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Advocate Health Care, Blue Cross and Blue Shield of Illinois Sign Agreement Focusing on Improving Quality, Bending the Health Care Cost Curve

October 6, 2010

Chicago — Advocate Health Care (Advocate), Illinois' largest health care system, and Blue Cross and Blue Shield of Illinois (BCBSIL), the state's largest health insurer, today announced a landmark new agreement that is intended to support improved outcomes and efficiency in patient care.

Under the agreement, which encompasses BCBSIL's participating provider organization (PPO) and health maintenance organizations (HMO), Advocate will be expected to continuously improve clinical quality, patient safety and patient satisfaction, and at the same time, work to contain health care costs.  If Advocate achieves these goals, it and BCBSIL and its customers would share the savings, which have the potential to continue from year to year over the duration of three-year agreement. 

Historically, every two years, BCBSIL's and Advocate's negotiations focused on unit price increases.  This new agreement changes the paradigm: Advocate has agreed to limit annual increases in return for the opportunity to share in savings resulting from its clinical integration programs, which are designed to improve care coordination and reduce redundant care.  Savings will be measured by Advocate's performance compared to other BCBSIL contracting network providers.

"BCBSIL has a long history of working collaboratively with providers to continuously improve care via its 800,000+ member HMOs; its three successful patient-centered medical home programs; and its numerous hospital quality improvement programs, among others" H. Scott Sarran, M.D., BCBSIL's vice president and chief medical officer, said.  "This new agreement with Advocate, Illinois' largest health care provider, is a logical extension of our collaborative quality improvement programs."

"We are excited about the opportunity to enter into a new era of contracting and relationship with BCBSIL," Lee Sacks, M.D., Advocate's chief medical officer and CEO of Advocate Physician Partners, said.  "By innovatively collaborating with health insurance companies, like BCBSIL, we will be able to afford the infrastructure investments and incentives for physicians to better coordinate care across the continuum.  This will allow for elimination of waste and inefficiency found in more traditional approaches to care delivery. Moving from the traditional fee-for-service approach to a fee-for-value one translates into better care for our patients."

This agreement does not change benefits offered in BCBSIL members' policies. "It doesn't change the physicians BCBSIL members choose to see or the services Advocate provides them.  Down the line, what we hope they'll notice is improved outcomes and a more satisfying overall health care experience," Drs. Sacks and Sarran agreed. 

About Advocate Health Care

Advocate Health Care, one of the nation's top 10 health systems, based on clinical performance, is the largest health system in Illinois and one of the largest health care providers in the Midwest. Advocate operates more than 250 sites of care, including 10 acute care hospitals, two integrated children's hospitals, five Level I trauma centers (the state's highest designation in trauma care),two Level II trauma centers, one of the area's largest home health care companies and one of the region's largest medical groups. Advocate Health Care trains more primary care physicians and residents at its three major teaching hospitals than any other health system in the state. As a not-for-profit, mission-based health system affiliated with the Evangelical Lutheran Church in America and the United Church of Christ, Advocate contributed $462 million in charitable care and services to communities across Chicagoland in 2009.

About Blue Cross and Blue Shield of Illinois

With more than 7 million members, BCBSIL, a division of Health Care Service Corporation, a Mutual Legal Reserve Company, is the largest health insurance company in Illinois. Started in 1936, BCBSIL is committed to promoting the health and wellness of its members and its communities through accessible, cost-effective, quality health care. BCBSIL is an independent licensee of the Blue Cross and Blue Shield Association.


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