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Implementing the requirements of an accountable care organization for one group of patients may lower costs and improve care for every patient seen in a physician’s practice, according to a study published online Aug. 27 in JAMA.
Dr. J. Michael McWilliams of Harvard Medical School, Boston, and his colleagues looked at whether the Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract (AQC), a successful ACO started in 2009, was associated with changes in spending or quality of care for Medicare beneficiaries who were not part of the ACO.
In the AQC, physicians and other providers assumed financial risk if they spent more than a global budget, but shared savings with the insurer if spending was under budget. Physicians could also receive bonuses for meeting quality targets.
The investigators compared total quarterly medical spending per beneficiary between two groups: beneficiaries who received care through the AQC in 2009 or 2010 (1.7 million person-years) and controls who received care from other providers (JAMA 2013;310:829-836).
Quarterly spending per beneficiary in 2007 and 2008 (prior to the AQC contracts) was $150 higher for the AQC group than the control group. Two years after the AQC contracts went into effect, the difference was $51 per quarter. The biggest reduction in spending was for beneficiaries with five or more conditions, and in spending on outpatient care. Spending was significantly reduced for office visits, emergency department visits, minor procedures, imaging, and lab tests.
Some improvement was seen on quality measures. The number of beneficiaries tested for low-density lipoprotein levels increased. Prior to the AQC, LDL testing rates for diabetic beneficiaries in the AQC group were 2.2% higher than for controls. By the second year, the testing rate was 5.2% higher for those in the AQC. LDL testing rates also improved for cardiovascular disease patients in the AQC.
No improvement was seen on other quality measures, including hospitalization for an ambulatory care–sensitive condition related to cardiovascular disease or diabetes; readmission within 30 days of discharge; screening mammography for women aged 65-69 years; LDL testing for beneficiaries with a history of ischemic heart disease, myocardial infarction, or stroke; and hemoglobin A1c testing and retinal exams for beneficiaries with diabetes.
"These findings suggest that global payment incentives in the AQC elicited responses from participating organizations that extended beyond targeted case management of BCBS enrollees," the authors wrote.
Overall, the study "suggests that organizations in Massachusetts willing to assume greater financial risk were capable of achieving modest reductions in spending for Medicare beneficiaries without compromising quality of care," wrote Dr. McWilliams and his colleagues.
The study also showed that physicians and provider organizations who see spillover effects from one ACO contract might be willing "to enter similar contracts with additional insurers."
But there is a potential downside to the spillover effect, according to the authors: Because cost and quality may be improved overall, "competing insurers with similar provider networks could offer lower premiums without incurring the costs of managing an ACO."
On Twitter @aliciaault
The Alternative Quality Contract is touted as a payment mechanism where "provider organizations bear financial risk for spending in excess of a global budget, gain from reducing spending below the budget, and receive bonuses for meeting performance targets on quality measures." Groups are incentivized to steer patients toward lower-cost specialists, achieving savings through shifting procedures, imaging, and tests to facilities with lower fees, as well as reduced utilization. At present, the only AQC measure that touches upon gastroenterology is colorectal cancer screening rates.
The authors note that the AQC "was associated with significant reductions in spending for Medicare beneficiaries but not with consistently better quality of care." If you are financially at risk for a significant group of your patients, you will likely treat all of your patients in a similar manner regardless of payment source. The imperative to cut costs will lead risk-bearing providers to seek the least costly manner for achieving the process quality metric that they are eligible to receive bonuses on. The risk for hospital-based specialists is clear – those who lack access to a lower cost site of service are in danger of being marginalized out of the network, even if one’s outcomes are superior. The imperative for gastroenterology is to develop outcome measures such as complication rates after endoscopic procedures, so that what we are being measured on is more meaningful than just cost.
Dr. Joel Brill, AGAF, is chief medical officer of predictive health, LLC, in Phoenix, and is an assistant clinical professor of medicine at the University of Arizona School of Medicine, Tucson. He represents the AGA at FairHealth Inc., which was established to serve as an independent, objective, and transparent source of health care reimbursement data.
