Are value-based payment arrangements working to lower costs while maintaining or improving quality? Evidence has been hard to come by, in part because health plans and physicians are reluctant to make proprietary results public. That’s what makes a new study of a commercial value-based contract so important. 

In 2009, Blue Cross Blue Shield of Massachusetts launched an Alternative Quality Contract (AQC), a value-based payment model with providers across the state. Now, researchers have analyzed eight years of data from AQC enrollees and found spending was lower, and quality was higher than for a similar “control group” of health plan enrollees. The longer enrollees were covered by the AQC, the greater the relative savings. For the earliest cohorts, it added up to savings of almost 12%, suggesting that physician groups were more effective managing care the longer they were taking accountability for it. 

This is big news. Commercial insurers have been slower than Medicare to scale up from pilots to value-based contracts that reward physicians for “Triple Aim” results of better care for patients, better care for populations, with lower per capita cost trends. The AQC was more than a pilot. It covered hundreds of thousands of people enrolled in an HMO product, and looked at spending results and quality measures over eight years. 

The study, published in the July 2019 New England Journal of Medicine, also broke down the components of lower spending achieved by the medical groups under the AQC, finding that initially, lower prices or rates were responsible for lower spending as physicians made referrals to lower priced hospitals. In the later years of the eight year study period, lower spending relative to the comparison group was attributed to lower utilization through better care management. 

This latter finding is especially important to the precepts that guide the multi-specialty medical groups and health systems that are part of the Council of Accountable Physician Practices (CAPP). The ability to improve care management is directly tied to the presence of systems that coordinate care, technology that links the care team, and the use of the latest research to guide care decisions. 

A Value-Based Contract that Works for the Health Plan, Its Enrollees, and Physicians

Atrius Health, a multi-specialty group practice and member of CAPP, was one of the first providers to participate in the AQC. Earlier in 2019, Atrius and Blue Cross Blue Shield of Massachusetts announced that they were taking the AQC to the next level in a new seven-year agreement focused on further transforming care and the care experience. This continuation reflects a commitment to, and understanding of, the partnership and collaboration required for successful value-based care arrangements between health plan and physician group leaders.     

The two nonprofit organizations will develop more convenient ways for patients to access care and navigate the health care system, leverage innovative technologies, and simplify administration. Atrius will be responsible for a global budget for the care of 130,000 Blue Cross members who are enrolled in HMO, PPO, and Medicare plans.

“Blue Cross’s commitment to improving patient experience makes them an outstanding partner for this journey toward a more accessible and affordable high-quality health care system in Massachusetts,” said Steve Strongwater, MD, president & CEO of Atrius Health. “Their innovative approach to value-based payment goes hand in hand with our philosophy of finding new ways to better serve our patients, truly supporting our vision of transforming care to improve lives.”

Getting to Scale with Value-based Care

Blue Cross Blue Shield of Massachusetts has shown leadership not only by working with physician leaders to establish the Alternative Quality Contract, but also by sharing the data and allowing researchers to publish the findings. These impressive results, together with the duration and evolution of the Alternative Quality Contract with Atrius Health, should provide reassurance to the payers, employer purchasers, and physicians who are just embarking on the value journey together.

Graphic: Song Z, Ji Y, Safran DG, Chernew ME. Health care spending, utilization, and quality 8 years into global payment. New England Journal of Medicine.