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New Research on the Impacts of the Alternative Quality Contract

A growing number of health care purchasers are looking to combine incentives for providers to reduce spending (e.g., through global budgets) with incentives to improve quality (e.g., through pay-for-performance bonuses). Recent Commonwealth Fund–supported research examines the effects of one such payment approach, the Alternative Quality Contract, which was implemented by Blue Cross Blue Shield of Massachusetts in 2009 among 11 hospitals and seven organizations representing 321 primary care practices.

  • One study (Pediatrics, Jan. 1, 2014), by Alyna T. Chien, M.D., of Boston Children's Hospital and colleagues, found that the Alternative Quality Contract improved the quality of preventive care for children, particularly benefiting those with special health care needs. It did not, however, slow health care spending in its first two years of implementation. 
  • Another study (Academic Emergency Medicine, Sept. 2013), by Adam L. Sharp of the University of Michigan and colleagues, found no significant difference in emergency department use between patients whose primary care physicians enrolled in the Alternative Quality Contract and those who did not. Physicians were not rewarded for reducing inappropriate emergency department use. 
  • third study (Healthcare, June 2013), by Zirui Song of Harvard Medical School and colleagues, found that the contract reduced spending on overused, lower-value medical services—cardiovascular services and imaging services. Some of the reduced spending resulted from shifting referrals to less expensive providers, but practices were also able to reduce utilization.

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