The Alternative Quality Contract is touted as a payment mechanism where "provider organizations bear financial risk for spending in excess of a global budget, gain from reducing spending below the budget, and receive bonuses for meeting performance targets on quality measures." Groups are incentivized to steer patients toward lower-cost specialists, achieving savings through shifting procedures, imaging, and tests to facilities with lower fees, as well as reduced utilization. At present, the only AQC measure that touches upon gastroenterology is colorectal cancer screening rates.
The authors note that the AQC "was associated with significant reductions in spending for Medicare beneficiaries but not with consistently better quality of care." If you are financially at risk for a significant group of your patients, you will likely treat all of your patients in a similar manner regardless of payment source. The imperative to cut costs will lead risk-bearing providers to seek the least costly manner for achieving the process quality metric that they are eligible to receive bonuses on. The risk for hospital-based specialists is clear – those who lack access to a lower cost site of service are in danger of being marginalized out of the network, even if one’s outcomes are superior. The imperative for gastroenterology is to develop outcome measures such as complication rates after endoscopic procedures, so that what we are being measured on is more meaningful than just cost.
Dr. Joel Brill, AGAF, is chief medical officer of predictive health, LLC, in Phoenix, and is an assistant clinical professor of medicine at the University of Arizona School of Medicine, Tucson. He represents the AGA at FairHealth Inc., which was established to serve as an independent, objective, and transparent source of health care reimbursement data.
The Alternative Quality Contract is touted as a payment mechanism where "provider organizations bear financial risk for spending in excess of a global budget, gain from reducing spending below the budget, and receive bonuses for meeting performance targets on quality measures." Groups are incentivized to steer patients toward lower-cost specialists, achieving savings through shifting procedures, imaging, and tests to facilities with lower fees, as well as reduced utilization. At present, the only AQC measure that touches upon gastroenterology is colorectal cancer screening rates.
The authors note that the AQC "was associated with significant reductions in spending for Medicare beneficiaries but not with consistently better quality of care." If you are financially at risk for a significant group of your patients, you will likely treat all of your patients in a similar manner regardless of payment source. The imperative to cut costs will lead risk-bearing providers to seek the least costly manner for achieving the process quality metric that they are eligible to receive bonuses on. The risk for hospital-based specialists is clear – those who lack access to a lower cost site of service are in danger of being marginalized out of the network, even if one’s outcomes are superior. The imperative for gastroenterology is to develop outcome measures such as complication rates after endoscopic procedures, so that what we are being measured on is more meaningful than just cost.
Dr. Joel Brill, AGAF, is chief medical officer of predictive health, LLC, in Phoenix, and is an assistant clinical professor of medicine at the University of Arizona School of Medicine, Tucson. He represents the AGA at FairHealth Inc., which was established to serve as an independent, objective, and transparent source of health care reimbursement data.
Implementing the requirements of an accountable care organization for one group of patients may lower costs and improve care for every patient seen in a physician’s practice, according to a study published online Aug. 27 in JAMA.
Dr. J. Michael McWilliams of Harvard Medical School, Boston, and his colleagues looked at whether the Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract (AQC), a successful ACO started in 2009, was associated with changes in spending or quality of care for Medicare beneficiaries who were not part of the ACO.
In the AQC, physicians and other providers assumed financial risk if they spent more than a global budget, but shared savings with the insurer if spending was under budget. Physicians could also receive bonuses for meeting quality targets.
The investigators compared total quarterly medical spending per beneficiary between two groups: beneficiaries who received care through the AQC in 2009 or 2010 (1.7 million person-years) and controls who received care from other providers (JAMA 2013;310:829-836).
Quarterly spending per beneficiary in 2007 and 2008 (prior to the AQC contracts) was $150 higher for the AQC group than the control group. Two years after the AQC contracts went into effect, the difference was $51 per quarter. The biggest reduction in spending was for beneficiaries with five or more conditions, and in spending on outpatient care. Spending was significantly reduced for office visits, emergency department visits, minor procedures, imaging, and lab tests.
Some improvement was seen on quality measures. The number of beneficiaries tested for low-density lipoprotein levels increased. Prior to the AQC, LDL testing rates for diabetic beneficiaries in the AQC group were 2.2% higher than for controls. By the second year, the testing rate was 5.2% higher for those in the AQC. LDL testing rates also improved for cardiovascular disease patients in the AQC.
