New five-year contract between Independence and Jefferson

Independence Blue Cross is pushing for new contracts with area health systems that accelerate the hoped-for transition from paying for volume of services to paying for positive results.

But it is not taking a one-size-fits-all approach.

"We need to adapt to different providers" because they have "different states of readiness," Anthony V. Coletta, president of Facilitated Health Networks at Independence, said Monday after the announcement of a contract with Jefferson Health that starts Sept. 1 and will last five years.

A new contract with the University of Pennsylvania that took effect July 1 contains a guarantee that neither Independence nor an Independence member will be charged for a hospital readmission within 30 days of an inpatient stay or surgery.

The Jefferson contract does not contain that guarantee because systems have to be built to accommodate that feature. Jefferson is still relatively early in the process of building a tightly knit system with Abington and Aria, Coletta said. By contrast, Penn's hospitals in Independence's five-county region have been together for years.

However, Jefferson is further advanced in telemedicine than other systems in the region, Coletta said. That is a capability Jefferson and Independence hope to build on, perhaps even developing a "hospital without beds." For example, Coletta said, a patient with pneumonia could be cared for at home through telemedicine.

The underlying goal of Independence's new contracts is to facilitate collaboration and information-sharing to improve quality and reduce costs.

"This forces us to act like partners," Stephen K. Klasko said of the new contract.

In other markets, health systems have gotten into the insurance business and insurers have bought health systems. That's tough in the Philadelphia market because Independence remains Southeastern Pennsylvania's largest health insurer while the provider side is relatively fragmented.

Independence also has a new-model contract with Holy Redeemer Health System with a three-year term and a transitional, 18-month contract with Temple University Health System that foresees Temple joining a facilitated health network.

Main Line Health is the biggest remaining system in the region still operating under the older incentive structures. Others operating under legacy contracts with first-generation incentives also include Einstein and Crozer, but those incentives will no longer be available after July 1, 2019, Coletta said.

"I think it's the only way to make sure we have everybody's attention," he said.