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Mass. hospitals sign on to new value-based care payment model

Blue Cross Blue Shield of Massachusetts announced that four physician and hospital organizations signed a contract to implement the insurance company's new value-based care model.

In an effort to achieve value-based care, Blue Cross Blue Shield of Massachusetts and four of the state's physician and hospital organizations have reached an agreement to provide services to thousands of Blue Cross preferred provider organization (PPO) members under a value-based payment model, which has the potential to improve the quality of patient care, as well as lower healthcare costs.

The four organizations that have agreed to adopt the new PPO model on Jan. 1, 2016, include:

  • Lahey Health, based in Burlington, Mass.;
  • Partners HealthCare in Boston, which includes Brigham and Women's Hospital and Massachusetts General Hospital;
  • Steward Health Care System, based in Boston; and
  • Mount Auburn Cambridge Independent Practice Association and Mount Auburn Hospital in Cambridge, Mass.

New model has far reach

Altogether, these four organizations care for approximately 275,000 Blue Cross PPO members in Massachusetts or almost one-third of Blue Cross' in-state PPO membership, according to Blue Cross. However, the new PPO program will be available to all physicians and hospitals in the Blue Cross Blue Shield of Massachusetts network in 2016.

The single most promising approach to improve patient care and lower costs is to change the way we pay for care.
Andrew Dreyfuspresident and CEO of Blue Cross Blue Shield of Massachusetts

"The new … payment model encourages all of us to provide more coordinated care to a large group of patients, and this program is entirely consistent with Lahey Health's mission to deliver care in the most appropriate setting," Howard Grant, M.D., president and CEO of Lahey Health, said in a statement provided by the organization. "We look forward to working with Blue Cross Blue Shield to provide high-quality care to its members at a reasonable cost and to further lay the groundwork for controlling healthcare spending in the commonwealth."

Blue Cross' new PPO model differs from more traditional fee-for-service reimbursement models in which doctors and hospitals are paid for every patient visit and procedure, which can sometimes encourage doctors to do more in order to get paid more, even if the procedures are unnecessary.  For example, providers will be paid and rewarded for keeping their patients healthy, as well as lowering the number of hospitals stays. In other words, this move is a shift to value-based care, a spokesperson at Blue Cross confirmed.

AQC contract shows promise

Andrew Dreyfus, president and CEO of Blue Cross Blue Shield, announced the news of these agreements in front of the state's Health Policy Commission, which hosted two days of cost trends public hearings this week on how to control healthcare costs.

Also at the public hearings, Dreyfus cited a study in the New England Journal of Medicine that found that members who received care from physicians who participated in an Alternative Quality Contract (AQC) -- an incentive-based provider payment program --  experienced greater improvements in quality of care and lower spending growth compared to similar patients elsewhere, according to the release.

Dreyfus also said at the hearing: "The single most promising approach to improve patient care and lower costs is to change the way we pay for care to realign financial incentives to reward the quality, outcome and efficiency of the care patients -- our members -- receive."

Let us know what you think about the story and value-based care; email Kristen Lee, news writer, or find her on Twitter @Kristen_Lee_34.

Next Steps

Learn more about value-based care:

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The technology behind value-based care

The "Next Generation ACO Model" revealed by HHS

For now, analytics focuses on value-based reimbursement

Dig Deeper on Clinical and hospital quality reporting