BCBSMA and Partners HealthCare sign new global payment deal
BOSTON – Partners HealthCare, a nine-hospital health system with 1,800 primary care physicians and more than 6,000 specialists, has agreed to join Blue Cross Blue Shield of Massachusetts' Alternative Quality Contract (AQC) global payment model beginning Jan. 1, 2012.
The new contract, which replaced one that was set to expire at the end of 2012 will affect roughly 200,000 BCBSMA members, and provides savings of $80 million in 2012 and $240 million over the life of the contract.
"The AQC is a wonderful example of shared responsibility, because it actually creates responsibility on the part of us, the plan, on the part of providers and on the part of our members," said Dana Safran, senior vice president for performance measurement and improvement with BCBSMA. "So the provider in the AQC has the very new responsibility for quality, outcomes and cost – managing to a budget."
The AQC, launched in 2009, is a shared savings, shared risk payment model that pays providers a fixed per-patient payment combined with significant payment incentives tied to the so-called "triple aim" of improving the quality, effectiveness and patient experience of the care they receive.
Partners HealthCare is the largest provider yet to participate in the AQC. The announcement comes as Partners is in the beginning stages of what it calls "A Case for Change," an internal program that aims to save more than $300 million – or about 5 percent – in total costs over the next three years.
According to Rich Copp, Partners HealthCare's spokesperson, the provider will look to find its savings by eliminating inefficiencies in overhead and direct patient expenses and by redesigning its care programs for several high-cost conditions, including colon cancer, diabetes, stroke and coronary disease (heart attack and bypass surgery).
"About a year ago, Partners' CEO Gary Gottlieb launched an effort across the Partners system to do two key things: One is to redesign the way that care is delivered and, two, make that care more affordable," Copp said."Partners believes the growth in healthcare costs is unsustainable. This agreement with Blue Cross is aligned with our thinking."
The AQC has proven to be an effective model for reducing medical spending. A July 2011 article published in the New England Journal of Medicine showed that the program was slowing cost growth, with spending 2 percent lower for AQC providers than their peers in the traditional fee-for-service model and even greater – 6 percent – for providers new to a global payment model.
While the early results are encouraging, the AQC is still in its infancy. "The AQC system was associated with a modest slowing of spending growth and improved quality of care in 2009. Savings were achieved through changes in referral patterns rather than through changes in utilization," the NEJM study authors concluded. "The long-term effect of the AQC system on spending growth depends on future budget targets and providers' ability to further improve efficiencies in practice."
For more information on reimbursement, see bit.ly/hfn-reimbursement.