New Study: Innovative System for Paying Health Care Providers Slows Spending, Improves Patient Care

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<p>Findings from a Harvard University <a href="/publications/journal-article/2011/jul/health-care-spending-and-quality-year-1-alternative-quality">study</a> conducted with Commonwealth Fund support reveal that a recently implemented global payment system for physicians and hospitals in the Blue Cross Blue Shield of Massachusetts network is lowering medical spending and improving the quality of patient care. </p>
<p>Published online yesterday by the<em> New England Journal of Medicine,</em> the study examined performance in the first year of the five-year Alternative Quality Contract (AQC), which replaced traditional fee-for-service payment. Providers participating in the AQC are paid a comprehensive, global payment covering the entire spectrum of patient care, including inpatient, outpatient, rehabilitation, long-term care, and prescription drugs. In addition, they are eligible for a performance bonus if certain quality targets are met. </p>
<p>According to the researchers, the AQC caused changes in physician referral patterns—ACQ patients were referred to providers that charged lower fees. The new payment model was also associated with improvements in the quality of adult chronic care and pediatric care, which likely resulted from a combination of the AQC's substantial financial incentives and data support from Blue Cross Blue Shield. <br /><br /></p>