Three Cheers for Value-Based Care!

New study outlines how well it worked for Blue Cross Blue Shield of Massachusetts.

Andrew Dreyfus, the president and CEO of Blue Cross Blue Shield of Massachusetts (BCBSM), can hardly contain his excitement in his opinion piece in Stat. Dreyfus cites a study last week in the New England Journal of Medicine that shows just how valuable value-based care can be for the health care system.

The study compares outcomes and spending among several hundred thousand BCBSM members in the plan’s value-based program called the Alternative Quality Contract with a control group of about a million privately insured enrollees from 2009 to 2016. The average annual spending for AQC members was $461 lower per enrollee than in the control group, representing an 11.7% relative savings on claims. Participating physicians took on two-sided risk; sharing in profits above benchmarks and, in some cases, the loses if benchmarks weren't met.

“The percentage of Blue Cross Blue Shield of Massachusetts members who met the clinical criteria for quality care for chronic disease management increased from an average of 75% before the initiation of the AQC to 85%, in stark contrast to the New England and national averages…,” writes Dreyfus. “Unnecessary emergency room visits dropped, as did unneeded imaging.”

He hopes the research will spur other value-based efforts nationwide. There are four basic ingredients for success, he says.

First, is forming the value-based partnership. “Under the AQC model that we developed with their insights, physicians receive a global budget for each member’s care, with incentives tied to quality improvement and savings,” Dreyfus writes. “To address concerns that this approach could provide clinicians with incentives to avoid sick patients or withhold necessary care, the AQC model shares financial risk, adjusts payments to reflect the health or illness of a physician’s patient population, and includes significant rewards for quality care."

Second, is providing the necessary information, such as “weekly, monthly, and yearly data reports and analytics, including how they’re doing on quality measures, how satisfied their patients are with their care, and where their greatest opportunities for improvement may be in areas ranging from prescriptions to cost trends to emergency department use.”

Third, find the physician leaders. “Success has been achieved by groups with inspirational leaders and physicians who are willing to change, stay passionately involved, and make a sustained commitment to the shared goal of better care and lower costs.”

Fourth, create a level of trust, something Dreyfus says BCBSM does by being a not-for-profit insurer deeply involved in improving the health of communities.

Dreyfus believes that “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.”