papers

Cost and quality trends in direct contracting arrangements

Health Aff 21:89-102.

Health Systems Management Faculty, School of Public Affairs, University of Baltimore, Baltimore, MD, USA.

This paper presents the first empirical analysis of a 1997 initiative of the Buyers Health Care Action Group (BHCAG) known as Choice Plus. This initiative entailed direct contracts with provider-controlled delivery systems; annual care system bidding; public reports of consumer satisfaction and quality; uniform benefits; and risk-adjusted payment. After case-mix adjustment, hospital costs decreased, ambulatory care costs rose modestly, and pharmacy costs increased substantially. Process-oriented quality indicators were stable or improved. The BHCAG employer-to-provider direct contracting and consumer choice model appeared to perform reasonably well in containing costs, without measurable adverse effects on quality.

PMID: 11900098