BCBS Minnesota, Minnesota Oncology Achieve 10% Cost Reduction Through Value-based Contract


After moving away from a fee-for-service model in 2019, Blue Cross and Blue Shield of Minnesota and Minnesota Oncology announced last week that its value-based model has achieved promising results.

The five-year value-based agreement rewards Minnesota Oncology if the total cost of care for BCBS Minnesota members with employer group coverage is less than competitors in Minneapolis and St. Paul. An analysis of its most recent available data found that the arrangement achieved a total cost of care that is 10% lower than the Twin Cities’ oncology market. 

“This is the first time we have been able to demonstrate that quality care can be affordable and if a provider and payer work together, costs for cancer care can be decreased,” said Dr. Rajini Katipamula-Malisetti, vice president of medical oncology and quality director of Minnesota Oncology.

Emergency visits and inpatient admissions also declined during this period for patients with BCBS Minnesota employer group coverage. Minnesota Oncology declined to provide raw data, however.

A major factor for the decrease in cost, emergency visits and patient admissions was the care coordination initiatives put in place with the value-based arrangement. Through the care coordination services, Minnesota Oncology reaches out to BCBS Minnesota patients several times throughout their cancer journey.

“When they are first diagnosed and come to [Minnesota Oncology] for chemotherapy, our social workers, also known as care coordinators, contact the patient to discuss any concerns they may have related to treatment and unrelated to their treatment,” said Jay Scott, director of managed care for the provider. “The social work team makes additional care coordination calls to patients later in their journey and some patients stay in touch with the social workers throughout their time at [Minnesota Oncology].”

After achieving these results, BCBS Minnesota and Minnesota Oncology are expanding their agreement by adding three new quality measures in 2023, said Eric Hoag, vice president of provider relations for the payer, in a news release. These measures are patient reported pain improvement, palliative care and social determinants of health.

The preliminary data show that value-based care can both improve outcomes and lower costs, declared Dr. John Schwerkoske, president and medical oncologist at Minnesota Oncology.

“Cancer patients face a big challenge when it comes to the cost of quality, comprehensive care,” Schwerkoske said in a statement. “Under this agreement with Blue Cross, we now have encouraging evidence that our model works. It is possible to offer state-of-the-art therapies, precision medicine, genetic testing, palliative care, and access to clinical trials while lowering overall costs.”

Photo: Nuthawut Somsuk, Getty Images

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