Jefferson Health signs new contract with IBC that prioritizes prevention over cure

Jefferson Health and Independence Blue Cross on Friday announced a new three-year contract, which they described as prioritizing illness prevention as part of an effort to reduce costs and improve quality.

The contract, which took effect Jan. 1, is significant because Jefferson is the region’s largest health system measured by hospital beds, while Independence has the largest market share among health insurers in Southeastern Pennsylvania. It ensures no disruption in service for thousands of Independence customers who use Jefferson doctors.

Few details were available Friday on how the contract moves Jefferson farther along the road toward a long-anticipated payment system that pays health-care providers based on quality rather than on the volume of services provided.

A Jefferson spokesperson said the nonprofit’s previous arrangement with IBC allowed it to keep a share of any savings it generated compared to targets. The new contract “aligns reimbursement with preventive care rather than sick care,” said John Brand, Jefferson’s chief communications officer.

Based on available information, Jefferson’s new contract, which includes all 14 Jefferson hospitals, does not go as far as the one between IBC and the University of Pennsylvania Health System. Under that arrangement, which took effect in 2017, neither Independence nor an Independence member has to pay for a hospital readmission within 30 days of an inpatient stay or surgery.

“Over the next year we will be working on several initiatives that will be groundbreaking and similar in significance to Penn’s but different and unique to us,” Brand said.

The new Jefferson-IBC contract is also noteworthy because Jefferson has agreed to buy Temple’s share of Health Partners Plans Inc., a Medicaid and Medicare insurer in Philadelphia. If Jefferson is able to complete its acquisition of Einstein Healthcare Network, it would own 100% of Health Partners and be in a position to compete with IBC.

The U.S. Federal Trade Commission and the Pennsylvania Office of Attorney General last week sued to block the Jefferson-Einstein deal, alleging it would reduce competition and allow Jefferson to raise prices for employers and consumers. Jefferson and Einstein have argued that the deal would help preserve health-care services for a vulnerable population in North Philadelphia.