Blue Shield of California supports the U.S. Department of Health and Human Services’ efforts to improve the cost and quality of health care in America, and is proud to participate in the Health Care Payment Learning and Action Network launched recently by President Obama and Secretary Burwell. As part of our participation, Blue Shield has committed to having 40 percent of our healthcare spending in value-based payment models by 2016, and 60 percent by 2018.
The Network’s goal to advance payment models that reward high-value and high-quality care is aligned with our mission and consistent with our strategy. Our efforts started more than 30 years ago, with risk-based compensation models, pay-for-performance programs and, more recently, bundled and global payment models.
In 2010, Blue Shield launched our first Accountable Care Organization (ACO), a collaboration with providers that has delivered impressive results by improving coordination of care and reducing costs. The program is a strategic priority for Blue Shield in order to help stem the rising cost of health care while improving quality and delivering a better patient experience. Our model is predicated on a robust framework of aligned financial incentives and shared governance with our hospital and physician partners, and a commitment to the principle that only the best clinical processes can yield meaningful benefits over time. The program has thus far delivered savings to our customers in excess of $313 million and resulted in an aggregate cost of health care increase of about 3 percent annually, roughly half the increase of our non-ACO business.
Since 2010, we have consistently expanded our ACO program. We now have 22 ACOs operating throughout the state, including the San Francisco Bay area, the San Joaquin Valley, Los Angeles, Orange County and San Diego, serving 263,000 Californians. In 2014, we launched our first Medicare Advantage ACOs and in 2015 we are offering a PPO ACO.
We commend President Obama, Secretary Burwell, and the other health plans and provider groups that have made commitments to join the Network and help transform the healthcare delivery system. Only by working together can we accomplish these critical goals.