In 2009, Blue Cross Blue Shield of Massachusetts introduced a payment reform model called the Alternative Quality Contract (AQC). The AQC employs a population-based global budget coupled with significant financial incentives based upon performance on a broad set of quality measures. The twin goals of the AQC are to significantly reduce health care spending growth while improving quality and health outcomes. The AQC is one of the largest commercial payment reform initiatives in the United States and includes over three-quarters of Blue Cross Blue Shield of Massachusetts’ overall network of contracted primary care providers and specialists who care for about 665,000 HMO members as of October 2012. Results of the AQC to date, including those from a formal evaluation conducted by Harvard Medical School researchers as well as the more qualitative experiences of the health plan and its provider network, suggest several important lessons for future payment reform.
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