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Blue Cross Blue Shield of MA Encourages All To Take Steps For Better Health At Work

New contract gains momentum as it answers President Obama's call to pay for quality of patient outcomes while moderating cost of care

BOSTON — May 11, 2009 — Blue Cross Blue Shield of Massachusetts, Inc. (BCBSMA) today announced it has signed Lowell General Hospital and the affiliated Lowell General Physician Hospital Organization to the new five-year Alternative Quality Contract (AQC). The AQC is designed to improve the quality of care our members receive and cut current annual medical cost trends in half.

The Lowell General Physician Organization comprises of approximately 260 physicians which impacts close to 24,000 BCBSMA members.

"The AQC is a contract that rewards physicians for the quality rather than the quantity of care they provide. This is not your typical volume-based fee-for-service contract, nor is it a return to capitation models of the 1990s. The AQC brings an entirely new approach to how we pay for health care—an approach that we believe will make care safer and more affordable," said Cleve Killingsworth, BCBSMA's chairman and chief executive officer.

"Lowell General Hospital prides itself in providing exceptional, quality health care services at a low cost," explained Lowell General Hospital president and chief executive officer Normand E. Deschene. "This new plan established by BCBSMA will help to keep costs of health care down while supporting quality and efficient delivery of medical services in our community."

Gerri Vaughan, executive director of the Lowell General Physician Hospital Organization further explained, "We are pleased to be part of this new contract created by BCBSMA which reflects and acknowledges the outstanding quality and efficiency of care our physicians deliver within the greater Lowell community. As our organization continues to earn high scores for quality, improved outcomes and patient safety, as measured by all insurers, the Alternative Quality Contract ensures that our patients have local access to exceptional medical care without increasing costs."

Additional physician organizations participating in the AQC include: Mount Auburn Hospital and the affiliated Mount Auburn Cambridge Independent Practice Association (MACIPA), Hampden County Physician Associates, LLC (HCPA), Tufts Medical Center and the affiliated New England Quality Care Alliance (NEQCA), and Signature Healthcare Corporation including Brockton Hospital.

About the Alternative Quality Contract
The AQC is a significant change from traditional fee-for-service contracts. It combines two forms of payment. The first is a monthly global, or fixed, payment per patient which increases annually in line with inflation and is adjusted annually to take into account changes in health status. The second payment includes substantial performance incentives tied to nationally accepted measures of quality, effectiveness, and patient experience with care. The initial global budget is based on the actual cost of care for the entity's patients and is not reduced at the beginning of the contract for anticipated savings, as traditionally occurs in other global models. The contract's global payment covers all services received by a patient including primary, specialty, and hospital care. So, when a doctor spends more time with a patient and helps the patient avoid an unnecessary hospitalization, the patient receives better care, the doctor and hospital have the potential to receive performance incentives, and the overall costs are less. Employers benefit as the new system moderates cost increases through better care. You can read more about the AQC by visiting

AQC Impact:
To date, the Alternative Quality Contracts with all physician groups collectively impacts:

  • More than 1500 physicians
  • Over 112,000 Blue Cross Blue Shield of Massachusetts members

Lowell General Hospital and the Lowell General Physician Hospital Organization
Established in 1995, Lowell General Physician Hospital Organization was formed as a partnership between physicians on staff at Lowell General Hospital and the hospital, to support improved access to comprehensive, high quality health care services for Greater Lowell and the surrounding areas. Lowell General Hospital is a 218-bed, independent, not-for-profit community hospital founded in 1891. It was recently named to Cleverley + Associates "Top 100 Community Value Provider" list for the second year in recognition of the hospital's financial efficiency and quality.


Blue Cross Blue Shield of Massachusetts ( ) was founded more than 70 years ago by a group of community-minded business leaders. Today, headquartered in Boston, BCBSMA provides coverage to more than 3 million members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and hospitals for delivering safe and effective care, and in empowering patients to take more responsibility, become educated health care consumers and become stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.


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