The Performance Measurement Lead at BCBSMA Discusses the Plan’s Bold Payment Model


On Dec. 15, 2022, leaders at the Boston-based Blue Cross Blue Shield of Massachusetts (BCBSMA) announced a groundbreaking payment model, and with four provider organizations already under contract. The press release began thus: “Blue Cross Blue Shield of Massachusetts (‘Blue Cross’) today announced a milestone in its commitment to ensuring access to high-quality, affordable and equitable care. The not-for-profit health plan is the first in Massachusetts – and among the first in the nation – to create a financial payment model rewarding health systems and physicians for eliminating racial and ethnic inequities in care, with a goal of improving health care for all 2.9 million Blue Cross members. Four of the state’s largest health care systems have signed the agreements, which link financial incentives to improvements in health equity: Steward Healthcare Network (‘Steward’), Beth Israel Lahey Health (‘BILH’), Mass General Brigham and Boston Accountable Care Organization, Inc. (‘BACO’), which is part of Boston Medical Center. Together, these systems provide care to more than 550,000 Blue Cross members,” the press release noted.

“For more than a decade, we’ve collaborated with physicians and hospitals via our Alternative Quality Contract, which replaced the fee-for-service model and instead rewards clinicians’ efforts to improve the quality and value of the care they deliver,” Andrew Dreyfus, CEO of Blue Cross, said in a statement included in the press release. “We’re now building on that model to help health systems in our value-based payment programs improve equity. As a health plan, this is the most important tool we have to work toward a health system that provides affordable, quality and equitable care to all our members.”

The press release went on to note that “The new contracts will initially focus on measuring and rewarding equity in care in several clinical areas where inequities have been identified, including colorectal cancer screenings, blood pressure control and care for diabetes. Additional categories will be added as the payment model evolves. The Center for Healthcare Organization and Innovation Research (CHOIR) at the UC Berkeley School of Public Health will conduct an independent external evaluation of Blue Cross’ efforts to advance health equity, using qualitative and quantitative methods to examine and publish the effects of this initiative.”

And the press release quoted Mark Friedberg, M.D., senior vice president, performance measurement & improvement at BCBSMA, as stating that “We believe nearly all clinicians already want to reduce racial and ethnic inequities in care. By incorporating equity measures into our payment models, we intend to create an explicit business case for large health care systems to increase their investments in developing, expanding and sustaining programs that produce measurable improvements in equity.”

And, the press release noted, “Friedberg noted that Blue Cross encourages and supports participating organizations to extend their equity improvement initiatives to all of their patients – even those whose health plans have not yet introduced financial incentives linked to health equity.”

Earlier this month, Healthcare Innovation Editor-in-Chief Mark Hagland interviewed Dr. Friedberg regarding this groundbreaking initiative. Below are excerpts from that interview.

In this value-based contracting work, what is BCBSMA’s core overall strategy?

Our overall strategy includes four main pillars: to make sure our members receive high-quality, affordable, equitable care, with an excellent consumer experience. And we added that equity pillar in the middle of 2020. Quality had always been a pillar, per the Institute of Medicine. But we decided to explicitly elevate equity to be equal to the other pillars in 2020.

How do you accomplish the best outcomes from providers’ care? And how do you drive the correct incentives that will have the most effect on provider behavior?

First, I’d say that it’s not only about the incentives; they matter—they’re necessary, but not sufficient, to achieve the kinds of care we want to achieve. And the measures in the pay-for-equity are called the alternative quality contract. And the contract always gets the most attention, but I think that that does a bit of disservice to the totality of the elements. And one key element involves the timely sharing of data with providers. And we added an equity element to the data we’re sharing with providers and also collecting from them. For many years, our providers have been used to getting quality reports from us; but in the fall of 2021, they for the first time got a report on how they did in terms of equity outcomes—confidentially to each provider. Let’s say they have an equity rating that finds the provider organization is not doing as well—the equity report goes to the health system level—and they can work to improve. And it’s especially important for the purposes of looking at inequities in care.

Is there actionable information in those reports?

Yes, that’s the second component; it’s not in the report itself, but we provide technical support to each of the provider organizations. We provider people who act as trainers and consultants to them. We’ve been doing this ever since the inception of the alternative quality contracts back in 2009—so, well over a decade. And what we didn’t have a ton of experience in, in-house, was how to improve on equity. So we partnered and contracted with the Institute for Healthcare Improvement (IHI) in 2021, because they had had five years’ experience in coaching organizations on equity. And they helped us convene an equity action community—it allows providers to share where they are, and receive help from experts. And the IHI did a ton of training of our staff. And all of the alternative quality contract groups participate in it, along with our staff and IHI staff. And there are all sorts of technical supports around patient race and ethnicity. And how to begin to target individual equity measures for improvement, to produce verifiable closure of equity gaps.

How has it been going?

It’s been going well. The providers are all already participating.

Are providers moving forward as you had hoped?

Yes, in general, but I want to be a little bit humble about this. If I have a particular idea about what a health system should be working on, and they have a different idea, they might be right. We’re new at this, and so are they; everyone is. But generally, yes—it was not hard at all to get provider systems interested and engaged in participating in this product. And they’ve been very interested in the equity element. One thing that helps is that we gave a $25 million grant to the IHI to work with the provider organizations. And most of the money will already be out the door by the end of this year. And it would be difficult for the provider organizations to make the kinds of changes we’re looking for, without adequate resources.

Are you at all concerned that the financial fragility of hospitals might impede the advance of value-based contracting going forward?

The financial fragility of hospitals is always of concern. I don’t think that that is necessarily linked to value-based contracting, categorically; everything’s in the details.

You have the advantage that you’re not starting from zero, then, obviously?

Having had an alternative quality contract—ACQ—in place for over ten years, the providers are familiar with it. But yes, building it all from scratch would have bene very difficult.

How would characterize the data and analytics element of this?

When you move into measuring inequities and constructing incentives based on them, the data challenges are considerable. We’ve spent a few years working through those challenges, and we don’t have it perfect by any means, but we’re as advanced as anyone. We’ve collected a ton of race and ethnicity data, voluntarily, from patients, and we’ve done a lot of analysis.

What are you seeing overall?

At a very high level, every health plan can do what we’ve done; it’s a matter of will more than anything else; and you can start now. There are no justifiable excuses for failing to collect self-reported race and ethnicity data from your members, or for using data to approach and address inequities. That can start tomorrow at every health plan in the country; it’s all possible.

What do the next few years look like on this journey forward with your providers?

We’d like to get the remainder of the organizations eligible for pay for equity into pay for equity as soon as possible. Everybody’s already interested in it; the question from the CFO perspective, esp. given the financial pressures you’ve just outlined, is, are they comfortable making the substantial investments needed. And that’s our goal. We can invest in multilingual capabilities, in working with disadvantaged communities, etc. So expanding that model is the key thing. And the proof will be in the pudding. We hope that all of it will work; Hector Rodriguez, from UC Berkeley, funded by the Commonwealth Fund, and he and his team are doing ongoing qualitative analysis and eventually will do a quantitative evaluation of our work. His team is called CHOIR. Press release.

How optimistic do you feel about the advance of value-based contracting in the overall U.S. healthcare system?

I don’t have enough sense of other markets, but my hope is that what we end up more frequently is good value-based contracting; I’d like to see effective value-based contracting be the norm. But doing VBC for VBC’s sake, is not the goal. It’s equitable, high-quality care with a great consumer experience. If we don’t get those four things out of it, there’s no point.



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