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Fwd: qotd: AcademyHealth's ill-judged choice of the 2013 Article-Of-The-Year

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Subject: qotd: AcademyHealth's ill-judged choice of the 2013
Date: Fri, 21 Jun 2013 06:12:53 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

email message
From: Health Affairs <
Date: Thu, Jun 20, 2013 at 4:37 PM
Subject: Health Affairs Wins AcademyHealth's 'Article-of-the-Year' Award

AcademyHealth has chosen a Health Affairs article as its
2013 Article-Of-The-Year!

The 'Alternative Quality Contract,' Based On A Global Budget, Lowered
Medical Spending And Improved Quality
By Zirui Song, Dana Gelb Safran, Bruce E. Landon, Mary Beth Landrum,
Yulei He, Robert E. Mechanic, Matthew P. Day and Michael E. Chernew
Web First July 11, 2012; print August 2012


Health Affairs
August 2012
The 'Alternative Quality Contract,' Based On A Global Budget, Lowered
Medical Spending And Improved Quality
By Zirui Song, Dana Gelb Safran, Bruce E. Landon, Mary Beth Landrum,
Yulei He, Robert E. Mechanic, Matthew P. Day and Michael E. Chernew


Seven provider organizations in Massachusetts entered the Blue Cross
Blue Shield Alternative Quality Contract in 2009, followed by four more
organizations in 2010. This contract, based on a global budget and
pay-for-performance for achieving certain quality benchmarks, places
providers at risk for excessive spending and rewards them for quality,
similar to the new Pioneer Accountable Care Organizations in Medicare.
We analyzed changes in spending and quality associated with the
Alternative Quality Contract and found that the rate of increase in
spending slowed compared to control groups, more so in the second year
than in the first. Overall, participation in the contract over two years
led to savings of 2.8 percent (1.9 percent in year 1 and 3.3 percent in
year 2) compared to spending in nonparticipating groups. Savings were
accounted for by lower prices achieved through shifting procedures,
imaging, and tests to facilities with lower fees, as well as reduced
utilization among some groups. Quality of care also improved compared to
control organizations, with chronic care management, adult preventive
care, and pediatric care within the contracting groups improving more in
year 2 than in year 1. These results suggest that global budgets with
pay-for-performance can begin to slow underlying growth in medical
spending while improving quality of care.

From the Discussion

In year 1, total Blue Cross Blue Shield payouts to groups in the
contract probably exceeded savings under the global budget. In year 2,
savings achieved by the intervention group were generally larger than
the surplus payments received. However, total payments to groups from
Blue Cross Blue Shield of Massachusetts, including surplus sharing,
quality bonuses, and infrastructure support, probably exceeded the
savings achieved by most groups that year. This outcome reflects the
design of the contract, which set targets based on actuarial projections
to save money over its five-year duration, accounting for anticipated
quality bonuses and other payments.

In addition, health care spending growth in Massachusetts slowed in this
period as a result of general economic factors.

This model is informative for the broader movement toward accountable
care organizations.

Published response:

Misleading Title And Abstract
By Kip Sullivan

In this article about the effect of the Alternative Quality Contract
(AQC) administered by Blue Cross Blue Shield of Massachusetts (BCBS),
the authors reported savings in what they variously referred to as
"medical spending" and just "spending," but they also reported that
non-medical payments to providers ("surplus sharing, quality bonuses,
and infrastructure support") "probably" exceeded the savings in medical
spending. They concluded: "Our findings do not imply that overall
spending fell" (p. 1891).

In an earlier paper published in the New England Journal of Medicine,
these authors offered the identical caveat.

Despite the authors' warnings, Health Affairs' editors permitted the
phrase "lowered medical spending" to appear in the title of the paper,
they permitted the unadorned word "spending" to appear numerous times in
the abstract and text, and they failed to include in the title or the
abstract the warning that "overall spending" (medical plus nonmedical
costs) probably rose. This combination of errors was extremely misleading.

Health Affairs' editors compounded these errors by permitting authors of
two papers published in the next edition (the September edition) to make
misleading statements about Song and colleagues' article. Citing them,
Markovich asserted that the AQC "slowed the...growth in medical
spending" (p. 1974), and Sood and Higgins claimed the AQC has
"demonstrated...a slowdown in the growth rate of health care spending"
(p. 2043). Neither paper warned readers that medical spending is not
synonymous with total spending, and that BCBS's total spending may have
gone up.

