Exclusive interview: BCBS Association leader describes quality innovations among Blues plans

Finding ways to manage rising healthcare costs while improving the quality of care is on the minds of payers, especially as the industry prepares for an influx of members when reform provisions take effect in 2014.

With quality as a new definition of insurer success, the Blue Cross Blue Shield Association (BCBSA) created a national position that addresses quality and cost among all of its health plans.

Greg Pawlson, the new Executive Director of Quality Innovations at BCBSA, recently chatted with FierceHealthPayer about opportunities for quality improvement in the post-reform environment and how Blue Cross Blue Shield plans can use quality innovations to bend the cost curve.

FHP: As the first Executive Director of Quality Innovations, what are your current challenges and quality goals?

GP: I think the position was created as a way of tying together a lot of the ongoing quality work, which has been going on for years in the Office of Clinical Affairs and Strategic Services and other branches of the Chicago office of BCBSA. The policy office of Washington is obviously focused on federal and, to some extent, state initiatives in healthcare and hadn't had a clinical quality presence in the past. This position was created to bridge, enhance, and recognize that quality--and even more than the quality, trying to push for quality at an affordable cost in the healthcare system--is certainly on everybody's mind now. And if the last week isn't a reminder of that, than I don't know what was.

FHP: Are other insurance organizations creating positions specifically related to quality initiatives?

GP: There certainly are a lot of positions related to quality in health plans; few are in the associations. The reason I found the Blue Cross position really intriguing is that the interface between healthcare research and best practice and best evidence, and healthcare practice--the science and standards and so on--are often national. But because of very different aspects and characteristics of local delivery systems, you really have to take those into account when you're trying to reduce hospital infections or the number of readmissions or improve the care of diabetics. The way that you're going to do that is going to be different, especially when you're looking at interactions between insurers and providers in rural Mississippi or in Texas versus Massachusetts or Minnesota. So the Blues system is really, I thought, ideal to be in a position to really push further into the quality and value area by having that capacity.

I'm going to be working at the national level on standards and working with public sector initiatives and helping local plans translate that into something that's going to be effective for them. And that's not an insignificant challenge.

FHP: What national initiatives from the National Committee for Quality Assurance (NCQA) apply to BCBSA and other insurers to improve safety and quality?

GP: NCQA was sort of a healthcare quality evaluator, if you will. One of the things that has happened because of NCQA is that we know more about the quality of health plans, and the Blues plans do quite well in both the NCQA-accreditation and in the reporting of HEDIS measures. That is a good illustration of why it's important to have the local interface as we try to influence quality more and try to squeeze waste of out the system. If we don't do that, we're just going to have a huge, ever-increasing number of uninsured people because everyone's not going to be able to afford insurance. We've got to work with clinicians, and we've got to work with hospitals. And we can't do that on the national level. We can't call them and say, "You guys have got to do this." That takes work every day, every week, with the clinicians in the healthcare practice itself. When you look at initiatives--and nearly every Blues plan in the country has a major initiative going on in some facet of patient safety--that BCSBA launched, virtually every plan in the county is doing something, and they're shaping it to the local environment.

FHP: What are some safety and quality initiatives in the works at BCBS companies?

GP: Another interesting thing I found out in the month I've been at Blue Cross Blue Shield is there's a lot of sharing between plans. For example, one entity like Massachusetts has the Alternative Quality Contract, in which they're now incenting group practices to provide higher quality and to look at their costs and reduce waste. That is shared over several internal websites; they put up a tool kit and information, and that happens in all sorts of ways. Michigan has over 1,000 practices now in the medical home program. There's always the dissemination of quality innovations from one Blues plan to another. Again, each one often has to adapt that to local conditions. In some places, you may have a very active hospital collaborative with purchasers and employers that you can jump into and support. But in other places in the country, it's working with one hospital or five hospitals at a time because you just don't have that structure.

FHP: How will BCBSA use quality innovations to control rising healthcare costs?

