Trinity Health-Michigan to partner with Blue Cross Blue Shield of Michigan on outcome-based hospital payment model

Health system commits to performance-based reimbursement in Michigan

May 3, 2012

DETROIT — Trinity Health-Michigan, and its 12 acute care hospitals across Michigan, will partner with Blue Cross Blue Shield of Michigan on a new performance-based reimbursement model.

Under the agreement, Trinity Health has committed to working with its physician partners and BCBSM to tie higher reimbursement payments directly to its success in providing more effective care and achieving more successful patient outcomes for its hospital population.

Moving away from the traditional fee-for-service approach that is behind the huge growth of health care costs over the last decade, the new reimbursement arrangement between BCBSM and Trinity Health advances a new standard for how Michigan hospitals are paid by BCBSM. With Trinity Health's 12 Michigan hospitals serving 31 counties, the agreement will have significant impact on providing more effective care and better outcomes broadly across the state.

"This agreement leverages health insurance dollars not to encourage high volumes of services – but rather more effective care for the population of members cared for by Trinity Health and its physician partners," said Susan Barkell, BCBSM senior vice president for Health Care Value. "This population-based approach addresses many of the issues driving up health care costs, and promotes integrated services and smoother transitions for the patients as they move across care settings. Trinity Health has stepped forward to be a leader in this arena."   

"The changing fabric of health care calls us to embrace the value of collaboration," said Garry Faja, President and CEO, Saint Joseph Mercy Health System (Ann Arbor) and Trinity Health Regional Executive, East Michigan. "Our shared goal is clear: to provide better and safer care at a cost consistent with the demands of the market place, enabling us to fulfill our mission of service to our communities."

Under the terms of the agreement, BCBSM and Trinity Health-Michigan will support the funding of infrastructure improvements necessary to better integrate care services between Trinity Health and its physician partners. Milestones will be established by Trinity Health and its physicians to ensure infrastructure work continues along with funding through 2015. At that time, Trinity Health will continue with a performance-based reimbursement model in its contract with BCBSM.

The agreement recognizes Trinity Health as a leading, innovative and clinically integrated health care organization that will be accountable for the delivery of patient-centric, coordinated, high-quality and compassionate health care.

"This agreement recognizes that integrating physician organizations and hospitals builds a foundation for a better system of health care that places the patient in the forefront throughout the care process," said Dr. Thomas Simmer, BCBSM senior vice president and chief medical officer. "We are pleased that Trinity Health is helping build the future of Michigan health care and we encourage other hospital systems and physician groups to join in a performance-based reimbursement agreement."

Trinity Health hospitals in Michigan included in the agreement are:

  • Chelsea Community Hospital
  • Mercy Hospital Cadillac
  • Mercy Hospital Grayling
  • Mercy Health Partners, Hackley Campus (Muskegon)
  • Mercy Health Partners, Muskegon Campus
  • Mercy Health Partners, Lakeshore Campus (Muskegon)
  • St. Joseph Mercy Ann Arbor
  • St. Joseph Mercy Livingston
  • St. Joseph Mercy Oakland
  • St. Joseph Mercy Port Huron
  • St. Mary Mercy Livonia
  • Saint Mary’s Health Care (Grand Rapids) 

The implementation of the contract will be overseen at Trinity Health by Faja and Roger Spoelman, President and CEO, Mercy Health Partners (Muskegon) and Trinity Health Market Executive, West Michigan.

About Blue Cross Blue Shield of Michigan

Blue Cross Blue Shield of Michigan, a nonprofit organization, provides and administers health benefits to more than 4.4 million members residing in Michigan in addition to members of Michigan-headquartered groups who reside outside the state. BCBSM also offers dental, vision and hearing plans. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. For more company information, visit

About Trinity Health-Michigan

Trinity Health is Michigan’s leading health care provider and one of the state’s largest employers, providing the full continuum of care for Michigan’s residents, with 12  hospitals and numerous ambulatory sites, nine nursing homes, 19 senior housing facilities, eight home health care agencies and four hospices serving 35 counties. More than 27,000 associates provide care to one in 11 Michigan residents. Nationally, Trinity Health is one of the nation’s largest Catholic health care systems with 49 acute-care hospitals, hundreds of outpatient facilities, 26 long-term care facilities, and numerous home health offices and hospice programs based in 10 states.

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