The term collaborative isn't often used to describe the provider-payer relationship, and the quality and patient safety arena traditionally has been no exception. But if some fledgling initiatives deliver results on the quality improvement front, that dynamic could be changing.
Blue Cross Blue Shield of Massachusetts has signed four provider organizations to its "Alternative Quality Contract," a five-year pact that offers significant payment incentives tied to a long list of quality measures. The providers include two hospitals—Mount Auburn Hospital in Cambridge, MA, and Tufts Medical Center in Boston—and two physician groups—Mount Auburn's affiliated physician group Mount Auburn Cambridge Independent Practice Association, and Hampden County Physician Associates in Springfield, MA.
"We view the contract as one more step in the direction of aligning payers and providers in a way that helps the patient," says Susan Abookire, MD, MPH, chair of the department of quality and patient safety at Mount Auburn, a 203-staffed-bed teaching hospital affiliated with Harvard University Medical School. "Traditionally we've seen some pay-for-performance arrangements that added small quality bonuses, but this is a dramatic shift to align the bulk of payment with quality."
The AQC marks a new twist on an old reimbursement model: capitation. Under the contract, providers receive a fixed per-patient payment adjusted for health status and inflation, rather than a fee-for-service arrangement. Additionally, providers can increase their total payment by up to 10% by hitting inpatient and ambulatory performance targets tied to a set of process, outcomes, and patient experience measures.
But does the contract genuinely differ from capitation? A November 2008 BCBSMA white paper offers three reasons why it does:
- Coupling the fixed payment with performance measures helps safe-guard against undertreatment.
- The fixed payment budget is both based on actual costs that consider the relative morbidity of patients and adjusted for inflation annually.
- Because the AQC includes a global payment for all services received by a BCBSMA member, costs are lowered and care is improved when a physician spends extra time with a patient that helps avoid unnecessary hospitalization.
"For organizations that choose the AQC, the global budgets are built on historical claims trends and costs, including any existing patterns of patients receiving care from outside specialists," says John Fallon, MD, chief physician executive at BCBSMA.
Abookire says the AQC is actually "inclusive of the capitation model," but the amount of reimbursement tied to quality makes it unique. "If you were in a fully capitated model, in theory you could be incentivized to give less care. With fee for service, you're incentivized to give more care. But what you really want to do is give the right amount of care."
School days
Beyond the notion of offering caregivers increased payment incentives, BCBSMA and provider organizations have also been addressing the issue of quality and patient safety through another avenue: hospital board education. At the end of 2007, BCBSMA launched a trustee education program aimed at encouraging trustees to embrace their roles as quality champions.
BCBSMA approached the Massachusetts Hospital Association to partner on the project after deciding that "individual boardrooms might not be as receptive," Shonkoff says. Nevertheless, BCBSMA did encounter resistance; some hospital leaders "took the posture that they were far along in this work and that the course would be too elementary," she says.
But that initial skepticism has "pretty much dissipated," Shonkoff says. The curriculum involves a six-hour course in a retreat setting and focuses on six areas—mission, strategy, culture, performance, leadership, and resource allocation. The program aims to spark the creation of hospital quality improvement plans to eliminate performance gaps. Boards also have a financial incentive to create such plans; hospitals can earn additional money if they adopt quality improvement plans that address a certain number of quality gaps, she says.
Twenty-five hospitals have completed the course, Shonkoff says. Additionally, BCBSMA in February launched the Trustee Advantage program, which awards five $50,000 grants to hospital boards (matched by $25,000 from each hospital) to engage a quality and governance "coach" to assist with improvement efforts.
Obstacles to overcome
Creating a provider-payer collaboration to improve quality is not without hurdles, however. Payers must align initiatives with what providers believe is genuinely important. BCBSMA enlisted input from multiple provider organizations to help craft the trustee curriculum, Shonkoff says. "We had an advisory session with hospital leaders, and they said they wanted to learn more about best practices and have individual coaching." For providers, the ubiquitous theme of physician support certainly applies to quality collaborations, Abookire says. But another important consideration for hospital leaders considering an initiative like the Alternative Quality Contract is their willingness to put their financial welfare in their own hands.
"Organizations without the existing infrastructure to achieve the quality goals would be at risk," Abookire says. "An organization needs to work collaboratively with its physician group, because we're at risk together. Sharing the risk in the Alternative Quality Contract can develop that relationship, because everyone has the same goal. That may be a novel concept for some hospitals."
Financial risk and alignment aside, some measure of momentum on both sides of the reimbursement equation appears to be building for providers and payers to work together more closely. "E-prescribing, computerized physician order entry, and patient safety studies are all initiatives that put into practice a system that will deliver the right care at the right time. In order for these programs to be successful, all partners need to work together," Fallon says.
Creating significant quality partnerships may come down to changing a longstanding provider-payer dynamic, Abookire says. "The dynamic traditionally does pit one against the other, because if the dynamic is only about money, the dynamic almost by definition is a win-lose," she says. "I think there are many folks endeavoring to align incentives around quality, but [the AQC] takes it to another level. Is it a harbinger of things to come? I'm an optimist—if we do it well, it could change the dynamic so that everybody wins."
—Jay Moore