Alternative quality contract with Blue Cross Blue Shield of Massachusetts: A model for ACOs?

Managed Care Magazine recently ran a story on the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC), which serves as a model for the ACO program under the Affordable Care Act. Check it out: Bay State Blues Combine Global Payment With Quality Metrics. The author of the piece, Joe Burns, contacted me as well as others in Massachusetts for comment.

My take, drawn from the story:

David Harlow, a health care lawyer in Newton who writes the HealthBlawg, agrees [that the early findings are encouraging], calling the AQC a significant development for two reasons. First, it is an alternative to fee for service.

"That's appropriate because there is a need to change the incentives of health care providers in the system," he adds. Second, the AQC is important because it has served as a model for the federal Centers for Medicare & Medicaid Services' accountable care organizations.

"The problem with past attempts to control health care spending is that adequate quality standards were not in place," Harlow says. "It was all about keeping costs down. While this model represents an improvement over other models, the amounts at risk are relatively trivial and, standing alone, will not bend the cost curve.

"Nevertheless, the AQC is different because no provider group can earn a quality bonus unless the physicians and hospitals achieve or exceed the quality standards."

As I've written before, I think the focus should be on long-term planning for a wholesale shift away from fee-for-service medicine rather than trying to expose and rationalize payment levels. Global payments (a euphemism for that dirty word, capitation), a bonus structure tied to performance against quality benchmarks pegged at a level sufficient to change provider behavior, and dedicated funding within the global payment system for nurse case managers and other elements of the medical home model, are the key elements of the solution we are looking for.

The AQC is a good start.