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Home / News & IndustryManaged Care Insight and Analysis
Updated: Sept. 23, 2008
Foundation Awards $1.3 Million To Integrated Healthcare Association

Blue Shield of California Foundation (BSCF) has awarded a $1,328,000 medical technologies grant to the Integrated Healthcare Association (IHA) to implement statewide collection of comparative data; evaluate purchasing and payment systems; and develop a new episode-based payment method for medical device purchasing.

The grant helps to align physician and hospital interests that are now divided through the practice of direct-to-physician vendor incentives, and is part of the foundation’s health and technology program strategy to promote evidence-based clinical best practice and technology adoption among California providers, BSCF said.

"By improving the quality and transparency of the data available regarding medical device use, the IHA project will incentivize surgeons, hospitals, health plans and the medical device industry to work collaboratively to enhance the value of specialty care delivery in California and throughout the nation," said Dr. Kevin J. Bozic, associate professor in residence University of California, San Francisco Department of Orthopaedic Surgery and Institute for Health Policy Studies.

Although IHA is better known for its California pay-for-performance program, it recently completed a two-year value assessment and purchasing project in Orange County, also funded by BSCF, to improve data transparency and payment methods for high-value medical devices, including orthopedic and cardiac implants, in the California healthcare system, BSCF said.

"IHA has a successful history of multi-stakeholder collaboration among hospitals, physician organizations and health insurance plans," said Crystal Hayling, president and CEO, BSCF. "The grant is awarded to IHA to evaluate medical technology used in cardiology and orthopedics, providing California hospitals with information that will be used to help improve quality of care, purchasing methods and payment systems."

Building on the insights from the regional pilot project, the grant allows IHA to:

  • Aggregate comparative data for benchmarking quality and costs, identify best practices strategies for value assessment and begin a statewide hospital technology collaborative; and
  • Explore new financial incentives, potentially including payment methods for hospitals when purchasing devices for manufacturers and for health insurers when reimbursing hospital claims, e.g., through bundled "episode of care" pricing.

The episode-based payment method will be piloted by at least one health plan with participating hospitals, and these experiences will be documented and disseminated to health plans and providers with statewide support from key stakeholders, BSCF said.

Medical device purchasing processes have received greater national attention regarding physician conflicts of interest with medical device companies. Hospitals want benchmarking data and need to adopt best practice strategies to lower medical device costs. Health plans also find it difficult to keep pace with the increasing hospital costs for orthopedic and cardiac implants, especially when their contracts carve out the device, BSCF said.

Addresses: Blue Shield of California Foundation, 50 Beale St., San Francisco, CA 94105; (415) 229-5000, Integrated Healthcare Association, 3 Thomas L. Berkley Way, Suite 350, Oakland, CA; (510) 208-1740,

  This article was taken from:
Pay-For-Performance Reporter

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