Changes in health care spending and quality 4 years into global payment.

BACKGROUND: Spending and quality under global budgets remain unknown beyond 2 years. We evaluated spending and quality measures during the first 4 years of the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC). METHODS: We compared spending and quality among enrollees whose physician organizations entered the AQC from 2009 through 2012 with those among persons in control states. We studied spending changes according to year, category of service, site of care, experience managing risk contracts, and price versus utilization. We evaluated process and outcome quality. RESULTS: In the 2009 AQC cohort, medical spending on claims grew an average of $62.21 per enrollee per quarter less than it did in the control cohort over the 4-year period (P<0.001). This amount is equivalent to a 6.8% savings when calculated as a proportion of the average post-AQC spending level in the 2009 AQC cohort. Analogously, the 2010, 2011, and 2012 cohorts had average savings of 8.8% (P<0.001), 9.1% (P<0.001), and 5.8% (P=0.04), respectively, by the end of 2012. Claims savings were concentrated in the outpatient-facility setting and in procedures, imaging, and tests, explained by both reduced prices and reduced utilization. Claims savings were exceeded by incentive payments to providers during the period from 2009 through 2011 but exceeded incentive payments in 2012, generating net savings. Improvements in quality among AQC cohorts generally exceeded those seen elsewhere in New England and nationally. CONCLUSIONS: As compared with similar populations in other states, Massachusetts AQC enrollees had lower spending growth and generally greater quality improvements after 4 years. Although other factors in Massachusetts may have contributed, particularly in the later part of the study period, global budget contracts with quality incentives may encourage changes in practice patterns that help reduce spending and improve quality. (Funded by the Commonwealth Fund and others.).

Enrollment In A Health Plan With A Tiered Provider Network Decreased Medical Spending By 5 Percent.

Employers and health plans are increasingly using tiered provider networks in their benefit designs to steer patients to higher quality and more efficient providers in an effort to increase value in the health care system. We evaluated the impact of a tiered-network health plan on total health care spending and on inpatient, outpatient, and outpatient radiology spending for nonelderly enrollees in a commercial health plan in 2008-12. The tiered network was associated with $43.36 lower total adjusted medical spending per member per quarter ($830.07 versus $873.43), which represented about a 5 percent decrease in spending, relative to enrollees in similar plans without a tiered network. Similar levels of spending reductions were found for outpatient (4.6 percent) and outpatient radiology spending (6.5 percent). These findings suggest that health plans with tiered provider networks have the potential to reduce aggregate health care spending.

Geographic Variation in Quality of Care for Commercially Insured Patients.

BACKGROUND: Extensive evidence documents geographic variation in spending, but limited research assesses geographic variation in quality, particularly among commercially insured enrollees. OBJECTIVE: To measure geographic variation in quality measures, correlation among measures, and correlation between measures and spending for commercially insured enrollees. DATA SOURCE: Administrative claims from the 2007-2009 Truven MarketScan database. METHODS: We calculated variation in, and correlations among, 10 quality measures across 306 Hospital Referral Regions (HRRs), adjusting for beneficiary traits and sample size differences. Further, we created a quality index and correlated it with spending. RESULTS: The coefficient of variation of HRR-level performance ranged from 0.04 to 0.38. Correlations among quality measures generally ranged from 0.2 to 0.5. Quality was modestly positively related to spending. CONCLUSION: Quality varied across HRRs and there was only a modest geographic "quality footprint."

Substantial Physician Turnover And Beneficiary 'Churn' In A Large Medicare Pioneer ACO.

Alternative payment models, such as accountable care organizations (ACOs), attempt to stimulate improvements in care delivery by better alignment of payer and provider incentives. However, limited attention has been paid to the physicians who actually deliver the care. In a large Medicare Pioneer ACO, we found that the number of beneficiaries per physician was low (median of seventy beneficiaries per physician, or less than 5 percent of a typical panel). We also found substantial physician turnover: More than half of physicians either joined (41 percent) or left (18 percent) the ACO during the 2012-14 contract period studied. When physicians left the ACO, most of their attributed beneficiaries also left the ACO. Conversely, about half of the growth in the beneficiary population was because of new physicians affiliating with the ACO; the remainder joined after switching physicians. These findings may help explain the muted financial impact ACOs have had overall, and they raise the possibility of future gaming on the part of ACOs to artificially control spending. Policy refinements include coordinated and standardized risk-sharing parameters across payers to prevent any dilution of the payment incentives or confusion from a cacophony of incentives across payers.

Early Impact Of CareFirst's Patient-Centered Medical Home With Strong Financial Incentives.

In 2011 CareFirst BlueCross BlueShield, a large mid-Atlantic health insurance plan, implemented a payment and delivery system reform program. The model, called the Total Care and Cost Improvement Program, includes enhanced payments for primary care, significant financial incentives for primary care physicians to control spending, and care coordination tools to support progress toward the goal of higher-quality and lower-cost patient care. We conducted a mixed-methods evaluation of the initiative's first three years. Our quantitative analyses used spending and utilization data for 2010-13 to compare enrollees who received care from participating physician groups to similar enrollees cared for by nonparticipating groups. Savings were small and fully shared with providers, which suggests no significant effect on total spending (including bonuses). Our qualitative analysis suggested that early in the program, many physicians were not fully engaged with the initiative and did not make full use of its tools. These findings imply that this and similar payment reforms may require greater time to realize significant savings than many stakeholders had expected. Patience may be necessary if payer-led reform is going to lead to system transformation.

