Medicare beneficiaries enrolled in an early accountable care organization in Massachusetts showed a reduction in spending for their health care; however, there was not an improvement in the quality of care, according to a study published in the Journal of the American Medical Association.

“Our findings have several implications for payment and delivery system reforms,” J. Michael McWilliams, MD, PhD, from Harvard Medical School in Boston, stated in a press release. “In general, cost-reducing spillover effects of [accountable care organization] ACO contracts with one insurer on care for other insurers’ enrollees should signal a willingness among provider organizations generating the spillovers to enter similar contracts with additional insurers; they could be rewarded for the savings and quality improvements achieved for the other insurers’ enrollees.”

McWilliams and colleagues observed the effect the Blue Cross Blue Shield Alternative Quality Contract (AQC) in Massachusetts had on Medicare beneficiaries who were not enrolled in the contact, according to the abstract. The AQC was adopted by 11 provider organizations serving 1.7 million Medicare beneficiaries in the state between 2009 and 2010. The researchers used other provider organizations with Medicare beneficiaries who were not in the AQC as a control.


Patients in the AQC group spent $150 higher per quarter before entering the AQC. During the first year, there was no significant savings. However, there was a savings of $99 per beneficiary in the second year, which was mostly due to reduced spending on outpatient care, according to the abstract. Patients with five conditions or more were more likely to save more compared to patients with fewer conditions because of reduced costs for imaging, tests and procedures.


McWilliams JM. J Am Med Assoc. 2013;doi:10.1001/jama.2013.276302.

Disclosure: One of the authors (Landon) is a consultant for Active Networks, Navigenics, Massachusetts Medical Society, United Biosource and Research Triangle Institute. One of the authors (Chernew) is a board member for the Medicare Payment Advisory Commission and the Congressional Budget Office.

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