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Posted on Mon, Apr 29, 2013 : 1:56 p.m.

Ann Arbor's St. Joseph Mercy hospital among Trinity Health facilities starting new reimbursement model

By Amy Biolchini


St. Joseph Mercy hospital in Superior Township.

Amy Biolchini |

St. Joseph Mercy Ann Arbor is one of 12 Trinity Health-Michigan hospitals starting a new model for reimbursement in a partnership with Blue Cross Blue Shield of Michigan, according to media reports.

In a three-year agreement with Blue Cross, Trinity Health will not abandon its fee-for-service model, in which insurers pay the hospital for each visit, test and procedure.

The agreement will add rewards for hospital facilities that reduce costs, redundant tests and readmission rates.

The new reimbursement model will launch first on the west side of Michigan and move to Trinity Health facilities on the east side of the state by July, MLive reported.

Amy Biolchini covers Washtenaw County, health and environmental issues for Reach her at (734) 623-2552, or on Twitter.



Tue, Apr 30, 2013 : 12:55 p.m.

This is nothing new. They have been doing it for years already. The article even says "they will continue their fee for service model". For instance, they have the 23 hour unit where they keep people for observation then release them before they are there for 24 hours so they don't have to charge insurance (or the patient) for an overnight stay. U of M also does this in the chest pain center for example. Doctors who keep patients in the hospital longer than the insurance companies think they should, especially BCBS, punish both the hospital and the patient. These are DRG stats. "Managed Care" has been here for years already folks.


Tue, Apr 30, 2013 : 3:58 a.m.

' "Ultimately the customers will pay less in premiums because as care becomes better managed the cost goes down … premiums go down," she (Senior V.P. at Blue Cross Blue Shield) said. ' Yeah.... riiiight. Or the cost to BC/BS goes down, the customer pays the same (or ever-increasing) premiums and BC/BS profits even more. I'm going to predict they go with Plan B.

Basic Bob

Tue, Apr 30, 2013 : 10:36 a.m.

BCBS does not make "profits". But they might hand out some hefty bonuses to top management.


Mon, Apr 29, 2013 : 11:46 p.m.

Lose weight. Exercise regularly. Don't smoke. Brush and floss your teeth. Eat a well-rounded diet. Clean and cook your food appropriately. Wear sunscreen and sunglasses outdoors. Wear a helmet on a motorcycle. Wear your safety belt in the car. Wash your hands. Get your immunizations. Get preventative screening tests recommended by your doctor. Don't go to the emergency department unless it is an emergency. Take prenatal vitamins if you are pregnant. Don't drink alcohol excessively. You can't count on others to make you healthy. Start with the things under your control. As far as health care costs go, 5% of the population consumes 50% of health care costs. This is mostly for chronic conditions, including diabetes and hypertension, which can be improved or prevented by lifestyle changes.


Tue, Apr 30, 2013 : 1:47 p.m.

I should have worded my sentence better and not used "you are mistaken." Instead, I should have said you need to be more precise when using the word "diabetes." You may know there are two types, but many do not. And most people think that when they hear the word diabetes then that person can just alter their lifestyle and the problem is solved. But when you have over 3 million Americans suffering from Type 1 diabetes, through no fault of their own, it can become frustrating to hear these generalizations and statements about diabetes. So, in the future, be specific.


Tue, Apr 30, 2013 : 2:32 a.m.

@maallen: Yes, I know there are two types of diabetes. Yes, I know there is more than one type of cancer. @DBH has tried to help you. Is your point that not everything is 100%? Fine. But substantially the point remains. Familiarize yourself with the following and then we can have a conversation:


Tue, Apr 30, 2013 : 1:24 a.m.

@maallen, as I had written, you are correct. Nonetheless, having written that, if 95% of the cases of diabetes in adults is Type 2, then @1bit is SUBSTANTIALLY correct. Substantially correct means that, while not 100% correct, for the most part (95%) it IS correct. There's no disagreement in reality, just a difference in emphasis.


Tue, Apr 30, 2013 : 1:10 a.m.

DBH, The point is, you can't lump type 1 and type 2 diabetes together. To make a statement saying diabetes is preventable is wrong. It's like saying cancer is preventable. One must be specific as which type of cancer is preventable. You can't just make a blanket statement.