Value-based insurance design: aligning incentives to bridge the divide between quality improvement and cost containment.

Rising costs and suboptimal clinical quality have spawned efforts to redesign healthcare benefit packages. Momentum has gathered behind 2 trends; the first, represented by disease management initiatives and pay-for-performance programs, focuses on the quality of care, and uses tools to manage patient health. The second trend, represented by increased patient cost sharing and consumer-driven health plans, focuses on the cost of care and uses financial incentives to alter patient and provider behavior. These 2 trends create a conflict for the patient in that disease management programs--designed to improve patient self-management--aim to enhance compliance with specific clinical interventions, while rising copayments create financial barriers that discourage the use of these recommended services. When patients are required to pay more for their healthcare, they buy less, even if the intervention is potentially lifesaving. Thus, the challenge for purchasers is to devise benefit packages that incorporate a range of features that complement each other in the effective and efficient delivery of care while explicitly avoiding the unwanted negative clinical effects associated with increased cost sharing.

Unintended consequences of eliminating medicare payments for consultations.

BACKGROUND: Prior to 2010, Medicare payments for consultations (commonly billed by specialists) were substantially higher than for office visits of similar complexity (commonly billed by primary care physicians). In January 2010, Medicare eliminated consultation payments from the Part B Physician Fee Schedule and increased fees for office visits. This change was intended to be budget neutral and to decrease payments to specialists while increasing payments to primary care physicians. We assessed the impact of this policy on spending, volume, and complexity for outpatient office encounters in 2010. METHODS: We examined outpatient claims from 2007 through 2010 for 2 247 810 Medicare beneficiaries with Medicare Supplemental (Medigap) coverage through large employers in the Thomson Reuters MarketScan Database. We used segmented regression analysis to study changes in spending, volume, and complexity of office encounters adjusted for age, sex, health status, secular trends, seasonality, and hospital referral region. RESULTS: "New" office visits largely replaced consultations in 2010. An average of $10.20 more was spent per beneficiary per quarter on physician encounters after the policy (6.5% increase). The total volume of physician encounters did not change significantly. The increase in spending was largely explained by higher office-visit fees from the policy and a shift toward higher-complexity visits to both specialists and primary care physicians. CONCLUSIONS: The elimination of consultations led to a net increase in spending on visits to both primary care physicians and specialists. Higher prices, partially owing to the subjectivity of codes in the physician fee schedule, explained the spending increase, rather than higher volumes.

Delivery system integration and health care spending and quality for Medicare beneficiaries.

IMPORTANCE: The Medicare accountable care organization (ACO) programs rely on delivery system integration and health care provider risk sharing to lower spending while improving quality of care. OBJECTIVE: To compare spending and quality between larger and smaller provider groups and examine how size-related differences vary by 2 factors considered central to ACO performance: group primary care orientation and financial risk sharing by health care providers. EVIDENCE REVIEW: Using 2009 Medicare claims and linked American Medical Association Group Practice data, we assigned 4.29 million beneficiaries to health care provider groups based on primary care use. We categorized group size according to eligibility thresholds for the Shared Savings (≥5000 assigned beneficiaries) and Pioneer (≥15,000) ACO programs and distinguished hospital-based from independent groups. We assessed the primary care orientation of larger groups' specialty mix and used health maintenance organization market penetration and data from the Community Tracking Study to measure the extent of financial risk accepted by different types of provider groups in different areas for managed care patients. We estimated linear regression models comparing spending and quality between larger and smaller health care provider groups, allowing size-related differences to vary by measures of group primary care orientation and risk sharing. Spending and quality measures included total medical spending, spending by type of service, 5 process measures of quality, and 30-day readmissions, all adjusted for sociodemographic and clinical characteristics. FINDINGS: Compared with smaller groups, larger hospital-based groups had higher total per-beneficiary spending in 2009 (mean difference, +$849), higher 30-day readmission rates (+1.3 percentage points), and similar performance on 4 of 5 process measures of quality. In contrast, larger independent physician groups performed better than smaller groups on all process measures and exhibited significantly lower per-beneficiary spending in counties where risk sharing by these groups was more common (-$426). Among all groups sufficiently large to participate in ACO programs, a strong primary care orientation was associated with lower spending, fewer readmissions, and better quality of diabetes care. CONCLUSIONS AND RELEVANCE: Spending was lower and quality of care better for Medicare beneficiaries served by larger independent physician groups with strong primary care orientations in environments where health care providers accepted greater risk.

Would having more primary care doctors cut health spending growth?

Spending on health care in markets with a larger percentage of primary care physicians (PCPs) is lower at any point in time than is true in other markets. The relationship between physician workforce composition and the rate of spending growth is less clear. This analysis of market-level Medicare spending data between 1995 and 2005 reveals that the proportion of PCPs is not associated with spending growth. Additional research is needed before the potential causal impact of PCPs can be fully assessed. However, these findings suggest that changes in the composition of the physician workforce will not be sufficient to address spending growth.