Global Payments Improve Quality, Reduce Spending

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Research results out of Harvard Medical School suggest that global payments could lower healthcare spending while improving healthcare quality.

Researchers from Harvard Medical School's Department of Health Care Policy analyzed two years of claims data from Blue Cross Blue Shield of Massachusetts's Alternative Quality Contract, a global budget program in which 11 healthcare providers were given a budget for episodes of care. This model is in stark contrast to the traditional fee-for-service model.

 



The researchers found AQC providers spent 3.3 percent less than fee-for-service groups in the second year. Similarly, AQC providers saw increased cost savings over time, from 6.3 percent in the first year to 9.9 percent in the second year. The researchers also found quality improvements in chronic care management, adult preventive care and pediatric care within the AQC program grew in the second year.

"Moving away from fee-for-service models is high on the agenda of those looking to establish a fiscally sustainable, efficient healthcare system," said Michael Chernew, professor of healthcare policy at Harvard Medical School and senior author on the study. "It is likely that this type of new payment model will grow rapidly in coming years in the nation as a whole, and particularly in Massachusetts. By analyzing this program, we're studying the future before it gets here."

More Articles on Global Payments:

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3 Hospital Leaders Discuss Unintended Consequences of the Affordable Care Act

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