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The Alternative Quality Contract (AQC):
Improving Quality While Slowing Spending Growth
Dana Gelb Safran, ScD
Senior Vice President,
Performance Measurement and Improvement
Blue Cross Blue Shield of Massachusetts
Presented at:
Clingendael European Health Forum
25 March 2015
Agenda
 Context for AQC Development
 Overview of AQC Model
 AQC Results
 AQC Support and Improvement Analytics
 Summary and Discussion
Blue Cross Blue Shield of Massachusetts
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Context for AQC Development
Blue Cross Blue Shield of Massachusetts
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Economic Imperative in a Global Economy
Average spending on health
per capita ($US PPP)
Total expenditures on health
as percent of GDP
Source: OECD Health Data 2011 (Nov. 2011).
Blue Cross Blue Shield of Massachusetts
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The increasing cost of health care in MA
compared to other public spending priorities
STATE BUDGET, FY2001 VS. FY2014 (BILLIONS OF DOLLARS)
FY2001
+$5.4 B
(+37%)
FY2014
-$3.6 B
(-17%)
-12%
-11%
-13%
-14%
Health Coverage
(State Employees/GIC;
Medicaid/Health Reform)
-22%
-31%
Public
Health
Mental
Health
Education
Infrastructure/
Housing
-51%
Human
Services
Local
Aid
Public
Safety
Source: Health Policy Commission, 2013 Cost Trends Report, data from the Massachusetts Budget and Policy Center
Blue Cross Blue Shield of Massachusetts
Proprietary and Confidential – Do Not Distribute without Permission
5
The Alternative Quality Contract:
Twin goals of improving quality and slowing spending growth
In 2007, leaders at BCBSMA challenged the company to develop a new contract model that would
improve quality and outcomes while significantly slowing the rate of growth in health care spending.
18%
15,9%
16%
The Massachusetts health reform
law (2006) caused a bright light to
shine on the issue of unrelenting
double-digit increases in health
care spending growth (Health
Care Reform II).
13,3%
13,1%
14%
12,5%
13,8%
12%
10,7%
12,8%
12,1%
10%
10,8%
8%
8,2%
6%
4%
2%
0%
-2%
2000
2001
2002
BCBSMA Medical Trend
2003
2004
2005
Workers' Earnings
2006
2007
2008
2009
General Economic Growth
Sources: BCBSMA, Bureau of Labor Statistics.
Blue Cross Blue Shield of Massachusetts
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The AQC Model
Blue Cross Blue Shield of Massachusetts
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The Alternative Quality Contract
Global Budget
• Population-based budget
covers full care continuum
• Health status adjusted
Quality Incentives
• Based on historical claims
• Ambulatory and hospital
• Shared risk (2-sided)
• Significant earning potential
• Trend targets set at
baseline for multi-year
• Nationally accepted
measures
• Continuum of performance
targets for each measure
(good to great)
Blue Cross Blue Shield of Massachusetts
Long-Term Contract
• 5-year agreement
• Sustained partnership
• Supports ongoing
investment and commitment
to improvement
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AQC Results: The First Four Years
Blue Cross Blue Shield of Massachusetts
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AQC Physician Participation
(Current as of February 2015)
SCPs
PCPs
90% 16.000
6.000
5.547
5.000
5.664
5.136
4.592
4.000
14.000
14.067
12.000
14.777
12.986
11.731
10.000
8.000
3.000
2.000
1.000
93%
2.303
1.373
1.420
6.000
5.065
4.000
2.000
2.577
2.618
0
0
2009 2010 2011 2012 2013 2014 2015*
2009 2010 2011 2012 2013 2014 2015*
* All 2015 figures as of February
Blue Cross Blue Shield of Massachusetts
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Results Under The AQC:
Improvement of the 2009 Cohort of AQC Groups from 2007-2012
Adult Chronic
Care
Pediatric Care
Optimal Care
100
83.1
84.0
79.6 80.4
81.1
86.0
86.7
80.8
81.0
88.2
89.9
Adult Health
Outcomes
91.3
91.6
92.2
92.1
69.7
70.7
71.6
71.7
79.2 80.3
77.7
68.1
69.5
72.2
74.0
68.3
65.6
61.5
59.8
62.1
61.2
61.4
61.9
62.2
61.9
50
2007
2012
BCBSMA
HEDIS National Average
2007
2012
BCBSMA
HEDIS National Average
2007
2012
BCBSMA
HEDIS National Average
These graphs show that the AQC has accelerated progress toward optimal care since it began in 2009. The first two scores are based on the delivery of
evidence-based care to adults with chronic illness and to children, including appropriate tests, services, and preventive care. The third score reflects the
extent to which providers helped adults with serious chronic illness achieve optimal clinical outcomes. Linking provider payment to outcome measures has
been one of the AQC’s pioneering achievements.
Blue Cross Blue Shield of Massachusetts
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AQC Results: Formal Evaluation Findings
Source: Song Z, et al. Changes in Health Care Spending and Quality 4 Years into Global
Payment. The New England Journal of Medicine. 2014.
Blue Cross Blue Shield of Massachusetts
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Payment Reform: AQC Total Cost Trend
(Medical Claims + Incentives)
• The Harvard evaluation documented that AQC is
reducing medical spending, but accounts also want to
see reductions in total spending
• By Year-3, Blue Cross met its goal of cutting trend in half
(2 years ahead of plan)
10%
AQC Trend
• By Year-4, Blue Cross total cost trend was below state
general economic growth benchmark (<3.6%)
50%
Price
increases
MA State Benchmark (3.6%)
50%
Utilization
1.3%
50%
50%
50%
Blue Cross Blue Shield of Massachusetts
Performance-based
payment increases
Price increases
Utilization
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Five Keys Ingredients to AQC Success
1
2
3
Measures. The measures are
nationally accepted as clinically
appropriate so there is wide support for
improving performance on these
indicators.
4
Financial Incentives. Real dollars are
at stake for improvement.
Targets. For each measure, there is a
range of performance targets
representing a continuum from good
care to outstanding care, so the model
rewards both performance and
performance improvement.
Blue Cross Blue Shield of Massachusetts
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Data , Reports, Advice.
Dynamic/actionable data and reports
made available daily, monthly and
quarterly, helping organizations to
identify efficiency opportunities at a
patient, practice and organizational
level.
Leadership. Each group has
strong engaged leadership driving
to success on integrating care,
significantly improving quality and
reducing costs.
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AQC Support & Improvement Analytics
Blue Cross Blue Shield of Massachusetts
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Components of the AQC Support Model
Our four-pronged support model is designed to help provider groups succeed in the AQC.
Data and Actionable Reports
Consultative Support
Best Practice Sharing and Collaboration
Training and Educational Programming
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Data and Actionable Reports
We distribute reports that can be used to help organizations recognize opportunities,
develop goals and measure their success.
Daily
Quarterly
 Daily Census, Discharge, PCP Referrals and
Inpatient & Outpatient Authorization Reports




