Lowell General Physician Hospital Organization

This case focuses on the Alternative Quality Contract (AQC), a novel payment program designed to incentivize providers to deliver less costly, high quality health care. Under the AQC, offered by Blue Cross Blue Shield of Massachusetts, providers received a fixed-dollar budget to cover all care provided to a specific patient population, as well as incentive payments for quality. The AQC was piloted in 2009 by a handful of provider organizations, including a group of physicians belonging to the Lowell General Physician Hospital Organization (LGPHO). The case describes the LGPHO physicians' experience during their first two years under the AQC, allowing students to assess the group's performance as well as potential challenges in the remaining three years of the contract and future contracts and the AQC's value as part of the solution to untenably high U.S. health care costs.