Tue, Apr 30, 2013 : 1 a.m.

You are not totally correct...there are a lot of conditions out of a persons control.


Tue, Apr 30, 2013 : 1 a.m.

@maallen, you are right, of course. However, in the USA Type 2 diabetes accounts for 90-95% of all cases of diabetes in adults, so @1bit's point regarding diabetes and avoidance of disease is substantially true, even without the Type 1/Type 2 qualification.


Tue, Apr 30, 2013 : 12:02 a.m.

1bit, You are mistaken when it comes to diabetes. There are two types....Type 1 and Type 2. The type 1 is commonly referred to as Juvenile Diabetes and has nothing to do with lifestyle changes. These are individuals who's pancreas does not produce any insulin whatsoever so they must take insulin through shots/pumps. Type 2 is often referred to as Adult Onset and can be controlled by lifestyle changes.


Mon, Apr 29, 2013 : 10:35 p.m.

Welcome to the ObamaCare reality. Under ObamaCare, Doctors and Hospitals are paid more if they have a lower readmission rate. Under ObamaCare, doctors and hospitals get paid more if they use equipment that costs less. And under ObamaCare doctors and hospitals get paid more if they treat you with an alternative other than surgery. This is just the beginning.


Sun, May 5, 2013 : 4:05 p.m.

DBH, As a consumer/patient on the receiving end of these tests, you have every right to decline them if you feel they are excessive. This is between the patient and doctor, not a 15 member board that is sitting in Washington DC to decide. I agree that these excessive tests are more about the fear of malpractice suits. And it would have been wise to tackle that problem, but the trial lawyers lobbied successfully against it. That would have helped more in reducing excessive testing and costs vs the government trying to limit the testing, because even with the government trying to force the issue, it will do nothing to stop all the malpractice suits and the cost of malpractice insurance. So the cost is going to continue to go up. It did nothing to resolve the issue. "Had there not been rationing, the costs undoubtedly would have been even higher." Where is your proof of such a claim? If it were to be higher, then why is England and Canada revamping their healthcare system? Canada is now allowing for private practices to be set up to have surgeries done because it can be provided cheaper and with less wait time than going through the national system. Their Supreme Court has said as much. England is getting rid of their "boards" and allowing the patient and doctor to come up with a plan becuase it helps reduce costs. In regards to readmission, it is not a hypothesis. It is already happening because that part of the law has already taken affect. Patients are not being readmitted, but instead are placed on observatory status. As some have already posted that this is happening to them, but they mistakenly attribute it to the insurance company when in fact it is the hospitals that are doing this which forced the insurance companies to have to address it and come up with a billing code, etc.


Fri, May 3, 2013 : 10:14 p.m.

@maallen, I have been on the receiving end of excessive use of technology, so I know whereof I speak in this regard. Many physicians order as many tests as they can, including utilizing as much new technology as they can, because they like to have more information rather than less, and particularly because they are concerned about missing something and a subsequent malpractice suit than they are about the adverse effects (most delayed, but statistically inevitable) of such tests, such as CT scans. Your example of countries that ration health care not resulting in a reduction in health care costs is faulty. Had there not been rationing, the costs undoubtedly would have been even higher. Rationing of the use of technology is only one way to rein in inappropriate use of technology in the medical field. Better education of physicians (and others responsible for ordering such tests) on the costs and potential adverse consequences to patients, and creating a more sensible system for filing malpractice suits to reduce frivolous filings, would go a long way to limit technology appropriately. Your arguments regarding gaming the system regarding readmissions with ACA may be valid, but it is hypothetical at this point. Whether it will prove to be correct awaits statistics regarding correlating health outcomes (including death), readmission rates, and costs. We don't have that information at this time.


Fri, May 3, 2013 : 3:24 p.m.

"The government SHOULD limit the use of technology when the benefit/risk and benefit/cost ratios are considered and determined to be too low." In Canada they already do this & it has not stopped the explosion of their healthcare costs! And because of this my nephew was affected by it. They limit their technology use, where they have only one Cat scan machine for 4 hospitals, created a long list of people waiting. The doctor suspected my nephew of having a cyst or tumor on the brain, but couldn't do a cat scan for another year because of the long list of people ahead of him. Only people who got to the front of the line were the life threatening cases. Had my nephew waited that whole year just for the cat scan it would have turned life threatening. Instead, they came here to have cat scan done. England already does this too and it has not stopped their explosion of healthcare costs! Matter in fact they routinely deny older people from receiving cataract surgery because the cost of the surgery does not outweigh the quality of life and how long the person is expected to live. So they let them go blind. No thanks to the government limiting the use of technology! It should be between the patiend and doctor, not the government.


