Independence Blue Cross announces results of its accountable care organization (ACO) payment model

Rewarding physicians and hospitals for collaborating to improve quality of care and lower costs is making a measureable difference in the Philadelphia region, according to initial results from Independence Blue Cross (Independence), a nationally recognized health insurer serving nearly 8.8 million people in 24 states and the District of Columbia, including 2.5 million in southeastern Pennsylvania. Independence’s results demonstrate its success building interest and engagement in its Accountable Care Organization (ACO) payment model, which has been embraced by more than 90 percent of the health care delivery systems in the region.  

“We’re very encouraged by these results,” said Daniel J. Hilferty, president and CEO of Independence. “They demonstrate the power of partnering with health care systems in our region to deliver higher quality, lower cost care with higher patient satisfaction – and transforming the delivery of health care.”

Accountable Care Organizations are groups of doctors, hospitals, and other health care providers that come together to provide coordinated high quality care to their patients. The Independence accountable care payment model requires health care providers, often a hospital and its affiliated primary care physicians and specialists, to establish an ACO-like entity that shares responsibility with the insurer for improving clinical performance and cost efficiency for the care delivered to patients.

Key results from hospitals and health system participants in the first year include:

  • Half of the hospitals participating successfully reduced their medical costs, determined by customized targets based on historical costs;
  • Nearly 90 percent of the participants lowered hospital readmission rates with an average reduction of 16 percent;
  • 100 percent of the health systems improved at least one hospital-acquired infection measure or received a top distinction from the Pennsylvania Department of Health for infection control;
  • Nearly all participants scored better in measures that assess patients’ experience during their hospital stay, such as their understanding of information about recovery at home.
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