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Physicians, BlueCross BlueShield of WNY and Kaleida Health Announce Historic Strategic Partnership

Updated: 4/24/2012

MOU Provides Framework for Region’s First Integrated Health Network

An emerging network of Western New York physicians committed to providing quality care have partnered with BlueCross BlueShield of Western New York and Kaleida Health to create a new, physician-led healthcare organization that will provide tailored network health benefit offerings.

Tailored network health benefit offerings have produced significant cost savings for patients and communities.

Utilizing the Kaleida Health and physician network – supported by sophisticated information systems and technology – ensures patients get the right care, in the right place, at the right time. Quality care costs less.

The new partnership is the first of its kind for this region – bringing all three elements of the healthcare delivery system together: physicians, hospitals and a health plan. It is being designed to enhance the ability of physicians to provide patient-centered care, with less administrative burden, supported by the region's largest health system and insurer.

"America spends 50 percent more on health care than any other country. An aligned team of physicians, health plan and hospital, as announced today, has the ability to lower costs while preserving quality and improving the patient experience,” said Thomas Rosenthal, M.D., professor and chair of the department of Family Medicine with the University at Buffalo (UBMD). “We only need look at places like the Mayo Clinic and Advocate Health in Chicago to see what physician-run health care can do for quality and costs. It is an exciting time, but there is a lot of work to be done. None of us will be satisfied until all patients feel they truly have a partner in health. " 

“This is an exciting day to be a physician in Western New York,” said Ajay Chaudhuri,M.D., a member of the physician leadership council and Associate Professor of Medicine, SUNY at Buffalo; Director, Diabetes and Endocrinology Center, Kaleida Health, State University of New York, Buffalo. “For the first time, this tailored network and partnership have brought the three key players in healthcare delivery together – the quality driven physicians, Kaleida Health and BlueCross BlueShield, with the primary focus of providing exceptional care to our patients. This partnership will provide physicians innovative resources for better care coordination, clinical integration and healthcare management while reducing their administrative burden.”

This is a strategic partnership between providers, including community physicians and a significant health plan that will assure accountability for both the clinical outcomes of the patients and the costs of the care delivery model. It seeks to be responsible for care coordination, quality of care and the long term financial viability of the care offered.

Robert Gatewood, M.D., a member of the physician leadership council and practicing cardiologist with Buffalo Cardiology and Pulmonary Care Associates, said, “This is one of the most important and exciting projects I have been involved with during my 32 years of practice. This initiative will allow physicians, in partnership with BlueCross Blue Shield and Kaleida Health, to lead thoughtful and effective healthcare reform. It will allow physicians the opportunity to develop unique and innovative ways to improve both the quality and cost of health care in our region. The goal is to provide patients with the right treatment, at the right time, in the right place and at the right price.”

This unique model will be offered directly to employers as an alternative to today’s traditional health benefits model. This model aligns the interests of physicians, providers, payers, employers and patients. If the collective parties continue to follow the existing model, the community will not see new or better results.

“Bringing key physicians and providers from throughout the region, with Kaleida Health and BlueCross Blue Shield of Western New York – two great organizations to our community – will improve the quality of care, the coordination of care needed, and will enhance the health of our community,” said James R. Kaskie, president and CEO of Kaleida Health. “The partnership will allow us to offer Western New York a new approach to health care that creates significant value for physicians, their patients and the region’s employers.”

“We are creating a new model designed to provide our customers – the region’s public and private-sector employers – an option that delivers higher quality health care at a significantly reduced cost,” said Alphonso O’Neil-White, president and CEO of BlueCross BlueShield of Western New York. “We believe this physician-centered, Kaleida-based health plan provides employers and consumers a new value and quality driven choice.”

Kaleida Health and BlueCross officials are assisting a physician leadership council to develop a strong clinically integrated physician network. The regional network will also include, as active participants, Erie County Medical Center (ECMC) and Roswell Park Cancer Institute (RPCI), Olean General Hospital (OGH), and the Center for Hospice and Palliative Care, along with their affiliated physicians.

BlueCross BlueShield of WNY will continue to offer a wide variety of other health plans that include more typical member/employer choice of providers, facilities and health systems.

Kaleida Health and its partners like ECMC will continue to accept a variety of health insurance plans at their facilities. However, both entities are strongly committed to this new partnership.

The two Western New York-based health companies have both made significant investments in the region, are recognized key employers, contributing corporate citizens, and are mutually and passionately committed to improving the health of the region.

Consumers who participate in this health plan will have access to the comprehensive Kaleida-based system including its brand new Gates Vascular Institute, Buffalo General Medical Center, Women & Children’s Hospital of Buffalo, Millard Fillmore Suburban Hospital, DeGraff Memorial Hospital, the Visiting Nursing Association, plus other Kaleida Health partners across Western New York.

Collectively, Kaleida Health and BCBS serve a significant portion of the region's healthcare needs both clinically and as the insurance company for over 600,000 members across Western New York.

Kaleida Health and BlueCross BlueShield of Western New York have signed a Memorandum of Understanding so that they can support the development of the clinically integrated physician network and jointly promote a health plan to the region’s self-insured employer groups.

Interested physicians can contact any member of the Physician Leadership Council, Don Boyd at Kaleida Health, (716) 859-8829, or Meri Notaro at BlueCross BlueShield, (716)887-7015.

Employers, brokers, or benefit consultants who are interested in this self-insured product, which is expected to be available for a January 1, 2013, start date, can contact Margaret Anderson at (716) 887-8513 or visit

View the Fact Sheet and Frequently Asked Questions - pdf

About BlueCross BlueShield of Western New York:
BlueCross BlueShield of Western New York is a division of HealthNow New York Inc., one of New York’s leading healthcare companies that provide access to quality health care and solutions for members throughout Upstate New York. Since 1936, BlueCross BlueShield has helped millions of people gain access to health care. Today, we offer a full range of insured, self-insured, and government programs and services covering businesses, families, and individuals, as well as life and disability coverage, dental and vision plans and stop-loss coverage. The company contributes significantly to organizations that promote physical health, community health and our region’s health, and BlueCross BlueShield employees also raise and donate several hundred thousand dollars each year. Headquartered in Buffalo, NY, the company is an independent Licensee of the BlueCross BlueShield Association.