BCBSMA shares recipe for global payments success


After only one year of implementation, Blue Cross Blue Shield of Massachusetts found success with its version of a global payment system. Its alternative quality contract (AQC) produced modest savings and improved quality of care--doctors participating in the program saved an average of $62 per patient, FierceHealthPayer previously reported.

With roughly five years of experience, FierceHealthPayer spoke with BCBSMA Senior Vice President of Performance Measurement and Improvement Dana Gelb Safran (pictured), Sc.D., to find out how the insurer continues to use global payments to cut medical costs and improve patient care.

FierceHealthPayer: What are the goals of BCBSMA's AQC, and how did this model come about?

Dana Gelb Safran: Back in 2009, when we introduced the payment reform model, we all wondered, 'why does healthcare increase so much faster than everything else we buy?' At the time, medical claims spending totaled $13 billion a year. At BCBSMA, we wanted to get more for what we buy, which meant figuring out how to slow the growth rate of that $13 billion. Ultimately our goals are to reduce healthcare spending growth while improving quality and health outcomes.

FHP: How is the AQC global budget different from traditional models?

Safran: A traditional contract model provides incentivized payments, meaning, it's based on each individual service--the more complexities, the more payments. The AQC global budget is based on the historical rate of spending on that provider's population. This is different because in the past, models have either said here is a reasonable budget, based on network average, and here's what should be spent.

So before a contract with a provider starts, we look back on spending from the past 15 to 18 months to determine their starting budget. The contracts are five years, and over that period, we risk-adjust the budget so if the population changes, the budget can be adjusted accordingly. This starting baseline assures that every dollar used goes toward improving quality and outcome and does not lead to overspending.

FHP: How does BCBSMA handle risks on both sides of the equation?

Safran: It's important we are not looking to transfer insurance risks to providers or turn providers into the ones that have all the risk, which is why the AQC is a shared-risk model. We build in protection for the provider so no excessive spending occurs. We engage the provider in the clinical risk and not the insurance risk. They're looking to define what is appropriate care. When it comes to risks, our model is symmetrical--it shares in savings as well as shares in deficits.

FHP: How is the AQC cutting costs and improving patient care?

Safran: As providers become more aware of differences in pricing--labs, imaging and procedures, for example--they begin to say, 'there is a way to achieve savings on my budget, to move care to less expensive settings.' We're seeing groups both transform and provide better care to patients, so much so that hospital admissions becomes unnecessary because urgent care is more accessible.

We work with providers to change things like their staffing model. They'll now hire employees who help patients between visits and who check in on medication supply. The model really aims to provide patients with care outside the walls of an office visit. We like to think of it as a concierge business. For the system, it's helping to knit the fabric of healthcare.

FHP: How has BCBSMA's AQC helped pave the way for accountable care organizations?

Safran: Back when the Centers for Medicare and Medicaid began developing its ACO program, it's like we were on speed dial. From the start, CMS was very interested in understanding how our model works. The broad features of the Pioneer ACO, like the two-sided risk sharing, echoes our model.

For some other payers, it's more difficult to establish this kind of program. At BCBSMA we have on-the-ground relationships with our providers and have a support model to ensure their success. Five of the original 32 Pioneer ACOs are participating in our AQC groups--it's given them confidence to start building their own infrastructure.

Editor's Note: This interview has been edited and condensed for clarity.