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Lower- Versus Higher-Income Populations in the Alternative Quality Contract: Improved Quality and Similar Spending

healthcare people


In 2009, Blue Cross Blue Shield of Massachusetts launched a population-based payment arrangement called the Alternative Quality Contract (AQC), which financially rewards physicians for improving the quality of patient care and holds them accountable for medical spending. Physicians who come in under budget by efficiently managing their patient populations share in the financial savings, while physicians who come in over budget must help cover the extra costs.

Past research has shown that the AQC improves quality scores and lowers overall spending. Commonwealth Fund–supported researchers explored whether the model also mitigates health disparities by boosting the quality of care provided to disadvantaged populations.

What the Study Found

The researchers evaluated changes in quality performance and medical spending over a four-year period, comparing the impact on patients living in lower- and higher-income areas of Massachusetts. They found:

  • Process metrics, such as those assessing whether patients with diabetes receive a yearly eye exam, improved 1.2 percentage points more for patients living in lower socioeconomic areas than those living in higher ones.
  • Adult preventive and pediatric process measures showed the greatest improvement for lower-socioeconomic enrollees.
  • Outcome metrics, including blood pressure readings for patients with high blood pressure, improved at the same rate for both groups.
  • Medical spending was similar in both groups after adjustments.


The AQC helped narrow health disparities between enrollees living in lower- and higher-socioeconomic areas. The AQC’s substantial financial incentives may have enabled providers to invest in outreach programs and other resources to help improve the health of disadvantaged populations.

Publication Details



Mary Mahon, Former Vice President, Public Information, The Commonwealth Fund

[email protected]


Zirui Song et al., “Lower- Versus Higher-Income Populations in the Alternative Quality Contract: Improved Quality and Similar Spending,” Health Affairs 36, no. 1 (Jan. 2017): 74–82.