UNC Health, BCBS plan joint facility

Staff WriterJanuary 11, 2011 

Two of the state's largest health care companies are joining forces to open a new type of medical practice in the Triangle, the latest evidence that the federal overhaul law is spurring major shifts in the industry.

Blue Cross and Blue Shield will collaborate with the UNC Health Care System to build a primary care facility that will coordinate care exclusively for about 5,000 Blue Cross members. The company is the state's largest health insurer.

Blue Cross and UNC Health will announce the project this morning, but are still working out details. Officials want to open the practice in Durham or Orange County and expect it to be ready by later this year.

The partnership was driven partly by the federal health overhaul, which includes a wide range of provisions designed to encourage the medical industry to try new ways to cut costs and improve care.

"The climate is calling for change and innovation," Blue Cross CEO Brad Wilson said. "North Carolina continues to be a leader in finding new ways to provide health care."

But critics worry that such changes will consolidate the health care industry. That could hurt consumers and limit choices.

"If a few select organizations have tremendous market power, it eliminates competition," said Joseph Coletti, director of health and fiscal policy studies at the John Locke Foundation, a conservative think tank in Raleigh. "It could make it more difficult for consumers to get the care they want."

One trend gaining steam nationally is the creation of so-called accountable-care organizations, provider groups that accept responsibility for the cost and quality of care delivered to a specific population of patients. Last year, Congress directed the federal agency that oversees Medicare and Medicaid to establish a framework for such organizations.

The new organizations differ from HMOs, in which insurers were calling more shots for medical care and costs.

Going with the flow

New rules will encourage physicians and hospitals to work more closely to improve care, including by allowing them to keep some of the money Medicare saves when expenses are reduced. That's driving physicians to affiliate with hospitals, which could reshape how patients receive care.

The UNC Health partnership with a major health insurer goes a step further.

The CEOs of UNC Health and Blue Cross said the medical practice will be a starting point and that they expect to collaborate on other efforts down the road. That could include additional joint ventures and exploring ways to improve inpatient hospital care, said UNC Health CEO Bill Roper.

"We could have done this before the reform passed, but the legislation last year and continuing debate only adds to the urgency that we get serious about redesigning health care," Roper said. "Whatever happens in Washington or Raleigh, our health care costs too much. We need to do better."

Financial terms of the deal weren't disclosed. The two organizations, both based in Chapel Hill, will split costs. "The goal is for Blue Cross to save money, and we profit at the same time," Roper said.


Shortly after Wilson took over as Blue Cross CEO nearly a year ago, Roper suggested they meet to discuss ways to collaborate. That led to teams from each company working for the past four or five months to set up the new practice.

Wilson and Roper have talked about their partnership with White House officials, who they say are excited to hear about new efforts to redesign the health delivery. They also were scheduled to brief Gov. Bev Perdue about the project on Monday.

Both CEOs said they may look at similar collaborations with other partners, too.

The new practice will provide primary care for Blue Cross members, including some covered by the state health plan, who have chronic conditions such as diabetes, heart disease, asthma and major depression. The practice will include a range of physicians affiliated with UNC Health, and offer other services, such as mental health, home monitoring and nutrition. The facility will not have hospital or surgery beds, and isn't expected to require state regulatory approval.

Wilson has said previously that he wants Blue Cross to expand into new lines of business beyond health insurance. In this case, the practice's health care will be run by UNC Health providers. "We are not going to be practicing medicine here, but they will have access to our expertise on data processing, claims" and more, he added.

The practice's patients ultimately will need to hold Blue Cross and UNC Health accountable and decide whether the experiment is successful, said Adam Searing, project director of the Health Access Coalition, part of the N.C. Justice Center, a liberal consumer advocacy group in Raleigh.

"This is what a nonprofit Blue Cross plan should be doing, coming up with innovative solutions," Searing said. "But it's the details that matter. We need to make sure these new models are consumer friendly, and that they're improving outcomes, not just cutting costs."

alan.wolf@newsobserver.com or 919-829-4572

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