PUBLIC RELEASE DATE:

29-Oct-2014

Contact: David Cameron david_cameron@hms.harvard.edu 617-432-0441 Harvard Medical School @HarvardHealth

A new study suggests that a plan that uses global budgets for health care, an alternative to the traditional fee-for-service model of reimbursement, has improved the quality of patient care and lowered costs during the four years since it was first implemented.

Researchers from Harvard Medical School'sDepartment of Health Care Policy have analyzed claims data from the first four years of Blue Cross Blue Shield of Massachusetts' Alternative Quality Contract (AQC), a global budget program in which health care provider organizations were given a budget to care for patients insured under the health care plan. Such a model contrasts with widely used fee-for-service systems, where providers are reimbursed for each medical service they deliver.

"These results are encouraging, because, throughout our health care system, spending is growing at an unsustainable rate and our quality of health care is not as high as it should be," said study author Zirui Song, HMS clinical fellow in medicine and resident at Massachusetts General Hospital. "Global budgets and other payment reform initiatives provide incentives for physicians and hospitals to think collectively about population health and to focus on coordination of care."

The study compares Blue Cross members who have a primary care physician (PCP) as part of an AQC contract to a control group of commercially insured individuals across eight northeastern states (Connecticut, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont) who also have designated PCPs in their health plans.

Comparing the financial and quality results of the AQC with this control group was important, the researchers said, because it accounts for more general trends locally and nationallyshowing that the AQC achieved savings over and above what was happening in similar health care environments.

Though trends were similar prior to the AQC, from 2009-2012 Massachusetts AQC enrollees had smaller increases in medical spending over the first four years of the contract than similar individuals in other states, researchers said. Patients who received care under the AQC also experienced larger improvements in measures of quality of care such as the percentage of diabetes patients who received eye exams or blood sugar monitoring, or measures of how well patients controlled their blood pressure or cholesterol, the researchers said.

"The health care system is transforming as we move to new payment models," said Michael Chernew, Leonard D. Schaeffer Professor of Health Care Policy at HMS. "While there's certainly more to learn, preliminary results suggest that this transformationmay improve quality and at least in some settings reduce spending."

See the original post:

Four years in, payment model lowers medical spending, improves care