Alternative Quality Contract

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Mass. Study: Savings ‘Spillover’ From Blue Cross Global Plan

(401(K) 2012/flickr)

(401(K) 2012/flickr)

Health wonk alert: If you can define an ACO (Accountable Care Organization) and know a little bit about the AQC (a pioneering global payment experiment by Blue Cross Blue Shield of Massachusetts), then read on.

There’s evidence from a study just out in JAMA that when doctors change the way they care for one group of patients (as with the AQC), there is a spillover benefit for other patients (in this case, Medicare).

Dr. Michael McWilliams says doctors who were part of the AQC, but weren’t being paid through a global budget for their Medicare patients, still cut Medicare spending by 3.4%.

He says the savings “would suggest that providers aren’t just targeting changing, but are changing their processes of care in a more systemic way such that the value of care they deliver to all patients is higher.”

That claim is harder to prove if you look at the quality of care Medicare members received as compared to patients in the Blue Cross ACQ.  McWilliams found some spillover to quality improvements.  Doctors provided fewer unnecessary MRIs for back pain and more consistent cholesterol testing.  But other “quality measures” such as reducing readmissions or preventable hospitalizations did not migrate from Blue Cross to Medicare members.

In Massachusetts, these findings may not have much practical effect for patients.  Most residents on Medicare have moved into one of the Pioneer ACOs, where doctors have incentives to spend money more wisely and boost preventive care. But it’s an interesting finding given that a lot of doctors talk about feeling ‘”schizophrenic” when they have to manage some patients who are on global budgets and others who are not, who are still fee for service.

For the nation, McWilliams says the findings show that contracts like the AQC have the “potential to foster systemic changes in care delivery.” From the press release on the study: Continue reading

Children’s Hospital Signs On To Global Payment Strategy

Sandra Fenwick, President and COO, Children's Hospital Boston

Children’s Hospital Boston has a new three year deal with Blue Cross Blue Shield that holds rates flat this year.  In the second and third years, Blue Cross says the increases will be less than general inflation, which has been around 2%.

Children’s President and COO Sandra Fenwick says the savings, as compared to previous increases, will be $83 million.  That amount, Fenwick says is in addition to money Children’s shaved off contracts in 2009 and 2010 for a the total of $155 million.  Is that enough over five years? Weigh in below.

Beyond the savings, Fenwick says this contract is a milestone because it moves Children’s into the Blue Cross Blue Shield global payment plan (the Alternative Quality Contract/AQC).  “We’re going to be taking risk for managing the care of our patients,” says Fenwick, “we’re going to be held accountable for the quality, and it really is in line with policy changes that the whole country is going to be watching.”

Blue Cross CEO Andrew Dreyfus also calls this contract a milestone, but for a different reason.  Dreyfus recalls sitting in meetings several years ago about moving to global payments and hearing “a lot of skepticism about whether global payments could work in a specialty hospital like Children’s. I think we’re answering the question that it can work in a way that both improves quality and lowers cost.”

For more on how Fenwick sees the deal, here’s a condensed version of our interview: Continue reading

More Scrutiny Of Accountable Care Organizations

Deep scrutiny and analysis of so-called Accountable Care Organizations, or ACO’s, continues with a new report in the current issue of Health Affairs.    It looks at how medical groups are responding to Blue Cross Blue Shield of Massachusetts’ version of this latest iteration of care delivery, which hinges on global payments and financial incentives for doctors to keep their patients healthy.

The report, by researchers led by Robert Mechanic, a senior fellow at the Heller School of Social Policy and Management at Brandeis University, focuses on the medical groups that are signed on to Blue Cross’s Alternative Quality Contracts. The findings underscore that changes are indeed underway.

For instance, the study finds that medical groups have introduced new information systems and processes to help primary care doctors improve their performance quality scores, and they’re implementing new referral services to steer patients toward lower-cost care when appropriate.

But the report also highlights some challenges, including one which seems pretty darned significant: When you keep people healthy and out of the hospital, you save money. However, you also cut in to hospital profits. Here’s how they put it in the report: Continue reading