The Total Cost of Care: The Full Picture of Health Care Costs and the Blue Cross Advantage
Blue Daily
| 5 min read
Key Takeaways
- Blue Cross Blue Shield of Michigan promotes a Total Cost of Care (TCOC) approach that evaluates prevention, treatment and recovery to give employers a clearer view of overall health‑spending and to guide benefit‑design decisions.
- Value‑based care programs—including patient‑centered medical homes and collaborative behavioral‑health integration—link provider payments to outcomes, a strategy that has saved hundreds of millions by cutting emergency visits, avoidable hospitalizations and costly complications.
- Payment‑integrity services and coordinated‑care offerings, such as virtual health tools and whole‑health programs, aim to eliminate claim errors and reduce per‑member expenses, delivering roughly $3,600 in savings per managed employee while supporting employee health.
Health care costs continue to rise, leaving employers struggling to control spending while still providing employees with access to high quality care and whole health solutions. Blue Cross Blue Shield of Michigan is committed to working alongside employers to help manage your total spend and drive better outcomes through program design, member engagement and resources that encourage healthy employee behavior.
To manage rising costs, Blue Cross and Blue Care Network takes a Total Cost of Care (TCOC) approach – from prevention and treatment to recovery outcomes. By looking at the total cost of care, employers can make more informed decisions about their health care planning and better navigate the complex health care system. As a trusted partner, Blue Cross can help you achieve this goal by providing access to our unparalleled network, partnering with providers who are committed to quality and cost savings and offering integrated care programs that bring together medical, behavioral and pharmacy benefits.
TCOC encompasses your organization’s total spending on health care and health benefits for your employees and their dependents.
Network and benefit design: strength and savings
A strong network with competitive discounts is at the foundation of TCOC. As networks continue to shift from volume to value and solutions evolve and emerge, such as centers of excellence and high-performance and narrow networks, plan design decisions can impact both cost trends and employee access to care. By carefully evaluating these options, employers can reduce unnecessary spending and steer employees to high-value providers. Blue Cross partners with you to model different options, assess financial impact and align network and benefit strategies with your health care priorities and goals.
Clinical programs: value-based care
Blue Cross has been leading the way toward a better approach known as value-based care. In this model, providers are paid based on the patient outcomes they deliver — including care quality and overall efficiency — not just the number of services provided. Our value-based care model focuses on wellness, prevention and effective coordinated care to produce better health outcomes.
- Physician Group Incentive Program: Blue Cross has been a national leader in value-based care for more than 20 years through the Physician Group Incentive Program (PGIP). More than 20,000 physicians across Michigan participate working together to improve care coordination, increase preventive screenings and better manage chronic conditions. These efforts help patients avoid complications and hospital stays, which are among the most expensive forms of care.
- Partnering to pay differently: Blue Cross is also partnering with hospitals to improve safety and reduce preventable complications. Our long-term agreement with Corewell Health includes a portion of payment that is focused on shared goals aimed at preventing serious and expensive medical events such as infections after surgery, falls and hip fractures, kidney failure and respiratory complications. Our new agreement with Henry Ford Health also establishes a partnership rooted in outcome metrics.
- Patient-Centered Medical Home: This Blue Cross designation program strengthens primary care by supporting physician-led teams that coordinate care, monitor chronic conditions and intervene early. From 2009 through 2023, Blue Cross-designated Patient-Centered Medical Home providers helped prevent approximately $814 million in medical costs by reducing emergency room visits and avoidable hospitalizations.
- Blue Cross’ Collaborative Care: This program integrates behavioral health support directly into primary care and OB/GYN offices, improving access to mental health treatment and care coordination. This approach improves health outcomes while reducing costly hospitalizations. Studies show Collaborative Care delivers approximately $1.70 in savings for every dollar invested.
Cost protection
One of the most fundamental ways to keep costs in check is to ensure that your health plan includes a solution that verifies your medical claims are paid accurately and are free of wasteful or abusive billing, often referred to as payment integrity. It’s estimated that up to 80% of medical claims contain errors, according to Medical Billing Advocates of America. And whether those mistakes are the result of human error or deliberate fraud, inaccurate billing can be a costly problem. As an organization, trying to manage this is costly and time-consuming. Blue Cross alleviates the administrative burden for employers by finding savings and providing accurate clear billing.
Member engagement: programs and solutions ready to support and keep employees healthy
Blue Cross Coordinated Care is one of the many member programs we offer that lowers costs while keeping your employees healthy. Blue Cross Coordinated Care saves approximately $3,660 per managed member with a 25% reduction in medical expenses for frequent impatient hospital admissions.
Other programs offer whole health solutions to your employees by helping close gaps in care and improve outcomes:
Blue Cross is committed to helping you manage your total cost of care for your organization by providing access to our unparalleled network and flexible benefit packages. We’re ready to help you create a benefits package to control health care costs while attracting and keeping talent.
Learn more about how a total cost of care approach can help you manage spending and support employee health and explore the programs available to your self-funded organization.
Personify Health is an independent company that provides health and well-being services on behalf of Blue Cross Blue Shield of Michigan and Blue Care Network. Maven is an independent company supporting Blue Cross Blue Shield of Michigan and Blue Care Network by providing family building and women’s health support services. OncoHealth® is an independent company supporting Blue Cross Blue Shield of Michigan and Blue Care Network by providing cancer support services.
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