Thousands of employers will not be forced to choose after all between Blue Cross Blue Shield of Massachusetts and Tufts Medical Center now that the two sides have announced a resolution of their contract dispute.

Blue Cross and Tufts said yesterday they have reached agreement on a three-year contract that will provide Tufts and its New England Quality Care Alliance (NEQCA) physicians group a 3 percent average reimbursement increase.  Tufts Medical Center and its doctors have also agreed to join the newest version of Blue Cross’ Alternative Quality Contract (ACQ), which requires participating organizations to outperform the rest of the Blue Cross provider network in managing growth in health care spending.

The new deal avoids a January 17 showdown between the two institutions that would have forced more than 88,000 Blue Cross subscribers with Tufts-affiliated primary care physicians to find new doctors or new insurance. The impasse threatened approximately 55,000 employers.

Both organizations acknowledged in a statement the uncertainty the negotiations caused for members and patients.

Andrew Dreyfus, BCBSMA’s President and Chief Executive Officer, said, “We want to thank our members for their patience as we worked to achieve a new contract. We are pleased that Tufts Medical Center and NEQCA will continue their participation in the AQC — a model which has been shown to reduce health care spending while improving the quality of patient care. This agreement demonstrates that when we come together in a spirit of shared responsibility, we can ensure that caregivers have the resources they need to care for patients while at the same time being responsive to the appropriate impatience in the community regarding the cost of health care.”

Eric Beyer, President and Chief Executive Officer of Tufts Medical Center, said, “The relationship between physicians and patients is extremely important and we are pleased that an agreement has been reached with BCBSMA that supports our patients and their members. Caring for our patients is our first priority and this contract will allow us to continue to deliver the exceptional care our patients appreciate and deserve. We realize the public nature of these negotiations caused anxiety for BCBSMA members and our patients, and we thank them for their understanding and patience as we worked to reach an agreement that supports their health care needs.”

AIM congratulates Blue Cross and Tufts on the new agreement. The association believes that the protracted contract negotiations represent an essential growing pain for a health industry adjusting to a new economic reality that puts the emphasis on affordable care.

The ultimate significance of the dispute is that doctors and insurers are trying to hammer out a market-based response to years of pressure by employers and consumers to control the spiraling cost of health insurance.