The world of healthcare is a hotbed for innovation. Every day, leading minds from across the industry work to improve the quality of the system, whether that means developing new medical technologies and perfecting the treatment of severe diseases, or identifying preventative measures that help keep people well. Innovation and quality improvement in healthcare is not limited to medical innovation. As our finest scientific minds work to cure disease, the experts at Blue Cross and Blue Shield companies work to find ways to temper the ballooning costs that tax the system and mend the broken payment models that result in costly duplication and waste in care delivery. And they are seeing results. An independent study released in the New England Journal of Medicine (NEJM) shows that the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC) has improved the quality of patient care and lowered costs in the four years since it was first implemented. The study, conducted by researchers at Harvard Medical School and funded by the Commonwealth Fund and the National Institute on Aging, compares Blue Cross Blue Shield of Massachusetts members with a primary care physician in an AQC contract with a control group of commercially-insured individuals across eight northeastern states (Connecticut, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont). Researchers concluded that spending growth among patients in the AQC was 10% lower than the control group. Quality of care was significantly higher than national averages. The findings relative to the control group are notable because they account for more general trends locally and nationally – showing that the AQC achieved savings over and above what was happening in the general environment. The AQC was introduced by Blue Cross Blue Shield of Massachusetts in 2008 as an alternative to the traditional fee-for-service payment model. Designed both to improve the quality of care members receive and to moderate the growth in health care spending, the AQC model combines a global budget for a patient population with significant performance incentives based on nationally accepted quality metrics. By linking financial incentives to clinical quality, patient outcomes and overall resource use, the AQC is designed to decrease spending and cost growth, while producing significant, measurable improvements in quality. Physicians and hospitals that adopt the AQC agree to take responsibility for the full continuum of care received by their patients, regardless of where the care is provided. Today, more than 85 percent of the physicians and hospitals in the Blue Cross Blue Shield of Massachusetts HMO network are included in the AQC. It is a crucial component of Blue Cross Blue Shield of Massachusetts’ agenda to make quality health care affordable for its members and employer customers and is the predominant contract model between Blue Cross and its network physicians and hospitals.