Weekly
 New Member Report
 ED Utilization Report
Monthly
 AQC Member Call Tracking Grid
 Monthly Ambulatory Quality Report
 Monthly AQC Ambulatory Quality Measures
Group Comparison Report
 Chronic Condition Opportunities Report
 Quality Diabetic Composite Score
Bi-Monthly
 Case Management Report
Ambulatory Care Sensitive Conditions Report
AQC Financial Dashboard
Non-Emergent ED Report
Top 100 Rx Report
Bi-Annually
 Practice Pattern Variation Report—Episode
Treatment Groups (ETG)
 Practice Pattern Variation Report—Emergency
Department Use for Specific Conditions
Annually
 Readmission Report
 AQC Ambulatory Quality Measures Score/Results
 AQC Hospital Quality Measures Score/Results
Recurring
 Cost and Use Report
 Site of Service Report
Blue Cross Blue Shield of Massachusetts
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Delivery System Innovation: Four Themes
There are four domains in which we see AQC Groups innovating to improve quality and
outcomes while reducing overall spending.
Blue Cross Blue Shield of Massachusetts
Staffing Models
Approaches to
Patient
Engagement
Data Systems
& Health
Information
Technology
Referral
Relationships &
Integration
Across Settings
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Summary and Priority Issues Ahead
Summary
 Payment reform gives rise to significant delivery
system reform
Priority Issues Ahead
 Expanding payment reform to include PPO
presents unique challenges

 Rapid and substantial performance improvements
are possible in the context of:




Meaningful financial incentives
Rigorously validated measures & methods
Ongoing and timely data sharing and engagement
Committed leadership
 Continued evolution of performance measures to
fill priority gaps

and significant market share are advantageous

For national payers, remote provider relationships pose
engagement challenges; member-facing incentives (benefit
design) an attractive lever
Blue Cross Blue Shield of Massachusetts
Focus on outcomes, including patient reported outcomes
(functional status, well being)
 Continued evolution of the delivery system:

 For payment reform, deep provider relationships
Gaining strong employer buy-in & support will be important;
and this means models must offer value from day-1


Evolving the role of hospitals in the delivery system
Building deeper engagement of specialists
Advancing innovations in virtual care
 Payment incentives to front line clinicians need
continued attention
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For More Information
[email protected]
Blue Cross Blue Shield of Massachusetts
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