Thirty years ago, a small, but mighty, group of employers came together to commiserate about the high cost of health care in Memphis. They commissioned a special study that showed not only were their costs high, but there didn’t seem to be a rationale for how rates were set and there were vast differences, some as high as 80%, between what hospitals charged for the same service.
Deciding that unless they became more active purchasers nothing would change, these employers, joined now by others, formed the Memphis Business Group on Health and decided to pool their lives and invited health systems to bid on their business. No doubt this decision caused quite a stir among health care providers and it was certainly disruptive.
But, what would the response of the health systems be? Would any system actually propose, or would they all sit it out and hope this new activism would just fade away?
Baptist Memorial Health Care stepped up to the plate and said they were ready to forge a relationship with MBGH. None of the other systems responded to the request for a proposal in 1987, but did throw their hats in the ring in 1989 and every bidding year afterwards. Employers working directly with a health system literally redefined what it meant to offer health benefits in Memphis. This was a first for both MBGH and Baptist and actually was an early “first” nationally, as business coalitions were being formed around the country to reduce the cost and improve quality and accessibility to health care services.
The group purchase arrangement was not only innovative and disruptive at the time, but also for how it evolved over the next 12 years. Just a few of the most significant innovations were:
- Agreeing contractually to report quarterly on the quality of care provided by Baptist compared with national benchmarks
- Moving away from a discount off fee-for-service to per diem and case rates for inpatient care and ambulatory surgical procedures
- Providing access to MBGH’s group pricing to smaller businesses through MBGH’s fully-insured Business Group Health Insurance Alliance
As you can see MBGH and Baptist partnered on implementing what is now referred to as “value-based purchasing” at least 10 years before it became a national trend.
Over the past six years, MBGH has recognized the important role Baptist hospitals play in providing high quality, cost efficient care in the greater-Memphis area, including:
- Best odds of survival for heart bypass, aortic vale replacement, pancreatic resection, and esophageal resection
- Reducing the number of babies delivered before they reach full-term
- Improvements in catheter-associated urinary tract infections
- Creating and sustaining a culture of health that supports the health of their employees.
But, as Cristie Upshaw Travis, MBGH CEO says, it is not only about what MBGH and Baptist accomplished together; it is also about the people of Baptist.
“Being the daughter of a physician that practiced at Baptist for over 40 years I have always felt at home there. An especially poignant example of how this personal relationship played out was Steve Reynolds’s invitation for me to be the keynote speaker at the annual meeting of the Baptist medical staff when my Daddy would be recognized. That thoughtfulness has been there in our working relationship as well. From the early days working with Steve Reynolds, Bob Gordon and Mike Clement to our work with Jason Little, David Elliott, Beverly Jordan, Dana Dye, Anita Vaughn, Nancy Averwater and others there has always been a common commitment to putting employees and patients first and, I am glad to say, we have had some fun along the way.”
“Baptist is proud to be a long-term partner with the Memphis Business Group on Health,“ said Jason Little, president and CEO of Baptist Memorial Health Care. “Being MBGH’s first partner, we have always taken best clinical practices and quality excellence very seriously. We look forward to our continued joint work to help improve the health of those in the communities we serve.”
MBGH thanks Baptist Memorial Health Care Corporation for being a special sponsor for our 30th Anniversary. It just wouldn’t be the same if our first partner in this journey were not there to help us blow out the candles on August 20! Thank you Baptist.