Thomas H. Lee, MD, MSc, interviews Andrew Dreyfus, President and Chief Executive Officer for Blue Cross Blue Shield of Massachusetts.
This is Tom Lee, Editor-in-Chief of NEJM Catalyst, talking today with Andrew Dreyfus, who is finishing a 12-year stretch as the CEO of Blue Cross Blue Shield of Massachusetts. That 12 years is part of a longer period in which he has played a key role in driving health care reform for Massachusetts — and therefore the rest of the country. Back in the 2004, 2006 period, Andrew was an important force in getting Massachusetts health care reform passed, which then became the model for the Affordable Care Act.
During his time as CEO of Blue Cross Blue Shield of Massachusetts, Andrew and his colleagues have led the way in making population-based contracts a norm in Massachusetts through its now widely imitated Alternative Quality Contract, the AQC,in 2009. Even though this and other innovations have helped reduce the Massachusetts uninsured rate down to a low of about 3%, and it’s also helped bend the rise in health care costs, Andrew, I’m sure, feels that we’re still far from an ideal place.
At this point in health care history, and also a transition pending in his own career, I wanted to ask Andrew for his thoughts on what needs to be done and how we can go about it. First, Andrew let me get your high-level take about how things are going in our state of Massachusetts. What’s going well? Where do we have to get better?
Sure, Tom. Thanks for inviting me to be part of this conversation. First, obviously my thoughts turn to Covid-19, which is still top of mind. The last 2 years have been incredibly challenging for our health care systems — our clinicians are stretched, staffing is a challenge everywhere — but we fared relatively well as a state compared to many other parts of the country. One of the reasons is that our health care system has, for many years, worked on a high level of collaboration, communication, commitment.
We’re still largely a not-for-profit health care community here and we have a lot of shared history working together on the coverage and payment reform you mentioned before, among other challenges. Having said that, I’m concerned about affordability today. We’ve always been an expensive state on a relative basis, but for the last decade we’ve held the growth in costs below the national average and close to overall inflation.That’s no longer the case, and we’re increasingly concerned about that.
The AQC is 12 years old. It was started with an idealistic vision — no surprise, knowing you and your team. The goal was to improve quality while also controlling costs at the same time. That’s the way the financial incentives were structured. How would you say it’s going at this point?
The most recent formal evaluation of the AQC was published a few years ago by Harvard Medical School researchers. It covered the first 8 years of the program.They found that spending in this value-based payment model was about 12% lower than the control group. This reduced spending came from many routes: from fewer overused tests and imaging, patients being directed to lower-cost settings, fewer ED visits, etc. But what was striking was that we also saw substantial quality improvements and we saw dramatic increases in quality measures like controlled blood pressure or A1C for people with diabetes.
That was at a time when national measures for these same kinds of chronic illnesses were mostly stagnant. They weren’t getting better. Interestingly, one published study on the AQC even found that the quality gains were larger among practices serving lower-income communities and starting to reduce disparities of care,something I imagine we’ll come back to talking about.
We didn’t just offer these financial incentives to these clinical groups and allow them to sort this out on their own. We partnered deeply with them to help drive successes.
But maybe what I was most proud of was the collaborative nature of this success. We didn’t just offer these financial incentives to these clinical groups and allow them to sort this out on their own. We partnered deeply with them to help drive successes. We had leadership training, networking groups. We partnered on data sharing and allowed the practices themselves to understand their own data, target improvements, and take actions.
We’re still doing this. We’ve started to recently explore reports based on the kind of cost-cascade paradigm you’re probably familiar with, Tom, originally developed by Brigham and Harvard Medical School researcher Ishani Ganguli.The point there is that it can be relatively small parts of low-value care, for example an EKG before cataract surgery or an MRI for low back pain. Because they’re not that costly or prevalent, there’s little incentive to try and address them. What we find is these relatively low-cost interventions subsequently trigger a much larger cost cascade. When you quantify that, it changes the value equation and increases a lot of low-value care.
With that example, and earlier examples where we gave other population-based care to our practices, we’re trying to thread this needle on, can interventions that are truly actionable have substantial savings and opportunities?
