Value-Based Contracting and Blue Cross Blue Shield of Massachusetts

This case follows the journey of protagonist, Angie Benn, as she contemplates transitioning from her clinical role as a physician to health care management, by accepting a position with BCBSMA’s Value-Based Care team. BCBSMA is a leading player in the U.S. healthcare payer and administration ecosystem, holding the majority of health insurance market share in the affluent East Coast state of Massachusetts. Illustrating the principles and challenges of Value-Based Contracting using BCBSMA’s Alternative Quality Contract as a Case study, the case aims to capture the prevailing tensions within the health care value chain that make for robust and insightful discussion and debate. The case protagonist’s journey encapsulates the broader narrative of the evolution of healthcare systems from the transactional fee-for-service payment system toward VBC. In essence, VBC is a financial risk-share health care payment model, aimed at improving the quality of care, controlling costs, and enhancing access to care through increased affordability of healthcare services and products. VBC aims to align incentives between payers and providers through various financial risk-sharing mechanisms. VBC, focused on improving care outcomes, bears the advantage of being patient-centered. Through the protagonist’s perspective, the case delves into the operational, strategic, professional, and governance considerations of implementing a Value-Based Contract by a leading health insurance payer in Massachusetts. The case is set against the contextual backdrop of the state’s innovative health care landscape, progressive health care policies, yet very high healthcare costs. The broader challenges facing the U.S. healthcare system provide additional context.

The case may be taught to both master’s students in general management and/or healthcare programs, as well as senior industry executives in developed and developing global markets driving patient-centered, outcomes-based change projects. For both public sector leaders and private sector leaders, the case may be used for class discussions focused on structural, process, and cultural change, against a backdrop of measurement, analytics, and data-driven decisions for sustained impact. Depending on the nature of the course, the learning goals of a program, and the class audience, particular themes from the case may be selected as the focus. Therefore, the case is versatile and accords the instructor and learning session designer the opportunity for customization.