In a letter to the editor published in the November edition of Health
Affairs, Rachel Nardin et al. criticized Song et al. for inserting
"lowered medical spending" into the title when in fact total spending
probably rose. In their reply, Song and Chernew agreed that "total
payments are important" and that they probably rose. But rather than
simply conceding that their title and abstract were misleading and that
a few simple edits would have fixed the problem, Song and Chernew
presented an illogical justification for confusing readers about the
difference between medical and total spending. They argued that the need
to know how providers respond to the AQC somehow justifies conflating
medical with total spending. There is no justification for such an
easily avoidable error.

Finally, I note that Song et al. made no effort to measure the cost to
the providers of participating in the AQC, or if they did, they did not
inform their readers of the outcome of this effort.

The three Health Affairs articles I have cited here are not isolated
examples of scholars and editors downplaying or totally ignoring
administrative or intervention costs and blurring the distinction
between medical and total spending. This problem has plagued the health
policy literature for four decades. It reached epidemic proportions in
the 1990s.

There is an illogical but widespread assumption within the health policy
community that if an intervention, such as the AQC, lowers medical
spending, it must also have lowered total spending. But interventions
designed to change provider behavior, be they HMOs, pay-for-performance
schemes, electronic medical records, utilization review, or "medical
homes," are not free. They create new costs for both insurers and
providers. Ignoring these costs, or obscuring them by celebrating
reductions in medical spending and saying little or nothing about
increases in total spending, should be no more acceptable than ignoring
the side effects of drugs and procedures.


Health Affairs
November 2012
Medical Spending And Global Budgets
By Rachel Nardin, David Himmelstein and Steffie Woolhandler

The title of the article by Zirui Song and colleagues (Aug 2012) claims
that "The 'Alternative Quality Contract,' Based on a Global Budget,
Lowered Medical Spending and Improved Quality." But the Alternative
Quality Contract (AQC) only lowered spending if you accept the authors'
idiosyncratic definition of the term medical spending.

In calculating medical spending, the authors exclude three categories of
payments that Blue Cross Blue Shield of Massachusetts made to AQC
providers: "surplus payments" to providers who kept fee-for-service
billing below targets; bonuses for meeting quality goals; and special
payments to support providers' infrastructure to implement the AQC. The
authors note, in passing, that these extra payments probably exceeded
the "medical" savings. Unfortunately, they report no actual figures for
the extra payments (although these figures were presumably available to
the two coauthors who are executives at Blue Cross Blue Shield). In
other words, Blue Cross Blue Shield's total costs under the AQC went up
by some undisclosed amount, not down.

Global budget payment strategies are currently being promoted as a way
to lower total health care costs. The fact that the AQC failed to do
this was probably overlooked by many readers and was clearly lost in
media reports of these findings and hence in the policy debate.

The case for global budget payment strategies such as the AQC remains

Comment: The health policy community has hung its hat on accountable
care organizations as being the be-all and end-all for reducing spending
and improving quality in health care. Little does it matter that there
is a dearth of objective evidence for this concept; they have continued
to push it anyway in their support for the Affordable Care Act.

The ultimate gall of the policy community is shown in their selection of
this article by Song et al, trumpeting the savings of this Massachusetts
Blue Cross Blue Shield Alternative Quality Contract, when, buried in the
article, we learn that the savings were burnt up by "surplus sharing,
quality bonuses, and infrastructure support."

Although the program costs, including additional administration, wiped
out the medical savings, it is important to look at what the actual
medical savings were. These savings were primarily due to "lower prices
achieved through shifting procedures, imaging, and tests to facilities
with lower fees." There was virtually no accountable care magic here.
They merely extracted better prices from some of the providers. At that,
it was only 2.8 percent, a negligible amount when considering how much
more effective publicly administered pricing is than pricing through
private insurers. But, again, the all important bottom line is that this
savings was lost through the non-medical costs of the program.

This AcademyHealth award should serve as a proxy for the compromised
integrity that the policy community has shown in their efforts to push
the highly flawed Affordable Care Act.

These authors, along with the Health Affairs editors who approved the
misleading title, and the committee members who selected this article
for the award are no doubt good people, but they did not have the
courage to stand up and say, "This conclusion is (expletive deleted)!"

We know what they should have said: "Although we have shown that the
promise of the accountable care organization is not fulfilled,
nevertheless we do know how to control spending while improving quality
and that is through the enactment of a single payer national health
program." But, no, they didn't have the courage.

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