At Blue Cross Blue Shield of Massachusetts, we are proud to be a national innovator in transforming the health care payment system. Under our Alternative Quality Contract, we reward doctors and hospitals for delivering high-quality patient care and for helping keep our members healthy. In 2019, our model’s long-term, sustainable success was documented in a landmark New England Journal of Medicine study by Harvard Medical School researchers. The success of our model indicates that accelerated, nationwide adoption of the AQC holds the potential for significant savings for Americans, as well as significant improvements in the quality of health care.
How the model works
The AQC is one of the country’s largest, longest-running private payment reform initiatives. It was developed through collaboration with clinicians in our state. In 2009, we introduced Massachusetts physicians to an alternative to the long-standing, traditional practice of fee-for-service payment. Many told us they would welcome a new model, one that would reward them for doing what was best for their patients, not what was most costly. Under the AQC model we developed together, physicians receive a “global” budget rather than payment for each test and office visit. The system emphasizes preventative care to keep patients healthy, and gives clinicians flexibility to innovate in patient care – for example, by making social services, behavioral health care and home care available to those who need it. Today, more than 80% of Massachusetts physicians and hospitals take part in the AQC model. We have made it available to public and private plans nationwide. Hundreds of “accountable care organizations,” with millions of patients, are tying payments to quality of care, improved patient outcomes, and better use of resources. The model has been adopted or explored in almost every state in the U.S.
2019 Harvard Medical School study
The New England Journal of Medicine study shows the AQC improved the quality of patient care and constrained costs over the course of eight years after its implementation in 2009.
The Harvard Medical School researchers found the AQC slowed the rate of health care spending growth by nearly 12% and improved patient care across several measures compared to New England and national averages, including pediatric care, adult preventative care, hypertension control, and diabetes control, while reducing unnecessary imaging and emergency room visits.
“The study suggests that the AQC has helped motivate changes in the delivery of care over its first 8 years,” said Zirui Song, MD, PhD, assistant professor of health care policy and medicine at Harvard Medical School and Massachusetts General Hospital, and the study’s leading researcher. “It 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.”
The study was the most rigorous, longest-running of its kind. But it supported the results of previous research: A 2017 study published in Health Affairs showed the AQC improved the quality of care for all populations, with the greatest gains for patients from disadvantaged backgrounds, demonstrating its potential to narrow health disparities.
And a 2015 paper published in Avalere cited multiple peer-reviewed studies demonstrating the model can reduce spending growth while improving quality of care. That report encouraged health care leaders and policymakers nationwide to explore payment reform.
What’s next for alternative payment models?
Because we are a local not-for-profit, we work with physicians and hospitals in our state to improve the health of our communities. We share a commitment to affordable, high-quality care for all our state’s residents and we continually work together to improve the AQC and to introduce new alternative payment models.
In 2019, we announced a seven-year agreement with Atrius Health, the largest independent medical group in Massachusetts. Together, we are aligning around an advanced alternative payment model to co-create a new kind of health care experience that's simpler, easier to navigate, higher-quality, and more affordable.
In 2018, we introduced a new value-based contract for small medical practices. The contract allows medical groups with as few as 1,500 Blue Cross patients to earn rewards for delivering high-quality, affordable care. Firefly, a Wellesley primary care practice, became the first small medical practice in the state to take advantage of the new contract. Click here to learn more about this innovative expansion of the AQC.
Also in 2018, we launched a first-of-its-kind pilot program with South Shore Health System that moves private health plan reimbursement for hospitals away from the volume of care they provide patients to the value of care they provide. This program is an important complement to the AQC arrangement we have with most physicians in our state. Under the program, the financial reward system for South Shore is tied to its success in working with physician groups in the system’s immediate geographic area — even those affiliated with different hospitals — to provide high-quality, cost-effective care, making the hospital a steward of care in its community.