Blue Cross Blue Shield of Michigan and Detroit Medical Center Collaborate on a Reimbursement Agreement Based on Patient Outcomes

Brianna Neace

| 2 min read

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DETROIT, Oct. 4, 2017 — The Detroit Medical Center will base a greater percentage of their reimbursement from Blue Cross Blue Shield of Michigan on advancements the hospital system continues to make toward population health management, greater efficiency and performance based on patient outcomes, such as lower rates of hospital readmissions. “DMC is furthering its commitment to value-based care, and we are excited to enhance our relationship with the system so the Detroit community can receive high-quality health care services from a trusted provider in our network,” said Susan Barkell, BCBSM senior vice president for Health Care Value. Moving away from the traditional fee-for-service payment approach and towards reimbursement based on successful patient outcomes is part of a growing trend in health care that BCBSM is leading in Michigan. Fee-for-service, which pays for every covered service provided regardless of impact on patient outcomes — has been a factor behind the huge growth of health care costs over the last decade. “DMC is engaged in enhancing the health, well-being and quality of life of our patients,” said Tony Tedeschi, M.D. chief executive officer at the DMC. “Our hospitals are recognized locally and nationally by leading assessors for quality, and our clinical teams are steadfastly committed to numerous quality initiatives that make a difference in the lives of our patients.” The value-based reimbursement model is designed to further improve the health of patients and the overall population, increase hospital-physician alignment and lower costs. For example, a large portion of the hospital’s reimbursement is tied to quality measures such as reducing duplicate services, moving care to the most appropriate setting and reducing hospital readmission and emergency visits. More than 80 percent of what Blue Cross pays to Michigan hospitals is associated with value-based contracts. “We are building the future of Michigan health care with Detroit Medical Center and other leading health systems that embrace population health management and accountability for outcomes as key components of their value proposition,” said Dr. Thomas Simmer, BCBSM senior vice president and chief medical officer. DMC operates eight hospitals and institutes, including Children’s Hospital of Michigan, Detroit Receiving Hospital, Harper University Hospital, Huron Valley-Sinai Hospital, Hutzel Women’s Hospital, Rehabilitation Institute of Michigan, Sinai-Grace Hospital, and DMC Heart Hospital. Blue Cross Blue Shield of Michigan is a nonprofit mutual insurance company and independent licensees of the Blue Cross and Blue Shield Association. BCBSM provides and administers health benefits to more than 4.6 million members residing in Michigan in addition to employees of Michigan-headquartered companies who reside outside the state. For more company information, visit and

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