We’re excited about what we’ve accomplished with the AQC. We know it doesn’t fix [everything]. For example, we know that model creates weak incentives for specialty physicians and hospitals to control costs at the broadest population level. We also know that payment reform, at least in this example, can exacerbate some problems. For example, we suspect that hospital systems keep on growing, meaning acquiring either more hospitals or more physician groups, both as a way to achieve scale and better performance, but also as a way to negotiate higher prices, which can then drive up costs.
When I started this process, working with people like you, Tom, and others, I was convinced that integration and coordination held great promise both to improve care and lower costs. We have seen some real examples of improved care and some lower costs, but we’ve also seen some examples where it stimulated consolidation in the health care field.
My take is that integration is something that is potentially good if the market forces are there to compel the unlocking of its potential. Part of the secret sauce of Massachusetts health care is that everyone does know everyone, so it is easier to get people to sit down at the table and collaborate in the fashion that you describe. I also think it’s a great thing that, all along, you and your colleagues were able to trust independent researchers to evaluate the impact of what you were doing.
I don’t know that many organizations have that kind of trust in their colleagues. And I can’t help but feel the face-to-face acquaintanceship that so many of us have is part of what’s explained the ability to collaborate in the past.
How are you thinking about what to do next? You said affordability is what you’re obsessing about. Are there specific segments of health care that you think provide the most opportunity to improve or create efficiency?
There are a lot of areas. All of us in the health care field have watched with interest and maybe even wonder at the rapid adoption of telemedicine and other forms of virtual care as a consequence of the pandemic. But they offer real opportunities, in the right settings, for the right patients, in the right specialties to create real efficiencies and to eliminate some of the overhead costs that come with health care.
Those of us in health care have known [the mental health crisis] has always been there. We’ve always been frustrated that it’s been so much in a silo and not well integrated with primary care and preventive care.
We still have a long way to go on chronic illness. One percent of patients drive more than 25% of the care, and 5% drive about half of the total cost of care in the U.S.While there are few very expensive patients for heart transplants or neonatal intensive care, the vast majority of those patients have multiple chronic illnesses. We’re still not doing the work we need to do to better coordinate that care, make it less fragmented, to have a better consumer experience for our patients themselves. We’ve been looking lately at end-stage renal disease, which although we’ve been focused on [it] in some ways for a number of years, there are some new organizations that are trying to disrupt it — which I know is an overused word in this field — but disrupt the kind of traditional end-stage renal disease care. Try to have more, for example, home dialysis over hemodialysis to try to prevent end-stage renal disease where that’s possible. I’m encouraged by some of these point solutions.
Another area where I’m spending a lot of both personal time and our organization’s time is in mental health. This is an area that obviously the pandemic has unmasked, an underlying second epidemic of mental health concerns and emotional distress. Those of us in health care have known [the mental health crisis] has always been there. We’ve always been frustrated that it’s been so much in a silo and not well integrated with primary care and preventive care. There are some real opportunities to work there.
Let’s make the somewhat safe assumption that the point of focuses like mental health, end-of-life, are good but not enough in their impact. At a broader structural level, how are you thinking about payer-provider integration? If the AQC contract model was not enough to spur as much fundamental redesign as we need, what are some of the other options?
First of all, I agree with your assumption there, that we can come up with elegant point solutions for some of these clinical areas, but it will be insufficient. We still have to elevate primary care to a different level than it’s been. Some of us had hoped that through value-based models, like the Alternative Quality Contract, we would rebalance care a little bit between primary care and specialty care and we would elevate primary care. It had somewhat of that effect: we brought more care coordination, advanced practice nurses, and other clinicians into the primary care setting, and that helped. But the underlying fee-for-service chassis is still very powerful, especially at large tertiary referral organizations that get a lot of their care from outside their own PCP (primary care provider) network.
We have to go more toward a — I don’t like to use the C word, the capitation word, because I think it’s such an ugly word and conjures a lot of understandable bad sentiment for physicians — but we need more monthly upfront payments to liberate PCPs from the fee-for-service structure, which will encourage more virtual care, phone care, in-person care. There’s a debate going on right now among plans, and hospitals and physicians, on how much should we be paying for a virtual visit? Should it be the same as an in-person visit? Should it be some 80% of an in-person visit? Those debates would go away if we were truly paying population-based payments upfront to primary care practices.
