Blue Cross & Blue Shield of Rhode Island and Coastal Medical Announce First-of-Its Kind Shared-Savings Contract

(Providence, RI, 3.19.2012)

Innovative agreement creates additional incentives for providers to deliver the highest quality of patient care in a more cost effective manner

(Providence, RI, 03.19.2012) - Blue Cross & Blue Shield of Rhode Island (BCBSRI) and Coastal Medical today announced that they have entered into an innovative, two-year shared-savings agreement aimed at further improving healthcare quality and patient safety, while slowing increases in healthcare costs.

According to BCBSRI, patient safety and healthcare quality continue to serve as the core elements of the enhanced patient-centered medical home model of care. Under the terms of the expanded contract, Coastal Medical becomes eligible for the additional financial compensation if they achieve best-in-class healthcare quality metrics established by the National Committee for Quality Assurance and then manage the total cost of care better than the rest of BCBSRI's primary care physician network. If these requirements are satisfied, Coastal will then be eligible to share a percentage of any meaningful medical cost savings experienced by their group of patients.

"Incredibly, up to one-third of all U.S. healthcare spend is waste, meaning that it is spent on things that don't improve people's health, such as unnecessary hospitalizations or redundant testing," said Peter Andruszkiewicz, president and chief executive officer at BCBSRI. "Here in Rhode Island, where our members' medical costs totaled more than $1.3 billion last year, that's well over $100 million annually in unnecessary medical spend. We're thrilled that Coastal Medical has partnered with us to help redirect some of those dollars to improving our members' health and making healthcare more affordable."

"Excellence in patient care must always come first and is our primary goal at Coastal Medical," said Al Kurose, M.D., president and CEO of Coastal Medical. "One of the biggest frustrations physicians have had under the old fee-for-service model is that they simply can't spend as much time caring for complex patients as they would like to. This agreement realigns the financial incentives to allow our physicians to spend more time caring for our most chronically ill patients. Early detection of illness, better access to care, and closer attention to the needs of chronically ill patients improves their health and creates savings for the system. Patient care then improves, doctors are rewarded for doing the right thing, and care becomes more affordable."

By way of an example, Kurose cited Rhode Island's emergency department usage, which was 17.4 percent higher than the rest of the northeast region in 2010.

Kurose continued, "On the weekends, we don't want our patients to go to the emergency room unless it's really an emergency. For instance, if you or someone you love is having chest pains, we want you to go immediately to the nearest emergency room, no matter what the day. On the other hand, if you think you may have pneumonia or maybe just a very bad cold, we are now able to offer Coastal Medical patients convenient and more affordable weekend office hours. When a patient does require hospital attention, we will ensure that follow-up care is coordinated by the primary care office and seamless for the patient."

Kurose views the program, with its twin goals of improved patient care and cost efficiency, as a pivotal milestone in local healthcare reform.

Andruszkiewicz agreed, saying that "Ultimately, we hope this program will spur positive changes across the entire healthcare delivery system and allow us to provide our members with a more affordable and differentiated healthcare experience."

Innovative collaborations are not new to BCBSRI and Coastal Medical. In 2010, the two organizations worked together to establish a large patient-centered medical home (PCMH) contract designed to provide unique patient benefits that go beyond traditional healthcare and deliver highly-personalized, integrated care to BCBSRI members.

With 101 healthcare providers located in a total of 18 offices in Cranston, East Providence, East Greenwich, Lincoln, Newport, Providence, Pawtucket, Smithfield, Wakefield, Wickford and Warwick, Costal Medical is the largest primary care provider in the state. Coastal Medical provides care to more than 105,000 patients, 35 percent of which are BCBSRI members.

Blue Cross & Blue Shield of Rhode Island is the state's leading health insurer and covers more than 600,000 members. Blue Cross & Blue Shield of Rhode Island is an independent licensee of the Blue Cross and Blue Shield Association. For more information, visit

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