ACOs: How Is All This Working in Massachusetts?

One of a series of reports on the October 21 MMS forum, “Toward a Shared Vision of Payment Reform.”

After rundowns on reforms in Pennsylvania, California, and Vermont, the spotlight at the October 21 payment reform conference turned to Massachusetts. The three afternoon presentations that described Bay State success stories all reiterated that payment reform is really a means to the end of delivery improvements.

Dana Safran, Sc.D., senior VP at Blue Cross Blue Shield of Massachusetts, explained how the health plan’s Alternative Quality Contract (AQC) works. She emphasized that AQC incentives are based on three types of measurement– process, outcome, and patient experience, with outcome measures weighted more heavily than process measures. Safran noted that providers in the AQC “class of 2009” exhibited rates of improvement that far exceeded their historical pre-AQC rates of improvement. Safran credited those improvements not only to properly-aligned incentives, “but also to [provider] leadership acting on those incentives.”

Safran also described a variation-analysis exercise similar to the one used by Sutter (see “Van Duren: Doctor-Led, Data-Driven Variation Reduction”) that engages physicians in conversations about cost and outcome implications of clinical decisions.

When asked by an attendee why the five-year AQC contracts build in adjustments based on the consumer price index rather than the typically higher medical inflation rate, Safran said, “We made a conscious decision not to tie it to medical inflation. It’s a way of not accepting the status quo, achieving sustainability, and building in extra accountability for providers.”

Addressing another question about the appropriate role of health plans in patient education, Safran said, “Plans have an important role to play there. Patients are one key to slowing spending growth, and we have to help them understand that, despite what they see on TV or in magazines, more is often not better when it comes to health care.”

Describing Atrius Health as “an ACO without hospital ownership,” Gene Lindsey, M.D., the president and CEO of the 800-physician multispecialty group, reiterated the main theme of the conference when he said, “The answer is not in the money or the payment; it’s in how health care delivery is organized.”

An advocate of “lean” systems, Dr. Lindsey emphasized the importance of enhancing value for stakeholders while at the same time eliminating waste and duplication in health care delivery. At Atrius, leanness requires well-functioning clinical teams and processes that ensure patients get the “right care in the right place.” Atrius, a participant in the Blue Cross Alternative Quality Contract and a pioneer of innovations such as shared medical appointments, is now focused on establishing medical-home concepts in each of its five practice groups.

Dr. Lindsey said the next big step in addressing the root causes of waste in the health care system will require “high–level collaboration between ‘warring camps.’”  In Dr. Lindsey’s opinion, in coming years more people once covered under employer-sponsored insurance will enter state- and federally subsidized programs, which will put downward pressure on prices. If that happens, he said, ACOs will multiply “by necessity, as doctors and hospitals come together to manage financial risk…So we should all learn NOW to eliminate waste and improve quality,” he said.

Barbara Spivak, M.D., president of the Mt. Auburn Cambridge Independent Practice Association, said her IPA’s success derives from the fact that “we focus on quality, and the efficiencies follow.”

Dr. Spivak stressed that the IPA and Mt. Auburn Hospital “share the same goals, even though none of the IPA members are employed by the hospital.” Although the hospital and IPA remain separate entities, “we partner with Mt. Auburn in everything – even our approach to contracting with health plans,” said Dr. Spivak. “Getting to an agreement that leaves the payer, the hospitals, and the physicians feeling positive requires trust all around,” she said.

Dr. Spivak also emphasized the widespread involvement of IPA members in the governance of the physician group and the importance of monthly meetings with primary care physicians, who are reimbursed for attending such meetings.

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