Carlson School of Management News

Harvard's Michael Chernew to Speak March 19

Monday, March 05, 2012

Michael Chernew, professor of health care policy at Harvard Medical School, will present "Evaluating the Alternative Quality Contract Research Update" Monday, March 19, from 2:00 to 3:30 p.m. in 2-206 Carlson School.

In 2009, Blue Cross Blue Shield (BCBS) of Massachusetts implemented a global payment system called the Alternative Quality Contract (AQC). Provider groups in the AQC assume accountability for spending, similar to accountable care organizations that bear financial risk. Moreover, groups are eligible for quality bonuses.

Analyzed by Chernew were 2006-09 claims for 380,142 enrollees whose primary care physicians (PCPs) were in the AQC (intervention) and 1,351,446 enrollees whose PCPs were not (control). Chernew's findings showed that average spending increased for both AQC and non-AQC enrollees in 2009, but the increase was smaller for AQC enrollees. Savings largely derived from shifts in outpatient care toward facilities with lower fees; from procedures, imaging, and tests; and from subjects with highest expected spending. All AQC groups met 2009 budget targets and earned surpluses. Total BCBS payments to AQC groups, including quality bonuses, likely exceeded the estimated year-one savings. The AQC was associated with modest slowing of spending growth and improved quality in 2009 and the long-run AQC impact on spending growth depends on future budget targets and providers' ability to further improve efficiencies in practice.

This free event is sponsored by the Medical Industry Leadership Institute, the Department of Health Policy and Management, and the School of Public Health.

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