Fri, May 3, 2013 : 3:02 p.m.

DBH, It is quite apparent that you have not read the 2,000+ pages either. Before ObamaCare, hospitals and doctors readmitted patients without any "fear" of being reprimanded. and could solely focus on the patient. But now under ObamaCare, funding for that Hospital and Doctor is severely affected if they readmit someone. Hospitals and doctors are forced to look at their bottom lines as they treat a patient. I they can keep the patient out of the hospital during a certain time frame, and give them a "bandaid" as a temporary solution, until that said time period is over, then readmit them, then they will do that because it will not affect their bottom line. So in essence what will play out is, instead of tackling the problem right away (most cost effective) they will essentially make the patient wait, give them temporary solutions, until that readmission perriod is over and then readmit the patient. In the end, it will be more costly. "The government SHOULD limit the use of technology when the benefit/risk and benefit/cost ratios are considered and determined to be too low." That is the slippery slope isn't it? Shouldn't it be left up to the patient and doctor as to what treatments and technology should be used for the best outcome for that patient? It should not be left to a board of 15 government employees to make those decisions.


Thu, May 2, 2013 : 2:07 p.m.

maallen, I have thought about it; you need to do the same. If there is a medical indication for readmission, the hospital would be penny wise/pound foolish to not readmit them. If the patient should suffer adverse consequences, including death, the cost of defending a malpractice lawsuit, and the likely payout for such a lawsuit if it should exceed their insurance limits, would be much more costly than the relatively small amount of income differential if they had just readmitted the patient and taken care of the problem. Even if the judgment or settlement was less than their insurance limits, such unconscionable behavior on the part of the hospital would lead to higher malpractice premiums, soon outstripping the modest savings achieved by not dealing with the patient properly in the first place. Yeah, that's an even worse idea. My comment regarding technology was not meant to say (nor did it say) that all technology, advanced or not, should be limited. Any technology that results in a net benefit to the patient would be appropriate, including insulin pumps. With the improvement in patient outcomes with the pumps, even insurance companies (including any funded by the government, such as Medicare or Medicaid) benefit, since the cost of care of those patients is reduced. What has gotten out of hand, though, is the overuse of technology that adds little to no benefit to the patient. Often, patients are given CT scans (very costly, and dangerous as they involve ionizing radiation) when an ultrasound or a thorough physical examination would be as informative, with no harm to the patient. Just because technology is available does not mean that it should be used. Such use of technology (much of it inappropriate) is responsible for the exploding costs of healthcare in the past couple of decades. The government SHOULD limit the use of technology when the benefit/risk and benefit/cost ratios are considered and determined to be too low.


Tue, Apr 30, 2013 : 2:03 p.m.

DBH, Think about it a little.....will a hospital be willing to readmit someone if it affects how much money they receive from the government? They will do everything in their power to keep their readmission rates low so their bottom line will be higher because the government will give them more money for their low readmission rate. Yeah, that's not such a good idea. Over the years, technology has gotten better and better and with that we are able to have early detection of diseases, manage chronic diseases better, etc. So why should the government limit the use of advanced technology? Since someone brought up Diabetes earlier, let's focus on Type 1. For years, Type 1 had to take shots multiple times a day to get insulin. Then came the insulin pump, they no longer have to take mulitple shots daily and they can have continious insulin 24 hours a day. This method has reduced long term effects of diabetes and has improved the quality of life for that diabetic. So then why should the government limit the use of technology?


Tue, Apr 30, 2013 : 2 p.m.

JayS, You do realize that BCBS has medicare plans, don't you? So yes, BCBS is directly affected by ObamaCare's payments and incentives along with hospitals and doctors. And now the government determines what premiums you pay to the insurance company. There is no false connection. It is all connected. Just read the 2,000 + pages of the bill. You did read it didn't you?


