Less Spending Better Care: Population-based Global Payment Study

July 26, 2019 · Jazmyne Carter

As you may know, some insurers established global payments to drive higher quality and lower costs in health care.

A new study published in the New England Journal of Medicine (NEJM) shows how one Massachusetts plan’s innovative model achieved measurable improvement in both.

Blue Cross Blue Shield of Massachusetts Study

In 2006, Blue Cross Blue Shield of Massachusetts (BCBSM) implemented its Alternative Quality Contract (AQC). The AQC gives providers a target for spending on certain populations and financial incentives for staying within budget.

Eight years of data indicates higher quality and lower costs in the treatment of AQC participants vs the general population. For example, the increase in annual medical spending on claims for the enrollees in AQC organizations was $461 lower per enrollee. That’s a whopping 11.7% relative savings on claims.

On top of achieving savings, AQC providers performed better on both performance-based (e.g., diabetes care/preventive care) and outcome-based (hemoglobin/blood pressure control) quality measures than the control group from 2008-2016.

Bottom Line

The success of BCBSM’s experiment further proves that reducing cost growth and improving quality go hand in hand. In fact, if done right, the two can feed into each other and create a true “win-win” scenario.  However, it’s a process. Systems are learning every day how to get there.  For now, we celebrate the AQC and encourage others to continue striving for better care at lower costs.

Population-based global payment models are worth looking into.

Get more details from the New England Journal of Medicine.