GP: I gave a talk the other day, and I quoted the recommendations that healthcare should be levered in groups of physicians, nurses, pharmacists, and dentists, not by individuals. That payment should be in some kind of bundle or capitated in a way that there should more emphasis on primary care and on social and behavioral determinates of health in order to control costs. And that was made in 1932 by the Committee on the Cost of Healthcare; we haven't quite figured it out yet.

I think what's really important now is we have some opportunities. Plans know more about how to grab structure benefits in a more effective way in order to engage patients more, to understand how they're adding. The cost and quality issue, we're all responsible for it. We can't point fingers and say, "It's the doctors, it's the health plans, it's the patients." It's all of us who have gotten into some difficult habits. And if we're going to solve this, we're going to have to work together to get it figured out so that health plans can work with purchasers to design benefits that are going to patients aware of costs and get patients information so they can choose, especially if they have co-pays or deductibles that put their own money in. "Here's something that's half the cost and higher quality; do you want to choose that?"

And at the same time to be able to pay clinicians not just on the basis of volume but on the basis on what value they're actually delivering. What is the quality and how much are they charging for that, and are they giving the patient a good deal?

Because the sad thing is that plans are always getting blasted for being the bad guys, and yet when we really look at it, they're the agent that tries to take money that the purchaser and employer and consumer give for insurance and get the best deal that they can.

So I think we're in an area where we have a lot more tools than we did before, in terms of analyzing and understanding variation of price and volume, that we can start to get out. And we know some ways. That's where quality and cost interface.

Quality--at least if you define it by doing the right thing at the right time for the right person--is almost always less expensive. Now, there are other definitions of quality that clearly say you can spend more, and there are circumstances. If you're going to take better care of kids with asthma and those kids right now are not getting optimal care, you may have to spend more on medications and so on for that group than before. But that is getting value from the system. Whereas providing somebody something that is a very marginal benefit and defining that as higher quality is going to cost a lot more, and it doesn't give you any real value for the money.

So I think we're entering a very interesting time, partly precipitated by our financial crisis, in which we're really asking--and having some data to try to answer--some tough questions of how do we get value out of the healthcare system the way we feel we get value out of a lot of other things that we buy.

FHP: What role should health insurers play in national efforts to transform the healthcare system? How big of a role do they play?

GP: The Blue Cross Blue Shield Association and the plans are doing an incredible amount of work to try to understand how we can function effectively under what is now the law of the land. Some people may have issues with it, but at least for right now, the Affordable Care Act is law. There is a huge amount of time and effort being spent to respond to all the provisions of that law, three or four which relate to quality reporting by health plans, and hundreds of them relating to the new state exchanges. All of those have to be understood and turned into real programs, and a lot of that will fall on health insurance companies.

FHP: What can we expect in the next five to 10 years in the industry?

GP: We don't even know if the Affordable Care Act is going to survive. The House is already Republican, the Senate is very likely to go Republican, and no president has ever been reelected with financial indicators the way they are now. So if the President is not reelected and the Senate and House are both Republican, we may see a repeal. Hopefully, some of the hard work that's gone into things to date won't all disappear. Maybe some states will continue with healthcare exchanges. But I think it's just really hard to tell.

One thing we do know is that the pressure on cost is very likely (99 percent probability) to continue and probably worsen, especially if the economy goes. Healthcare costs seem to rise at a fixed rate, and if the GDP is declining or flat, the gap between healthcare expenses and the GDP gets bigger.

One thing we're working on very hard is to get more useable, useful information. There's a huge amount of work that BCBS plans do with analytics and analyzing their data [including] information for consumers, such as which doctors appear to be providing more value. For purchasers, [information will help improvements] in terms of ways of creating networks of clinicians and hospitals that could allow a much lower premium to be charged than having every provider in it or having very expensive providers.

Proving that information and allowing real choice is going to be a huge push in the industry. It's not perfect, but the more we do it, the closer we get. And it doesn't have to be everybody. The car industry was transformed by a few people choosing cars that were safer. So that's what we would like to be able to do.

This interview has been edited and condensed for clarity.