Live from HIMSS: Northwestern Buys BCBS of Illinois

April 6, 2009
2 Comments

Following the model of healthcare systems that have managed to optimize the cost of care with the quality of care—such as Kaiser, Intermountain, and Geisinger—Northwestern Medical announced the purchase of Blue Cross Blue Shield of Illinois today for $3.3B, making Northwestern the only medical center in the US with a fully-integrated delivery system with a University academic mission. In the press release, Northwestern emphasized that “…the acquisition will enable us to personally balance the economic tension between providers-- who are economically motivated by patient volumes-- and payers --who are economically motivated by disease prevention and health maintenance.” The press release went on to say, “Owning our own insurance company will also allow us to contract directly with employers and patients, thus creating a more direct economic relationship with our patients. Any profits derived from the insurance arm of Northwestern will be funneled directly back into the teaching, research, and care delivery missions of our enterprise.”

All the above is a spoof… prompted by my wandering mind during George Halverson’s keynote address yesterday at HIMSS. He presented simple but compelling data about balancing the economics of care and the quality of care at Kaiser, which reminded me of similar presentations from another great system, Intermountain Healthcare. During Mr. Halverson’s address, I pondered, “Hmmm… wouldn’t it be a powerful healthcare delivery model if you could combine the best elements of Kaiser and Intermountain’s “quality vs. cost” economic incentives with the best elements of Northwestern’s specialty expertise, research, and academic missions?”

Hmmm… :-)

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Comments

Thanks Dale. Your provocative post led me to recollect a time 10 years ago, where providers were going to learn to manage the financial risks of care. It would be great to get an economist to remind us when that can work, and when that cant.

Dale,
That was indeed a thought-provoking post! As with Joe Bormel, I was taken back to the mid-1990s, when such acquisitions and creations had become common. What I know is that your organization is in the front ranks of hospital organizations that are moving forward with vision while working intelligently to master issues in the current delivery and financing system.