Global budgets and technology-intensive medical services

Abstract

Background In 2009-2010, Blue Cross Blue Shield of Massachusetts entered into global payment contracts (the Alternative Quality contract, AQC) with 11 provider organizations. We evaluated the impact of the AQC on spending and utilization of several categories of medical technologies, including one considered high value (colonoscopies) and three that include services that may be overused in some situations (cardiovascular, imaging, and orthopedic services). Methods Approximately 420,000 unique enrollees in 2009 and 180,000 in 2010 were linked to primary care physicians whose organizations joined the AQC. Using three years of pre-intervention data and a large control group, we analyzed changes in utilization and spending associated with the AQC with a propensity-weighted difference-in-differences approach adjusting for enrollee demographics, health status, secular trends, and cost-sharing. Results In the 2009 AQC cohort, total volume of colonoscopies increased 5.2 percent (p=0.04) in the first two years of the contract relative to control. The contract was associated with varied changes in volume for cardiovascular and imaging services, but total spending on cardiovascular services in the first two years decreased by 7.4% (p=0.02) while total spending on imaging services decreased by 6.1% (p<0.001) relative to control. In addition to lower utilization of higher-priced services, these decreases were also attributable to shifting care to lower-priced providers. No effect was found in orthopedics. Conclusions As one example of a large-scale global payment initiative, the AQC was associated with higher use of colonoscopies. Among several categories of services whose value may be controversial, the contract generally shifted volume to lower-priced facilities or services.

Payer Type and Low‐Value Care: Comparing Choosing Wisely Services across Commercial and Medicare Populations

“…Recent private payer reforms such as the Alternative Quality Contract have begun to show some success in decreasing use of low‐value services (Song et al. ). Innovative bundled payments, such as the PROMETHEUS payment model and the Geisinger ProvenCare model, also aim to reduce costs and improve quality (de Brantes, Rosenthal, and Painter ; Paulus ).…”

“…Private payers have similar contracts and increasingly are holding providers accountable for cost and quality, paralleling Medicare attempts to reduce low-value care. Recent private payer reforms such as the Alternative Quality Contract have begun to show some success in decreasing use of lowvalue services (Song et al 2013). Innovative bundled payments, such as the PROMETHEUS payment model and the Geisinger ProvenCare model, also aim to reduce costs and improve quality (de Brantes, Rosenthal, and Painter 2009;Paulus 2009).…”

Overuse of Cardiovascular Services

“…To the best of our knowledge, there is no evidence of the effectiveness of any single payment model as a tool for reducing overuse specifically. At a high level, however, the evidence suggests that risk sharing reduces use and total cost, [55][56][57] whereas pay for performance has had a much more mixed record of success. 58 A critical question for the ongoing research on global and bundled payment initiatives (eg, Medicare's Accountable Care Organizations Shared Savings Program and Bundled Payment for Care Initiative) is whether these approaches, which effectively encourage reduction in costs regardless of value, have a disproportionate effect on overuse.…”

The End of Hospital Cost Shifting and the Quest for Hospital Productivity

“…The AQC, which incorporates global budget and pay‐for‐performance principles, began in 2009 with 7 physician organizations in Massachusetts and had 15 participating groups by 2012 (Song et al. ). Investigators found that the AQC was associated with spending reductions of 1.9 and 3.3 percent in its first and second years, respectively, along with evidence of improvements in quality.…”

“…Analysis of Blue Cross Blue Shield of Massachusetts' Alternative Quality Contract (AQC) does as well (Song et al 2011(Song et al , 2012. The AQC, which incorporates global budget and pay-for-performance principles, began in 2009 with 7 physician organizations in Massachusetts and had 15 participating groups by 2012 (Song et al 2013). Investigators found that the AQC was associated with spending reductions of Hospital Cost Shifting and Productivity 1.9 and 3.3 percent in its first and second years, respectively, along with evidence of improvements in quality.…”