Hospital and Physician Update

September – October 2020

A message from Steve Anderson
Here’s an update on our value-based contracting efforts

We continue to work closely with hospitals to develop value-based contracts that reward hospitals that are delivering exceptional value to the patient populations they serve.

Here are some of the newest developments:

• Two hospitals in the Bronson Healthcare system — Bronson Methodist Hospital and Bronson Battle Creek — signed new agreements, which were effective Jan. 1, 2020.
• We developed a VBK contract with Spectrum Health, with an effective date of July 1, 2020.
• We’re working on an agreement with MidMichigan Medical Center for all six of its hospitals.

If all these contracts are finalized, that would bring the number of hospitals that have signed VBKs to 79, accounting for more than 88% of our total hospital payout.

In 2019, six health systems signed new multiyear, value-based arrangements, while three amended their contracts as follows:

• Covenant Hospital
• Holland Hospital
• Lakeland Hospital at Niles/St. Joseph
• Memorial Health
• Michigan Medicine
• Prime
• Ascension Health (amended contract)
• Beaumont (amended contract)
• ProMedica (amended contract)

These contracts are separate from our Blueprint for Affordability contracts that I’ve written about in this newsletter previously. With Blueprint, health care systems that successfully manage the cost of care for their patients and meet certain quality measures share in the saving generated, while those who don’t will share in the cost.

Overall, we view value-based contracting as a kind of glide path for acute care providers that encourages them to build the necessary infrastructure to manage overall population health. We recognize that this can only be accomplished by effectively collaborating with physician organizations and other providers across the full continuum of care.

We stand ready to provide our hospital partners with the tools and support they need as they continue their efforts to improve the health of the populations they serve.

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