The rate of increase of health care costs was less over eight years for beneficiaries enrolled in a value-based program in which participating physicians took on two-sided risk, compared with a control group seen by providers with traditional contracts, according to a study published in the New England Journal of Medicine. In addition, those beneficiaries saw better quality of care.
Harvard Medical School researchers compared spending and quality of care of Blue Cross Blue Shield of Massachusetts (BCBSM) members in the plan’s Alternative Quality Contract (AQC) with a control group of people in an HMO or a point-of-service plan. The average annual spending for AQC members was $461 lower per enrollee than in the control group from 2009 to 2016, representing an 11.7% savings on claims.
Alternative Quality Contract beneficiaries fared the best.
Andrew Dreyfus, BCBSM’s president and CEO, has staked his reputation on the AQC effort. In a July 24 opinion piece in Stat, Dreyfus pointed out that public and private payers are experimenting with value-based care models left and right, but there’s still some skepticism about how well they work in the long run. “Prior studies showed promising results, but there was not rigorous proof of sustained improvement in care and lower cost over time. Now there is,” he wrote.
The percentage of AQC enrollees getting quality care improved from an average of 81% to 88% from 2009 to 2016, while the national average stayed the same at 79%. The study looked at two types of quality measures—process and outcomes. An example of each for diabetes: Process is whether someone with diabetes gets his blood sugar tested regularly, while outcome is whether the blood sugar is in the recommended range. Although it was tweaked along the way, AQC’s main features didn’t change. Providers receive shared savings if their spending was below a risk-adjusted budget and shared losses with BCBSM if the budget was exceeded.
In the early years after the beneficiaries enrolled in the AQC, the savings were generated mainly by referring patients to providers that charged less. Later on, they came from lower utilization, including fewer lab and imaging tests and emergency department visits.
For the quality analysis, researchers used HEDIS to look at three areas of process measures: chronic disease management, adult preventive care, and pediatric care. For the spending analysis, they looked at spending at the site of care (inpatient or outpatient) and the claim type (facility or professional).
In his Stat piece, Dreyfus wrote of the ingredients of the AQC’s success, including efforts to discourage cherry picking and to distribute data often so physicians know how they are doing on quality and patient satisfaction measures. “The positive, long-term results of the Alternative Quality Contract model will signal to other payers—public and private, in red and blue states—that they should continue on this path,” he concluded.