Munson Healthcare in Traverse City has a new contract with insurer Blue Cross-Blue Shield of Michigan. It includes incentives to keep people out of the hospital, to reduce infections and return visits.
Munson CEO Ed Ness says it’s a big departure from contracts of the past.
“If we’re successful, really for the first time much of our payment is based on our quality, rather than just providing volume,” he says.
Ness says this is the first time an insurer will be financially rewarding the hospital when improved care reduces the need for more expensive treatments and surgeries.
He says Blue Cross will also pay for technology upgrades designed to improve communication with doctors’ offices.
“If we’re trying to manage a chronic disease, such as diabetes or this other complication, we can do that not only in the hospital but in the community as well. And I think this is really where healthcare needs to move if we’re really going to reduce cost.”
The contract is similar to those now in place in several Michigan health systems, including Trinity Health, which has hospitals in Grayling and Cadillac.