No improvement was seen on other quality measures, including hospitalization for an ambulatory care–sensitive condition related to cardiovascular disease or diabetes; readmission within 30 days of discharge; screening mammography for women aged 65-69 years; LDL testing for beneficiaries with a history of ischemic heart disease, myocardial infarction, or stroke; and hemoglobin A1c testing and retinal exams for beneficiaries with diabetes.
"These findings suggest that global payment incentives in the AQC elicited responses from participating organizations that extended beyond targeted case management of BCBS enrollees," the authors wrote.
Overall, the study "suggests that organizations in Massachusetts willing to assume greater financial risk were capable of achieving modest reductions in spending for Medicare beneficiaries without compromising quality of care," wrote Dr. McWilliams and his colleagues.
The study also showed that physicians and provider organizations who see spillover effects from one ACO contract might be willing "to enter similar contracts with additional insurers."
But there is a potential downside to the spillover effect, according to the authors: Because cost and quality may be improved overall, "competing insurers with similar provider networks could offer lower premiums without incurring the costs of managing an ACO."
On Twitter @aliciaault
Implementing the requirements of an accountable care organization for one group of patients may lower costs and improve care for every patient seen in a physician’s practice, according to a study published online Aug. 27 in JAMA.
Dr. J. Michael McWilliams of Harvard Medical School, Boston, and his colleagues looked at whether the Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract (AQC), a successful ACO started in 2009, was associated with changes in spending or quality of care for Medicare beneficiaries who were not part of the ACO.
In the AQC, physicians and other providers assumed financial risk if they spent more than a global budget, but shared savings with the insurer if spending was under budget. Physicians could also receive bonuses for meeting quality targets.
The investigators compared total quarterly medical spending per beneficiary between two groups: beneficiaries who received care through the AQC in 2009 or 2010 (1.7 million person-years) and controls who received care from other providers (JAMA 2013;310:829-836).
Quarterly spending per beneficiary in 2007 and 2008 (prior to the AQC contracts) was $150 higher for the AQC group than the control group. Two years after the AQC contracts went into effect, the difference was $51 per quarter. The biggest reduction in spending was for beneficiaries with five or more conditions, and in spending on outpatient care. Spending was significantly reduced for office visits, emergency department visits, minor procedures, imaging, and lab tests.
Some improvement was seen on quality measures. The number of beneficiaries tested for low-density lipoprotein levels increased. Prior to the AQC, LDL testing rates for diabetic beneficiaries in the AQC group were 2.2% higher than for controls. By the second year, the testing rate was 5.2% higher for those in the AQC. LDL testing rates also improved for cardiovascular disease patients in the AQC.
No improvement was seen on other quality measures, including hospitalization for an ambulatory care–sensitive condition related to cardiovascular disease or diabetes; readmission within 30 days of discharge; screening mammography for women aged 65-69 years; LDL testing for beneficiaries with a history of ischemic heart disease, myocardial infarction, or stroke; and hemoglobin A1c testing and retinal exams for beneficiaries with diabetes.
"These findings suggest that global payment incentives in the AQC elicited responses from participating organizations that extended beyond targeted case management of BCBS enrollees," the authors wrote.
Overall, the study "suggests that organizations in Massachusetts willing to assume greater financial risk were capable of achieving modest reductions in spending for Medicare beneficiaries without compromising quality of care," wrote Dr. McWilliams and his colleagues.
The study also showed that physicians and provider organizations who see spillover effects from one ACO contract might be willing "to enter similar contracts with additional insurers."
But there is a potential downside to the spillover effect, according to the authors: Because cost and quality may be improved overall, "competing insurers with similar provider networks could offer lower premiums without incurring the costs of managing an ACO."
On Twitter @aliciaault
FROM JAMA
Major finding: Quarterly spending per Medicare beneficiary was reduced by about $100 for those who were receiving care in a practice that had a contract with Blues Cross Blue Shield of Massachusetts’ Alternative Quality Contract.
Data source: Quasi-experimental comparisons from 2007-2010 of Medicare beneficiaries served by 11 provider organizations who entered the AQC in 2009 or 2010, compared to those served by other providers.
Disclosures: The study was supported by grants from the National Institute on Aging, the American Federation for Aging Research, the Doris Duke Charitable Foundation, and the Commonwealth Fund. The investigators reported no relevant conflicts of interest.
