The Payer Perspective on COVID, Value Based Care and More with Blue Cross Blue Shield of Massachusetts’ Chief Commercial Officer, Patrick Gilligan

Before the term Value Based Care existed, Blue Cross Blue Shield
of Massachusetts (BCBSMA) unveiled one of the nation’s first
risk-based payment models – its Alternative Quality Contract
(AQC). Patrick Gilligan joined BCBSMA in 2007 to oversee the
AQC’s rollout after spending nearly 14 years negotiating
contracts on the provider side at Partners Healthcare (now Mass
General Brigham). He left BCBSMA for a three year stint at CVS,
where he led health system alliances, and is now back at
Massachusetts’ largest private insurer as chief commercial
officer where he is responsible for all market-facing functions
for the health plan and its 2.8 million members.

This episode of Healthcare is Hard taps into Pat’s unique view of
the healthcare market that spans payer, provider, and
pharmacy/PBM. He talks to Keith Figlioli about the market factors
influencing the cost and quality of healthcare, and shares a
payer’s perspective on current challenges and the path ahead.
They dive into a number of topics including: 



The downstream impact of deferred care: While the
COVID-19 economy translated into nationwide job losses – and
therefore a reduction in BCBSMA’s membership – the slowdown in
elective services is the more challenging, complex, and
long-term issue for payers. Like many other payers, BCBSMA
issued rebates to its customers and members in 2020 as a result
of lower than anticipated health care costs during the COVID-19
public health emergency. Pat talks about the necessity of
managing risk over the long term and the expectation for higher
future costs that all payers will have to navigate.


Elements of VBC success: When Pat first joined BCBSMA to
introduce the Alternative Quality Contract (AQC) to providers,
he insisted on sharing both upside and downside risk from the
outset. Pat credits the universal approach to risk sharing as
an element of AQC’s success. He also points to the long-term
nature of the contracts BCBSMA offers to providers. A
traditional one- or two-year contract can make it difficult for
providers to fundamentally change their business – particularly
as government rules change – so BSBSMA has entered into three-,
five-, and even seven-year AQC agreements. Lastly, he talks
about the importance of sharing data, identifying gaps in care,
and truly working together once payer and provider interests
are aligned.


Unintended consequences of integrated models: As the
lines blur between payer and provider, Pat warns of the
potential for losing sight of the mission to improve
affordability and quality. He uses pharmacy benefits managers
(PBMs) as an example, and how a company like CVS which is
traditionally a pharmacy that now operates an integrated model,
will make more money prescribing than managing care. He talks
about being careful to not deviate too far from what the
expertise of a health plan should be and always focusing on the
best interest of employers and customers.


The end goal of experience: Throughout the conversation,
Pat returns frequently to the theme of patient/member
experience. He talks about driving better experiences through
deeper partnerships and how every player in the market offers
something important. This includes payers and providers
recognizing each other’s core competencies, but also
considering where consumer-savvy and digital-first managed care
providers are trying new approaches that everyone can learn
from.



To hear Patrick and Keith talk about these topics and more,
listen to this episode of Healthcare is Hard: A Podcast for
Insiders.