I was fortunate to be able to listen to Danna Safran from Blue Cross Blue Shield (BCBS) of Massachusetts at a recent King’s Fund conference. She was talking about the alternative quality contract (AQC). Double digit inflation in healthcare costs and a mandate for every individual to have insurance in Massachusetts drove BCBS to think hard about how to reduce costs whilst maintaining or, even better, improving quality. Sound familiar?

What she described was a concept that might have applicability in the context of the NHS. The AQC is a five year contract awarded to provider organisations that must, as a basic, start with primary care. They take on accountability for the cost and quality of care across the continuum of care—regardless of where the patient gets treated. The contract is for a global budget with 10% being linked to quality. Quality is measured across the system in both ambulatory and hospital settings and includes process measures, patient experience, and outcome measures. Performance against these quality measures is rewarded across a continuum with five gates and payments are skewed to reward early improvement and subsequently step change. The really interesting aspect of AQC is that the level of quality achieved is also linked to the overall use of resources. An alternative quality contractor can only keep 20% of any surplus if they are at the lower end of the quality continuum. The greater the level of quality delivered—the greater the surplus they can retain. The converse applies if they run a deficit in-year.

The impact on the organisations that have taken up the AQC is that they have an incentive to keep a population healthy. The five year contract means they also have the timeframe to reconfigure and redesign. All of them are investing in primary care and the supporting infrastructure to proactively manage the population for which they are responsible.

Listening to the presentations and the discussion that followed made me think about whether we could adapt and adopt a similar approach in the NHS? To do so would, however, require a first step that, so far, has been avoided. The NHS has focussed on hospitals and transforming community and mental health services. Is it time to acknowledge and realise that if we are to really change the way in which we deliver healthcare, to take full advantage of modern technology and treatments, then the way primary care organises itself and behaves needs to change? Could piloting an alternative quality contract, with a coalition of practices who are willing to federate, start transforming primary care?  Could that be piloted within large CCGs using localities—or do we have to wait for the next set of reforms?

Martin McShane qualified in 1981 from University College Hospital Medical School. He trained in surgery until 1990 then switched to general practice where he spent over a decade working in a semi-rural practice on the edge of Sheffield. In a fulfilling job, with a great lifestyle, he decided to give it all up and take on a fresh challenge. He entered NHS management, full time, in 2004 as a PCT chief executive after experience in fund holding and chairmanship of both a primary care group and subsequent professional executive committee. Since 2006 he has been director of strategic planning for NHS Lincolnshire, where there are 5,600 miles of road but less than 50 miles of dual carriageway.