Value-based Payment Programs Save Money, but is it Passed on to Insurance Customers?

Mike Stankiewicz writes in Fierce Healthcare that Highmark’s value-based payment program saved the insurer more than $260 million within its first year, continuing an industry trend.

Stankiewicz says the nonprofit insurer announced on Tuesday its payment arrangement program for primary care physicians reduced hospital readmissions by 16% last year, which potentially saved $224 million.

The potential savings were generated through claims data from members who saw a physician in the True Performance Program versus those that did not participate. Members that saw physicians int he program had 11% fewer ED visits.

In separate article Jay Green writing for Carin’s Detroit Business notes that hospitals and physicians can do only so much to lower health care costs. It is up to health insurers to pass on those savings to policyholders in the form of lower premiums and cost sharing.

Greene writes that this point was made by Robin Damschroder, CFO of Henry Ford Health System, at last month’s Healthcare Financial Management Association conference in Chicago. She was talking about the use of value-based contracting and the efforts Henry Ford has made over the years to lower per-patient costs.