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BCBSMA Chief: 'Controlling Costs and Simultaneously Improving Care is Possible'

Analysis  |  By Alexandra Wilson Pecci  
   July 17, 2019

Blue Cross Blue Shield of Massachusetts' alternative payment model slowed the rate of medical spending growth and improved patient care.

An alternative payment model based on clinical quality, patient outcomes, and overall resource use resulted in significant cost savings and improved patient care, finds a new Harvard Medical School study.

The research, published in the New England Journal of Medicine, shows that over the course of eight years, Blue Cross Blue Shield of Massachusetts' Alternative Quality Contract (AQC) slowed the rate of medical spending growth by up to 12% while also improving patient care.

"For years, the industry thought that controlling costs would hurt quality," Andrew Dreyfus, president and CEO of Blue Cross Blue Shield of Massachusetts, told HealthLeaders via email. "The AQC is one of the most rigorously evaluated payment reform models in the nation and this new study from Harvard Medical school provides strong evidence that controlling costs and simultaneously improving care is possible."

BCBS of Massachusetts launched the AQC in 2009. Physicians and hospitals that adopt the AQC agree to take responsibility for the full continuum of care their patients receive, regardless of where the care is provided.

"With the AQC, our goal was to fundamentally change the health care system so we could reward quality and outcomes on a scale that had never been done before," Dreyfus said.

Today, more than 80% of the physicians and hospitals in the Blue Cross network participate in the AQC.

The new NEJM study compared patients covered under the AQC to comparable populations within a traditional fee-for-service model. The study period spanned eight years, from 2009 through 2016.

The research found that for the original 2009 AQC physician groups, savings accelerated over time, and the average annual claims by patients with these doctors were $461 less than those of the control group, for an average claims savings of 11.7% per patient.

Physician practices that entered the AQC in later years experienced smaller or comparable savings on claims.

The study also found that the AQC improved the quality of patient care across several measures compared to New England and national averages, including those managing chronic conditions like diabetes and high blood pressure.

The AQC, "has helped change the rates that physicians order tests and some imaging modalities, the rates of emergency department admissions, and the management of chronic conditions, as demonstrated through several aspects of care quality compared to regional and national averages over this time period," Zirui Song, MD, PhD, assistant professor of healthcare policy and medicine at Harvard Medical School and Massachusetts General Hospital, and the study’s leading researcher, said in a statement.

Combined with earlier evaluations of the AQC, the researchers also found that savings on claims, which were initially smaller than incentive payments to the provider groups during the early years of the AQC, began to exceed incentive payments to generate net savings starting at around year four.

Moreover, the AQC was associated with an improved quality of care in a fairly sustained way, starting as early as the first year of the payment model through the eight-year study period.

The AQC is one the largest and longest-running private payment innovations in the country, Blue Cross Blue Shield of Massachusetts reports. Despite the program's success, Dreyfus says there's still a lot of work to do around larger healthcare issues like confusion, complexity, and physician burnout.

"We need to create a simpler, more supportive experience for both patients and physicians," he said. "That still eludes us as an industry, and it's the target of the next generation of our work here at BCBSMA."

Among the initiatives he outlined are:

  • Working with "provider partners to use enhanced analytics to gain insights and predict outcomes"
  • "Designing additional payment models to deepen engagement from hospitals and smaller physician practices"
  • "Innovating advancements in quality measurements based on patient-reported outcomes"

"We're working to create a new kind of health care experience that puts the consumer at the center—a system that's less fragmented, easier to navigate, higher quality, and more affordable," he said.

Alexandra Wilson Pecci is an editor for HealthLeaders.

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