• Zirui Song, Sherri Rose, Dana G Safran, Bruce E Landon, Matthew P Day, and Michael E Chernew.
• From the Department of Medicine, Massachusetts General Hospital (Z.S.), Department of Health Care Policy, Harvard Medical School (Z.S., S.R., B.E.L., M.E.C.), Blue Cross Blue Shield of Massachusetts (D.G.S., M.P.D.), the Department of Medicine, Tufts University School of Medicine (D.G.S.), and the Department of Medicine, Beth Israel Deaconess Medical Center (B.E.L.) - all in Boston; and the National Bureau of Economic Research, Cambridge, MA (Z.S., M.E.C.).
• N. Engl. J. Med. 2014 Oct 30; 371 (18): 1704-14.

BackgroundSpending and quality under global budgets remain unknown beyond 2 years. We evaluated spending and quality measures during the first 4 years of the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC).MethodsWe compared spending and quality among enrollees whose physician organizations entered the AQC from 2009 through 2012 with those among persons in control states. We studied spending changes according to year, category of service, site of care, experience managing risk contracts, and price versus utilization. We evaluated process and outcome quality.ResultsIn the 2009 AQC cohort, medical spending on claims grew an average of $62.21 per enrollee per quarter less than it did in the control cohort over the 4-year period (P<0.001). This amount is equivalent to a 6.8% savings when calculated as a proportion of the average post-AQC spending level in the 2009 AQC cohort. Analogously, the 2010, 2011, and 2012 cohorts had average savings of 8.8% (P<0.001), 9.1% (P<0.001), and 5.8% (P=0.04), respectively, by the end of 2012. Claims savings were concentrated in the outpatient-facility setting and in procedures, imaging, and tests, explained by both reduced prices and reduced utilization. Claims savings were exceeded by incentive payments to providers during the period from 2009 through 2011 but exceeded incentive payments in 2012, generating net savings. Improvements in quality among AQC cohorts generally exceeded those seen elsewhere in New England and nationally.ConclusionsAs compared with similar populations in other states, Massachusetts AQC enrollees had lower spending growth and generally greater quality improvements after 4 years. Although other factors in Massachusetts may have contributed, particularly in the later part of the study period, global budget contracts with quality incentives may encourage changes in practice patterns that help reduce spending and improve quality. (Funded by the Commonwealth Fund and others.).

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