Presentation for mHealth Israel by Dr Dana Safran, SVP, Performance Measurement and Improvement at Blue Cross Blue Shield of Massachusetts, about "Payment Reform Successes and Challenges", with an emphasis on lessons learned from their Alternative Quality Contract (AQC)

1. Payment Reform Successes & Challenges Lessons Learned from the Alternative Quality Contract (AQC)
Dana Gelb Safran, Sc.D.
Senior Vice President,
Performance Measurement & Improvement
Presented at:
mHealth Israel
25 November 2014

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Blue Cross Blue Shield of Massachusetts
Payment Reform: The Economic Imperative

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Blue Cross Blue Shield of Massachusetts
Average spending on health per capita ($US PPP)
Total expenditures on health as percent of GDP
Source: OECD Health Data 2011 (Nov. 2011).
Economic Imperative in a Global Economy

4. Blue Cross Blue Shield of Massachusetts Proprietary and Confidential – Do Not Distribute without Permission 4
The Increasing Cost of Health Care in MA
Compared to Other Public Spending Priorities
Billions of Dollars
Source: Massachusetts Budget and Policy Center

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Blue Cross Blue Shield of Massachusetts
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).
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.
8.2%
15.9%
13.8%
13.1%
12.1%
13.3%
12.8%
12.5%
10.8%
10.7%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
BCBSMA Medical Trend
Workers' Earnings
General Economic Growth
Sources: BCBSMA, Bureau of Labor Statistics.

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Blue Cross Blue Shield of Massachusetts
A Case Study: AQC Model & Early Results

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Blue Cross Blue Shield of Massachusetts
Global Budget
•Population-based budget covers full care continuum
•Health status adjusted
•Based on historical claims
•Shared risk (2-sided)
•Trend targets set at baseline for multi-year
Quality Incentives
•Ambulatory and hospital
•Significant earning potential
•Nationally accepted measures
•Continuum of performance targets for each measure (good to great)
Long-Term Contract
•5-year agreement
•Sustained partnership
•Supports ongoing investment and commitment to improvement
The Alternative Quality Contract

8. Blue Cross Blue Shield of Massachusetts 8
Results Under The AQC:
Improvement of the 2009 Cohort of AQC Groups from 2007-2012
Optimal Care
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.
83.1 84.0
86.0 86.7
80.4 81.1 80.8 81.0
77.7
79.6
79.2
80.3
2007 2012
BCBSMA HEDIS National Average
Adult Chronic
Care
Pediatric Care
91.3 91.6 92.2 92.1
69.7 70.7 71.6 71.7
88.2
89.9
68.1
69.5
2007 2012
BCBSMA HEDIS National Average
Adult Health
Outcomes
65.6
68.3
72.2
74.0
61.4 61.9 62.2 61.9
61.5 62.1
59.8
61.2
2007 2012
BCBSMA HEDIS National Average
100
50

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Blue Cross Blue Shield of Massachusetts
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.

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Blue Cross Blue Shield of Massachusetts
AQC Support & Improvement Analytics

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Blue Cross Blue Shield of Massachusetts
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
Best Practice Sharing and Collaboration
Consultative Support
Training and Educational Programming

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Blue Cross Blue Shield of Massachusetts
New AQC Provider Dashboard
The updated dashboard provides actionable data, gives providers tools to more actively manage the growth of medical trend and benchmarks them against other groups.

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Blue Cross Blue Shield of Massachusetts
Daily
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
Quarterly
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
Data and Actionable Reports
We distribute reports that can be used to help organizations recognize opportunities, develop goals and measure their success.

14. Blue Cross Blue Shield of Massachusetts 14
The results are
highly actionable
because they get to the
root of variations in
treatment costs for a
defined and highly-specific
clinical circumstance
among physicians of the
same specialty
Source: Greene RA, et al. Health Affairs 2008; w250-259
Practice Pattern Variation Analysis (PPVA)
Unpacking differences in the treatment components of specific episodes across clinicians in a
single, defined medical specialty.

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Blue Cross Blue Shield of Massachusetts
The 12 primary care physicians in this group have rates of ARB use ranging from 13% to 55%.
9 physicians have rates above the network average.
Benign Hypertension, With and Without Comorbidity
Individual Primary Care Physicians
Rate of ARB Use per 100 Episodes with ACE-I and/or ARB
2007
Rate = Episodes with ARB / Episodes with ACE-I and/or ARB
0
10
20
30
40
50
60
70
80
90
100
1
355
709
1063
1417
1771
2125
2479
2833
Individual Primary Care Physicians (N=3178)
Rate of ARB Use per 100 Episodes
with ACE-I and/or ARB
The 12 primary care physicians in this group have rates of ARB use ranging from 13% to 55%.
9 physicians have rates above the network average.

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Blue Cross Blue Shield of Massachusetts
Staffing Models
Approaches to Patient Engagement
Data Systems
& Health Information Technology
Referral Relationships & Integration Across Settings
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.

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Blue Cross Blue Shield of Massachusetts
Summary
Payment reform gives rise to significant delivery system reform
Rapid, substantial performance improvements are possible in the context of meaningful financial incentives; rigorously validated measures and methods; ongoing, timely data sharing and engagement; and committed leadership
For payment reform, deep provider relationships and significant market share are advantageous
Expanding payment reform to include PPO presents unique challenges
Gaining strong employer buy-in and support will be important – and this means models must offer value from day-1
Continued evolution of performance measures to fill priority gaps
Focus on outcomes, including patient reported outcomes (functional status, well being)
Continued delivery system reform, including:
Evolving the role of hospitals in the delivery system
Building deeper engagement of specialists
Bringing incentives (financial and non-financial) to the front lines
Advancing innovations in virtual care

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Blue Cross Blue Shield of Massachusetts
dana.safran@bcbsma.com
Discussion