Lower- Versus Higher-Income Populations In The Alternative Quality Contract: Improved Quality And Similar Spending

Zirui Song, Sherri Rose, Michael E Chernew, Dana Gelb Safran

As population-based payment models become increasingly common, it is crucial to understand how such payment models affect health disparities. We evaluated health care quality and spending among enrollees in areas with lower versus higher socioeconomic status in Massachusetts before and after providers entered into the Alternative Quality Contract, a two-sided population-based payment model with substantial incentives tied to quality. We compared changes in process measures, outcome measures, and spending between enrollees in areas with lower and higher socioeconomic status from 2006 to 2012 (outcome measures were measured after the intervention only). Quality improved for all enrollees in the Alternative Quality Contract after their provider organizations entered the contract. Process measures improved 1.2 percentage points per year more among enrollees in areas with lower socioeconomic status than among those in areas with higher socioeconomic status. Outcome measure improvement was no different between the subgroups; neither were changes in spending. Larger or comparable improvements in quality among enrollees in areas with lower socioeconomic status suggest a potential narrowing of disparities. Strong pay-for-performance incentives within a population-based payment model could encourage providers to focus on improving quality for more disadvantaged populations.