With two-thirds of Massachusetts healthcare still paid via fee-for-service, the state's largest insurer wants to ply its HMO-grown variety of accountable care in PPOs. It's sure to challenge providers.
Blue Cross Blue Shield of Massachusetts has seen a fair amount of success in its Alternative Quality Contract global budget program since launching it in HMO plans in 2009, before the advent of the Affordable Care Act but at a time in Massachusetts when the healthcare cost crisis was still apparent.
The AQC program is a two-sided risk arrangement, with spending targets and shared savings and shared losses, as well as bonuses for quality and outcome metrics.
Hospitals and medical groups who spent four years serving BCBSMA members in AQC HMO plans had medical spend on average 6.8 percent percent lower than commercially insured patients covered under fee-for-service in eight states, according to a recent New England Journal of Medicine analysis. Average per-member spending in BCBSMA's AQG plans was on average $62 lower than others, and quality was just as good if not better.
"Improvements in quality among AQC cohorts generally exceeded those seen elsewhere in New England and nationally," the study concluded, and the incentive payments to providers have paid off for BCBSMA. "Claims savings were exceeded by incentive payments to providers during the period from 2009 through 2011 but exceeded incentive payments in 2012, generating net savings."
Those AQC plans include about 85 percent of BCBSMA's HMO network and cover about 680,000 members. Now, with more pressure than ever from state regulators and national efforts to use any kind of reimbursement other than FFS, BCBSMA is taking the strategy to its PPO plans.
The insurers is reaching out to physicians and hospitals--many of them already participating in the HMO AQC program--and asking them to adopt contracts for PPO patients.
"This rigorous evaluation of four years of data demonstrates that the AQC is achieving its twin goals of lower costs and better care for our members," said Andrew Dreyfus, President and CEO of BCBSMA, last fall.
Whether the PPO model, with more provide choice for members, will make global budgeting more difficult for physicians and hospitals more difficult remains to be seen. But Massachusetts' notoriety as one of most expensive healthcare markets in the country--one that employers and patients know personally--may be one driving impetus to give it a try. (BCBSMA, which has a roughly 40 percent market share in the state, is a member of the Health Care Transformation Task Force, along with Partners HealthCare and many other national and regional healthcare institutions.)
"One of the pioneering features of the AQC" so far has been "providers' willingness to accept accountability for the outcomes of care, and not just for the quality of what occurs," said Dana Safran, BCBSMA's senior vice president for performance and improvement.
"To be successful in managing outcomes, providers have to engage differently with patients and understand the things in their day-to-day lives that could get in the way of successfully managing their diabetes, hypertension or heart disease, and help patients develop ways to overcome those barriers. The results led to remarkable gains for individual patients and in population health--with thousands of patients with serious chronic illness now under good control, thereby avoiding the terrible and even deadly consequences that can occur when these conditions are not well controlled."