We announced a pilot in that area a couple of years ago. I’d like to see some of these physician groups connected to some of our larger community hospitals, which, again, can be an affordable site of care. The accountable care model is still less than it should be, and I’m excited to try to partner with low-cost groups of physicians, hospitals, community health centers, or others to see if we can have yet a second evolution of value-based payments.
There’s a debate going on right now among plans, and hospitals and physicians, on how much should we be paying for a virtual visit…. Those debates would go away if we were truly paying population-based payments upfront to primary care practices.
You are investing a lot across the board, not just with the tightly aligned organizations, in trying to improve equity in health care. Knowing your history before you were in your current role, I’m not one bit surprised. From a business perspective, why does this make sense for Blue Cross Blue Shield of Massachusetts?
I’m starting to write a paper on this, Tom, to try to talk about, how do you build competitive advantage by investing in changes around issues like health equity and mental health? A couple of thoughts on that. First, our customers, who are principally large employers, but also smaller employers, individuals, they are truly interested in equity. They’re interested as a social good, but they’re also interested as a differentiator for their own employees. The same is true in mental health. I recently spoke to a group of high-tech executives, [and] almost all their questions were about mental health and how best to deal with the mental health needs of their workers.
There is a business case to invest in health equity. We took a look, using inputted data, at our own members and what disparities existed, and we published that.The first thing we wanted [was] to be very transparent [about], here’s how we’re doing along a set of well-defined and well-established stable of quality measures, and what the differences of performance [were] for our white patients, our Black, Asian, and Latine patients. No surprise, there were substantial gaps.
What we then did is an equity audit. We gave to our physician practices [that] we work with in these value-based programs their own data on their disparities. Interestingly, some of them had their own data, and many of them had no data to understand their [in]equities. We gave them their own data and then we gave them all the other practices in the state, blinded of course, so they could see how they are performing relative to their peers.
The next step was that we entered an arrangement with the Institute for Healthcare Improvement here in Boston. We made a $25 million commitment to them to work with practices, including giving direct grants to each of the practices, first to establish the infrastructure they would need to collect data and then act on making improvements. Starting next year, subject to negotiation, we’re going to start to put equity measures in our AQC, in our value-based program, so that we can reward our practices for reducing, and hopefully over time eliminating, those inequities.
There is a business case to invest in health equity.
In closing, can you give us some insight into the vision for your health insurance company in a 5- to 10-year time frame that you might share with your board today?
Last year we did some analysis, surveying of our members. They called it ethnographic research, which I thought was probably a little overstated, but rather than online surveys or phone calls we actually sat in kitchens and living rooms with our members and asked them what they wanted from their health plan and what they wanted specifically from Blue Cross Blue Shield of Massachusetts. We were heartened to hear that they said, “We want your help when we’re in need of health care services.” The health care system, no surprise, is “scary, complex, expensive, fragmented,” and “we want you to be there to help guide us.” From that we took the phrase “trusted allies.” What they’re looking for in their health plan is a trusted ally.
So, while a health plan like Blue Cross will continue to pay claims, build networks, develop products, and work with employers, the future is going to be collaborating even more closely with our clinical partners in the health care delivery system to create and navigate health care experiences for our members. In some cases, that may be offering them new options. We just invested in and are partnering with a new company called Brightline, the first plan in the country to offer a new model for children’s mental health that tries to take care of the whole family and includes coaching, therapy, and prescribing where appropriate.
We’re going to offer some new models to our members, but we also understand that the vast majority of the care they’re still going to get in physicians’ offices and hospitals here in Massachusetts. We want to continue to collaborate closely with those clinical partners to create a differentiated experience for our members. That will keep us successful and thriving as a health plan and maintain that collaborative spirit that you talked about at the beginning, Tom, that is so distinctive and makes such a difference here in Massachusetts.
Andrew, I want to thank you for your time and all your good work. I do feel that Massachusetts is a special case in that we’re a relatively small state and we’re all concentrated together. The collaboration that that makes natural has made certain things possible that I do think are useful for the rest of the country. We have good quality in Massachusetts. We have the best coverage in the country. We are expensive, but we’re working on the cost issue with some success — not enough, but some.
Whatever success we’ve had, you personally and Blue Cross Blue Shield of Massachusetts definitely have been a key part of the secret sauce. So, thanks for all that. I look forward to your next act, your health plan’s next act, and I hope we’ll be talking with NEJM Catalyst readers about it along the way.
Thank you so much, Tom.