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New health-care payment system slows spending while improving patient care
Date:7/15/2011

In a new study with implications for state and federal efforts to reform payments to doctors and hospitals to encourage greater coordination of care, Harvard Medical School researchers found that a global payment system underway in Massachusetts lowered medical spending while improving the quality of patient care relative to the traditional fee-for-service system.

The study, published today in the New England Journal of Medicine, examined the Alternative Quality Contract (AQC), which was first introduced by Blue Cross Blue Shield of Massachusetts (BCBSMA) in 2009 and now includes more than a third of the insurer's provider network.

Among the study's findings:

  • The medical spending was nearly 2% lower among physicians and hospitals participating in the AQC compared with those working under traditional fee-for-service contracts.
  • Importantly, for physicians and hospitals with no previous experience in a global payment model, spending was 6% lower than that of providers in traditional fee-for-service contracts.
  • These year-one savings were largely the result of physicians changing referral patterns and shifting care to lower-cost facilities
  • By the end of year-1, quality of care among AQC providers was significantly higher than that of non-AQC providers in the BCBSMA network, especially for adults with chronic illness and for children.
  • Because the AQC contract shared savings with providers, rewarded providers for quality and, in some cases, include provider support for infrastructure development, the total dollars paid to AQC groups in the first year likely exceeded the savings achieved through reduced medical spending.
  • This outcome reflects the design of the AQC, which focuses on slowing the growth of spending and improving quality initially, rather than saving money in the first year.

"The finding of reduced spending, together with improved quality in year-one of the con
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Contact: David Cameron
david_cameron@hms.harvard.edu
617-432-0441
Harvard Medical School
Source:Eurekalert

Page: 1 2

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