. Under fee-for-service, health professionals are paid for the volume of care they deliver – more services, tests, and procedures are the only way a health care provider can increase its revenue.  By contrast, the shared-accountability arrangement incentivizes Horizon BCBSNJ and Atlantic Health to work more closely together to create models of care delivery that reward high quality, coordinated care. The better the outcome for the patient, the better each organization does in achieving its financial goals. While models that reward health systems for improvement are common, what makes this relationship unique is that Atlantic Health has also agreed to share the cost of care in the event that total costs exceed the agreed-upon targets.

The Atlantic Health / Horizon BCBSNJ risk-sharing arrangement applies to approximately 30,000 Horizon BCBSNJ members who are patients of Atlantic Health’s Clinically Integrated Network (CIN), which has been part of Horizon BCBSNJ’s value-based program since 2016. Atlantic Health’s CIN is an effort among physicians, the health system, and other medical facilities to develop active and ongoing clinical initiatives focused on delivering quality, efficiency, and value to its patients.

Atlantic Health and Horizon BCBSNJ established deep operational, clinical, and strategic initiatives to achieve positive outcomes in its first year. Working together, the organizations shared and analyzed data to identify which patients could achieve better health outcomes with additional outreach and support. Depending on a patient’s specific needs, Atlantic Health and its providers leveraged their existing relationship with the patient to proactively deploy appropriate, targeted, and timely support and interventions. The health system hired additional nurses, social workers, behavioral health clinicians, and community health workers that integrated with medical practices to support clinical needs, but also ensure that social and behavioral health needs are met as well. The Atlantic Health teams remained closely integrated with the Horizon BCBSNJ clinical teams to combine knowledge, resources and data to ensure efficient, coordinated care for all patients.

Under the risk-sharing model, Horizon BCBSNJ and Atlantic Health System use prior cost trends to jointly set a total cost of care target for certain Horizon BCBSNJ members who are patients of Atlantic Health’s CIN.  Atlantic Health’s reimbursement for caring for those Horizon BCBSNJ members is adjusted annually based not only on how Atlantic Health performs as compared to cost targets, but also for the quality of care and patient outcomes it achieves.

To support the relationship, both partners have worked jointly to improve care by sharing data and clinical expertise to enhance the collective focus on improving care for the individual patient and populations of patients with similar conditions and diagnoses.

Examples of this close and collaborative relationship at work include:

  • Bi-weekly huddles between Horizon BCBSNJ and Atlantic Health clinical teams to manage care and address complex medical conditions of Horizon BCBSNJ members;
  • Aiding Atlantic Health System to identify a high performing post-acute network to facilitate the efficient transfer of members from acute care to the most conducive post-acute environment for patients’ recovery;
  • Tighter clinical collaboration that enables both organizations to bring their combined resources to bear more effectively to address the complex physical, behavioral, and social needs of the patients and members served;
  • Identifying newly diagnosed medical, surgical and catastrophic cases to aid in better managing a patient’s disease states and helping patients self-manage their conditions; and
  • Health System’s care strategies and decisions and support a deeper and more proactive understanding of patient populations.

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