A Health Affairs Web First study published yesterday examines the results of the Massachusetts Blue Cross Blue Shield Alternative Quality Contract. Under the AQC, BCBSMa pays provider organizations through multiyear contracts based on global budgets and pay-for-performance for achieving certain quality benchmarks, a model similar to the new Pioneer Accountable Care Organizations in Medicare. The AQC began in 2009 with seven organizations, and an additional four organizations joined in 2010.

Zirui Song, a medical degree candidate at Harvard, and coauthors analyzed the effect of the AQC on total medical spending over two years. They found that, compared to nonparticipating groups, savings were 1.9 percent in the first year and 3.3 percent in the second year. Savings were achieved through lower prices from shifting procedures, imaging, and tests to providers with lower fees, and through reduced utilization among some groups. The authors also analyzed the effect of the AQC on quality of care, finding that improvements in chronic care management, adult preventive care, and pediatric care were larger in the second year than in the first year.

“The increased slowing of spending growth from year one to year two suggests that global budgets may be an effective tool to use in helping control health care spending, but also that organizations need time to implement change,” conclude the authors. “Collectively, global budgets and pay-for-performance may provide a palatable set of incentives for provider groups to participate in delivery system reforms that encourage accountability and reduce waste….As global payment contracts expand across the country, supportive partnerships between payers and provider groups may help providers take accountability for spending while improving the quality of care for patients.”

The study population included Blue Cross Blue Shield of Massachusetts enrollees from January 2006 to December 2010, who remained with this program for at least one year. There were 428,892 subjects with at least one year of continuous enrollment and 1,339,798 control subjects. Overall, in 2009-10, statistical estimates indicated that patients whose practitioners were part of AQC organizations spent $22.58 less per quarter (2.8 percent) than patients in the control group. All organizations earned a 2010 quality bonus for meeting contractual goals.