Why Hospitals Should Fear Blue Cross Primary Care Centers

Forbes.com reports:

“As if hospitals and health systems didn’t have enough emerging threats with big well capitalized publicly-traded insurance companies and drugstore chains developing primary care clinics and urgent care centers in their backyards.

Now come the nation’s largest Blue Cross and Blue Shield plans that dominate big diverse markets like Florida, Illinois, Texas and New Jersey. These Blues plans are backed by their own financing, venture capital funds and primary care partners looking to expand doctor offices, urgent care and health centers in communities across the country.

The latest such venture is bankrolled by primary care provider Sanitas USAand the venture capital arm of Health Care Service Corp., which owns Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas where the Texas Blues plan is opening up 10 centers.

Sanitas already has an established primary care partnership to open Sanitas centers in several Florida markets with Blue Cross and Blue Shield of Florida, the state’s largest health insurer, and Horizon Blue Cross Blue Shield of New Jersey where centers are expanding.

Florida Blue executives say the now four-year-old partnership with Sanitashas shown to reduce the need for more expensive hospital care by improving healthcare quality and health outcomes of thousands of health plan enrollees. Its success is a key reason more Blue Cross plans are adopting the model, executives close to the plans say.

“The unique care model, with its comprehensive set of services and culturally tailored patient experience, has positively affected member service and lowered medical care costs,” Florida Blue spokesman Paul Kluding said.

Patients managed in the Sanitas clinics had 32% lower inpatient admissions and 20% lower emergency room visits “compared to similar groups” of Florida Blue members, the insurer said, citing 2018 data. Florida Blue, which opened its 23rd Sanitas Center in Orlando earlier this month, is now serving 200,000 health plan enrollees primarily in south Florida and the Orlando market. The first such center opened in 2015 less than a year after Florida Blue’s parent, Guidewell, first partnered with Organizacion Sanitas Internacional to create a new company.

The closer ties between Blues plans and medical care providers comes as CVS Health, the operator of thousands of retail pharmacies and retail health clinics, is preparing to roll out new primary care models following its acquisition of Aetna. And UnitedHealth Group, the nation’s largest health insurer, has been expanding primary care operations through its Optum health services unit, that includes doctor practices and MedExpress urgent care centers across the country in dozens of markets across the U.S.

Health insurers are moving away from fee-for-service medicine to value-based models that pay medical care providers based on quality of care and health outcomes of patients. If providers and insurers are even more integrated, supporters of such arrangements believe quality and costs can be more closely monitored.

Health Care Service’s Texas Blues plan subsidiary is partnering with SanitasUSA to initially open 10 primary care centers in the Dallas and Houston markets. The centers will be owned via a joint venture of Sanitas and HCSC Ventures, which is a part of Health Care Services Corp.

The medical centers include urgent care, lab and diagnostic imaging services, wellness and disease management and some of them are open 365 days a year to give patients less reason to go to a hospital emergency room.

Those involved won’t disclose how much money they plan to spend on the Sanitas centers in Texas, but said they will be looking to expand in the four other states where Health Care Service operates Blues plans. Combined, the plans cover nearly 17 million health plan members and Blue Cross want them to have more options for quality low-cost medical care so the market potential is large.

“We are excited to begin our journey with Blue Cross and Blue Shield of Texas and look forward to working closely together to bring more value to their members and communities,” Joseba Grajales, president of Keralty Group, the parent company of Sanitas USA said in announcing the partnership with Health Care Service and the Texas Blues earlier this month. “Our approach to care is centered on our patients and their families, giving them more time with the doctor and the convenience of a one-stop medical center for their everyday health care needs. Our expansion to Texas will continue to build on our success in Florida, New Jersey and Connecticut, serving more than 200,000 patients in diverse communities.”

Elsewhere, Blue Cross and Blue Shield plans are investing in other value-based initiatives with primary care providers to ensure care is delivered in the right place, in the right amount and at the right time.

Four months ago, Blue Cross and Blue Shield of North Carolina and Aledade, which helps doctors run their practices, launched a venture designed to support independently owned and operated primary care clinics to form accountable care organizations (ACOs), a proliferating value-based care model that contracts with health insurers to improve quality, lower costs and allows the providers involved to keep any money saved from year to year based on the arrangement with the health plan.

“Primary care physicians influence a vast majority of health care spending, and their role in this transformation is critical,” Blue Cross NC CEO Dr. Patrick Conway said in announcing the partnership. “We want to provide primary care physicians across North Carolina the tools they need to be best-in-class and succeed in a remodeled health care system built on the foundation of value-based, patient-centered care.”