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The U.S. health system has been evolving over the past decade to focus on the quality and value of care. Until recently, though, value-based payment models have not explicitly addressed longstanding racial and ethnic inequities in care.

This month, Blue Cross Blue Shield of Massachusetts, the not-for-profit health plan I lead, introduced a value-based payment model that will reward clinicians for closing equity gaps, starting with areas including colorectal cancer screening, blood pressure control, and diabetes care. Four of the largest health systems in Massachusetts have signed these contracts, the first of their kind.


We will be sharing our methods and learnings to support other payers across the U.S. that are eager to contribute to a more equitable health system.

Developing the program

In close collaboration with the medical community, BCBSMA gradually built its value-based payment model over the past 18 months, guided by two simple principles: Health inequities must be eliminated, and no change is meaningful unless it can be measured.

We started in 2021 by auditing racial and ethnic inequities in care among 1.2 million BCBSMA members. These data were transparently published, and confidential reports were shared with every health system the organization works with so they could see disparities in care provided in their own hospitals and physician practices. These data will continue to be published annually.


BCBSMA funded an Equity Action Community, administered by the Institute for Healthcare Improvement, to support clinicians in the value-based network in reducing health inequities among their patients — including those not covered by BCBSMA. That support includes encouraging gold-standard self-reported data collection practices among providers. In 2022, feedback from the community helped shape the new payment model.

BCBSMA also funded $16 million in Institute for Healthcare Improvement grants in 2022 to help Massachusetts physician practices and hospitals immediately address disparities with concrete action. For example, a clinical group might aim to reduce the gap in diabetes preventive care by increasing the availability of nutritionists. Or they might seek to reduce the gap in blood pressure control through expanding access to community health workers, deploying a mobile community health van to screen people for high blood pressure, or offering home blood pressure cuffs to promote self-monitoring.

Shaping the new contracts

We made several important design choices in the value-based payment contracts.

First, these contracts promote collaboration. Typically, value-based contracts pay for performance against the average of provider groups in a network. That creates a level playing field, but it also means that groups could be incentivized to keep effective innovations proprietary because, if they publicize their approaches, average performance may rise and they may not recoup their investment.

In BCBSMA’s pay-for-equity program, clinical groups are measured only against their own historical performance. That removes any potential penalty for collaboration — and such collaboration is actively encouraged through the Equity Action Community. It also removes any chance of penalizing clinical groups that serve more diverse patient populations.

Second, there is no reward if an equity gap closes due to declining performance in one or more demographics. The value-based program does not incentivize the improvement of one racial or ethnic group at the cost of another.

Third, the program rewards health systems for collecting and sharing more comprehensive and accurate race and ethnicity data.

Fourth, the value-based payment contracts are built to evolve. They reward improvements that take time to achieve and will accommodate changes in provider group structure and patient populations. The model can adapt as new member categories or dimensions of equity beyond race and ethnicity are added, such as sexual orientation, disability status, or other measures.

Fifth, the goal is to create a more equitable system for all patients, not just BCBSMA members. The organization intends to share learnings and harmonize the design with other payers’ equity-based models as they take shape in coming years.

Sixth, we will ensure that this work is measurable and BCBSMA is accountable for it: the Center for Healthcare Organization and Innovation Research at the University of California Berkeley School of Public Health will evaluate and track progress, funded by an independent grant from The Commonwealth Fund.

Our organization’s original value-based Alternative Quality Contract took shape more than a decade ago through long and careful collaboration with local physicians eager to do what was best for their patients. It became a national model.

My colleagues and I believe that these equity-based provisions are the most significant change in value-based care since the introduction of the Alternative Quality Contract. Spurred by the tragic disparities that have been laid bare by the Covid-19 pandemic, this model is taking shape with an equal degree of collaboration — but far more swiftly.

BCBSMA is dedicating significant financial and human resources to this endeavor. We will share it as widely as possible with other payers in coming years to help build a health system that is affordable and high-quality for all Americans, of every race and ethnicity.

It is ambitious to aim for the elimination of health care inequities. But it would be wrong to aim for less.

Andrew Dreyfus is the president and CEO of Blue Cross Blue Shield of Massachusetts, a not-for-profit health plan that provides health insurance for 2.8 million people.

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