OSF HealthCare and BCBS-IL to Form New ACO

5/16/2013 - Peoria, Illinois

Blue Cross and Blue Shield of Illinois (BCBSIL) and OSF HealthCare, a system owned and operated by The Sisters of the Third Order of St. Francis, Peoria, Illinois, announced today their intent to form a new, strategic alliance,  an Accountable Care Organization (ACO).  By doing so, the two organizations aim to deliver improved patient care while also focusing on the overall cost of health care.

OSF is one of the largest health care systems in Illinois, serving more than 3.5 million people.  This will be the first commercial ACO for OSF; it is also one of the 32 organizations selected by the Centers for Medicare & Medicaid Services (CMS) for participation in the Pioneer ACO pilot with the federal government. 

The new ACO will see health care providers realign their focus from fee-for-service volume to a value approach for services designed to improve quality outcomes and patient satisfaction.  At the same time, incentives are structured to focus on delivering more services to the patients in greatest need to avoid the consequences of unmanaged or poorly managed disease. 

For example, the ACO will have systems and processes in place to proactively identify those members with chronic disease and have programs to help people better manage their health to reducing unnecessary hospital admissions and ER visits, costly readmissions, and duplication of services.  As evidenced in other ACO arrangements, such attention has led to greatly increased patient satisfaction and has the possibility to make health care more affordable.

The ACO’s objective is to transform the way physicians and hospitals coordinate and deliver patient care by providing financial incentives for delivering even greater quality patient outcomes and satisfaction.  “OSF is the kind of industry leader we see a lot of upside in partnering with,” said Karen Atwood, President, Blue Cross and Blue Shield of Illinois.  She added, “It has the size and scale to make a substantive impact, the clinical best practices in place to be successful, and now its incentives are aligned to benefit both its patients and the overall health care system in Illinois.”

The agreement begins January 1, 2014, and will cover nearly 40,000 OSF patients and BCBSIL members.  The ACO will apply to the BCBSIL commercial fully insured and self-insured populations in Pontiac, Bloomington, Galesburg, Peoria, and Rockford.
The partnership represents BCBSIL’s continued commitment to embracing and fostering value-based care delivery models like ACOs and its Intensive Medical Home model.

All are designed to reward physicians for focusing on managing costs and quality simultaneously, and are intended to move the health care system from its traditional fee-for-service volume approach to a fee-for-value payment model.

Kevin Schoeplein, CEO of OSF Healthcare System, explained what it means to the community and to patients. “Since 1877, OSF has strived to deliver the highest quality of care with exceptional patient experiences and this ACO program is going to build upon the tradition and foundation of clinical excellence that patients have experienced with us.  Patients are going to notice the increased attention and services when they are most in need or at risk for complications from a condition.  Our new arrangement is going to align the incentives to provide a greater emphasis and focus on improving the quality of care that we deliver in a way that is centered on the patient.  As we begin to see the results from this model over time, our hope is that it will also allow health care to be more affordable.  Blue Cross will reward us for success, and we’ll realize reduced reimbursements where we miss the mark.  In the end, everyone wins by driving improvement.”

This new ACO model of health care delivery is designed to improve outcomes in three key categories: quality of care, patient experience and satisfaction, and cost efficiency. It achieves those goals by pursuing the following strategies:

  • Early identification of disease and illness through effective management and coordination of patient care;
  • Use of advanced technology and support services to make more informed decisions and foster the patient-physician relationship as well as transitions in care;
  • Implementing an alternative, non-fee-for-service payment arrangement;
  • Lowering the cost trend through better coordination between the payer and provider. This is to be done without limiting medically necessary services.

"This agreement is significant,” says Opella Ernest, MD, vice president and chief medical officer for Blue Cross and Blue Shield of Illinois. "We’ll take better advantage of clinical data between our two organizations to assist in wise, medical care decision-making and improve patient safety.”



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