Two-Year Impact of the Alternative Quality Contract on Pediatric Health Care Quality and Spending

OBJECTIVE: To examine the 2-year effect of Blue Cross Blue Shield of Massachusetts' global budget arrangement, the Alternative Quality Contract (AQC), on pediatric quality and spending for children with special health care needs (CSHCN) and non-CSHCN. METHODS: Using a difference-in-differences approach, we compared quality and spending trends for 126 975 unique 0-to 21-year-olds receiving care from AQC groups with 415 331 propensity-matched patients receiving care from non-AQC groups; 23% of enrollees were CSHCN. We compared quality and spending pre (2006-2008) and post (2009-2010) AQC implementation, adjusting analyses for age, gender, health risk score, and secular trends. Pediatric outcome measures included 4 preventive and 2 acute care measures tied to pay-for-performance (P4P), 3 asthma and 2 attention-deficit/hyperactivity disorder quality measures not tied to P4P, and average total annual medical spending. RESULTS: During the first 2 years of the AQC, pediatric care quality tied to P4P increased by + 1.8% for CSHCN (P < .001) and + 1.2% for non-CSHCN (P < .001) for AQC versus non-AQC groups; quality measures not tied to P4P showed no significant changes. Average total annual medical spending was similar to 5 times greater for CSHCN than non-CSHCN; there was no significant impact of the AQC on spending trends for children. CONCLUSIONS: During the first 2 years of the contract, the AQC had a small but significant positive effect on pediatric preventive care quality tied to P4P; this effect was greater for CSHCN than non-CSHCN. However, it did not significantly influence (positively or negatively) CSHCN measures not tied to P4P or affect per capita spending for either group.