Learning from the Alternative Quality Contract

A key challenge for NHS commissioning is to develop a 'golden thread' between commissioning decisions and changes in the behaviour of front line professionals.

Dr Rebecca Rosen is vice chair of Greenwich Health, the clinical commissioning group for the London Borough of Greenwich.
Dr Rebecca Rosen is vice chair of Greenwich Health, the clinical commissioning group for the London Borough of Greenwich.

Over the years, we have found many ways to achieve this at the margins, for example through commissioning additional services, creating financial incentives or leading service redesign initiatives. But we have not yet found a way to weave that golden thread through the whole health and care system.

In her recent presentation at a King’s Fund conference, Dr Dana Safran of Blue Cross Blue Shield of Massachusetts (BCBSMA) described the whole system ‘golden thread’ they have woven. The Alternative Quality Contract (AQC) was launched in 2009 as a mechanism to drive quality improvement and cost control for the BCBSMA Health Maintenance Organisation (HMO)-enrolled population.

AQC contract holders
Any type of provider organisation can hold an AQC contract so long as it includes primary care doctors with registered lists of patients around which to design and deliver care. The contract comes with a capitated budget (a fixed number of dollars per enrolled patient per year) and is linked to a carefully designed quality premium that rewards both quality of care and financial control.

Contract holders can keep more of their gains and take less of their losses if they are delivering higher quality care, while those delivering lower quality care bear more of their losses and keep less of their profits.

Crucially, the contract runs for five years, allowing time for providers to work out how to improve their clinical skills and design service innovation. And BCBSMA continue to work with providers during this time, negotiating selected high cost contracts on their behalf, supporting commissioning functions in smaller groups and providing information on performance.

Dana described how she and her colleagues locked themselves into a room for ten days to design an effective incentives system, outcome measures and assurance arrangements.

The contract has driven year-on-year quality improvements among participating providers and has reduced the healthcare inflation rate for BCBSMA HMO enrolees. And to the surprise of its creators, it has been taken up by 75% of eligible providers – becoming mainstream rather than alternative – but remains entirely voluntary.

Contrast this with the frenzied creation of commissioning plans, Quality, Innovation, Productivity and Prevention (QIPP) strategies and other proposals that characterise commissioning in the NHS.

The day-to-day life of commissioners is peppered with demands from somewhere else in the NHS to save millions, spend millions or report on progress at almost no notice. The plans are created in haste by bleary-eyed commissioners with minimal contact with the frontline professionals they will affect, and plans created one day must be revised up or down a few days later.

And once sent to a higher echelon of the NHS they may be merged with other plans from neighbouring commissioners. By the time they reach the providers whose work they are meant to influence, there is little chance of finding the golden thread within them.

What could we learn from the BCBSMA approach?
First, it’s simplicity. It is focused, easy to communicate and uses a single mechanism to drive change in multiple areas of healthcare. Second, the sophisticated link between quality improvement, financial control and a clear element of risk as well as gain for participating clinicians.

Third, it is not prescriptive in terms of scale or approach. BCBSMA leaves providers to decide how to achieve these improvements. Finally, the five-year timescale on which the contract operates – an experiment in 'letting go' and allowing some commissioners to test the issues out would be very welcome.

  • This is the first in a series of occasional blogs from the Nuffield Trust’s resident GP commissioner. Nuffield Trust senior fellow Dr Rebecca Rosen is vice chair of Greenwich Health, the clinical commissioning group for the London Borough of Greenwich.  She is also a GP in Woolwich, South East London.

This blog is also available on the Nuffield Trust website.

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