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Blue Cross of Massachusetts sets sights on lower health costs

Boston Globe, January 14, 2009

Blue Cross Blue Shield of Massachusetts announced it has signed an innovative contract with a hospital and two physicians groups that will slow the rate of medical cost increases while rewarding top-performing doctors with bigger paychecks. Mount Auburn Hospital in Cambridge and its affiliated doctors and Hampden County Physician Associates of Springfield signed the so-called Alternative Quality Contract. The contract offers the possibility of higher payments over five years if doctors meet quality and efficiency targets. Blue Cross said the new approach could change the way medical payments are made and cut annual increases in payments in half by reducing hospital expenses for care and procedures.