Tue, Apr 30, 2013 : 3:47 a.m.

Obamacare does not control commercial insurers like BCBS with regard to payments or incentives to healthcare facilities. It only does so for Medicare payments and incentives. So, with all due respect, you are drawing a false connection between what this story is reporting and Obamacare.


Tue, Apr 30, 2013 : 1:26 a.m.

You make those statements sound as if they are negatives. Lower readmission rates, using less expensive equipment to achieve the same end (or sometimes better end), and avoiding surgery with its attendant potential complications all are worthy goals. If these are the result of ObamaCare, then I'm all for it.


Mon, Apr 29, 2013 : 6:43 p.m.

I've read that reducing readmission rates amounts to having patients come back for "observation" in a hospital so it's not coded as a readmission. However, you are still an outpatient when you are in a hospital "under observation" -- even when you stay overnight -- and your reimbursement from the ins co will mean more out of pocket expenses for you. Around the country, hospitals are scamming the system so their statistics on readmission look better than reality, and the patient ends up paying more, of course. The only winners are the parasitic insurance companies.


Wed, May 1, 2013 : 8:57 a.m.

Sorry, you're wrong on that, A2Trader. Hospitals get better reimbursement on short-stay (23 hour or less) observation. That's why all the hospitals in the area opened up Chest Pain Centers attached to their ER's a few years back, they're money-makers, all they did was re-classify what a patient was called while they were staying at the hospital. It's all how the hospital codes it to insurance, insurance companies don't tell the hospital afterward whether you were an inpatient or an observation patient. The hospitals and the insurance companies all play this game, and it's the private individual who gets screwed when they end up having to pay far more out of pocket. It's a ridiculous system that's not based on what gives the best patient outcome, but what brings the most revenue through.


Tue, Apr 30, 2013 : 7:01 p.m.

@RuralMom, a2trader is correct.


Tue, Apr 30, 2013 : 12:26 p.m.

The hospital is NOT the one that makes the determination that you were on "observation." Your insurance company does. If the condition and treatments don't add up to "you-were-admitted" then the insurance considers it "observation." You can actually be in the hospital for two nights and your insurance will still say it was just "Observation." So the hospitals aren't the ones scamming the system. They would rather be paid the higher rate for an inpatient stay.


Mon, Apr 29, 2013 : 6:46 p.m.

Its like when my Sister went into the ER for Chest pains, they ruled out a Heart Attack quickly, then kept her in the ER for 23 hours as an observation verses an admitted status. Co Pay was huge in comparison to what it would have been for her had she been fully admitted to the hospital for this observation.


Mon, Apr 29, 2013 : 6:27 p.m.

Whew! Thank goodness we chose U of M over St. Joes. This is a cost-saving measure, pure and simple. Great for the insurance company, tough on the hospital that has to get lean. What physician is going to feel comfortable diagnosing something from an iPhone picture? What patient is going to feel comfortable with same? This will be interesting to follow...


Mon, Apr 29, 2013 : 6:26 p.m.

When is St Joes EVER going to get in the United Health Care network? UHC, the largest health care insurer in the US.....and St Joes isn't in the network, requiring people with UHC to go to UM Hospital.


Tue, Apr 30, 2013 : 6:59 p.m.

I work at a medical office, and agree with JayS, unfortunately. UHC also bought a perfectly good (ie straightforward) private Medicaid called Great Lakes Health Plan, and now that's a nightmare to deal with, too. I will say their AARP Medicare supplement is straightforward (for now). If big providers like hospitals don't reject these difficult insurances, the insurances have little if any incentive to conduct themselves fairly.


Tue, Apr 30, 2013 : 3:36 a.m.

UHC is arguably the most despised insurer in the US (from a healthcare provider standpoint) but certainly the most difficult to deal with when it comes to credentialing (the process for becoming an in-network provider). I own a medical practice and speak from first hand experience. They are completely unapologetic for their lack customer service, they are rigid and they are a bureaucratic nightmare. If you are one of their members I sincerely wish you good luck, you likely will need it.


Mon, Apr 29, 2013 : 10:10 p.m.

If the mountain won't come to Muhammad, Muhammad must go to the mountain.


Mon, Apr 29, 2013 : 7:54 p.m.

Be careful what you wish for...