Paying For Better Health: A Solution to Rising Health Care Costs

MiBlueDaily

March 9, 2026

In our health care system, the vast majority of money is spent to treat illness rather than promote wellness. One of the biggest drivers of rising health insurance costs is the “fee for service” payment model. For decades, providers have been paid more money if they prescribe more tests, procedures and treatments. These payments are made without consideration for whether those services improved a patient’s health outcomes.

How has this worked? Poorly. Our nation’s health has deteriorated and costs for health care services and health insurance have soared.

Now, Blue Cross Blue Shield of Michigan is partnering with physicians and hospitals across the state to change things. We seek to align payment with the health outcomes achieved for patients. It’s called value-based care. In value-based care payment, we reward providers for success in keeping patients healthier, preventing complications and improving outcomes. When providers succeed in improving health, it benefits everyone.

Patients experience better outcomes, and unnecessary costs that drive premiums higher can be avoided. There are several ways we’ve been leading this shift across the health care system.

Blue Cross has been a national leader in value-based care for more than 20 years through the Physician Group Incentive Program, or PGIP — one of the largest programs of its kind in the country. 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.