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I wonder how they plan to run their health care system without any doctors.
July 17, 2009
Mass. Panel Backs Radical Shift in Health Payment
By KEVIN SACK
BOSTON A high-level state commission recommended Thursday that Massachusetts seek to rein in health care costs by radically restructuring the way doctors and hospitals are paid.
The commissions action kicks off the second phase of a health care overhaul that has succeeded in covering nearly every resident of the state but done little to slow the relentless growth of spending.
The recommendations, if approved by the legislature and Gov. Deval Patrick, would make Massachusetts the first state to end the practice of paying health care providers for each office visit, laboratory test or procedure.
Instead, primary care physicians, specialists and hospitals would group themselves into networks that would be responsible for a patients well-being and would be compensated with a flat monthly or annual fee known as a global payment.
The 10-member commission deferred many central decisions to the legislature and to a new authority that would be created to establish and oversee the new payment system. In doing so, it preserved cautious support from the states hospital association, medical society and leading insurers for a proposal that resembles guiding principles more than bill language.
Representatives of those groups joined in a unanimous commission vote for the recommendations. But they made clear that their continued support might depend on devilish details, the kind that will determine whether their members are net losers and, if so, by how much.
It was only by keeping those stakeholders at the negotiating table that the state succeeded in 2006 in vastly expanding subsidized coverage for the uninsured. Maintaining that coalition is expected to be more difficult as the state tries to slow the growth of costs, an effort that typically translates into less revenue for providers and insurers.
The existing fee for service system has been roundly criticized as offering incentives that encourage doctors to provide more treatment than is necessary, a significant contributor to the high cost of health care.
Global payments, it is thought, would reward health care providers for keeping their patients well rather than for merely treating their ailments. If the cost of treating a patient was less than the global payment, the provider networks, called accountable care organizations, would keep the difference as profit.
Changing the payment system has also been central to the health care debate in Washington. Thus far, those discussions have focused more on providing financial rewards for high-quality preventive care than on demolishing the fee-for-service system.
The Massachusetts commission was created last year by the legislature and was led by Mr. Patricks chief finance and health policy advisers. But on Thursday the governor, a first-term Democrat, stopped short of endorsing its recommendations, saying only that they bring an important focus to cost containment and quality.
Top state legislators said that they recognized the political challenge in enacting such a plan but that Massachusetts circumstances demanded it. Senator Richard T. Moore, co-chairman of a joint legislative committee on health care financing, said he expected to hold hearings on the recommendations this fall.
The committees other leader, Representative Harriett L. Stanley, said, Its going to be a very long haul, but its a trip worth taking.
The commission stressed the importance of changing the way doctors and hospitals are paid not only by private insurers but also by Medicare and Medicaid. That would require permission from the federal government.
Global payments are hardly a new idea, as the concept closely resembles the capitation model that incited a backlash by consumers who accused health maintenance organizations of skimping on care. But members of the Massachusetts commission said their plan would offer financial incentives for performance that would transform physicians into care coordinators rather than gatekeepers.
This is not about containing costs by sacrificing quality, said Mr. Patricks finance director, Leslie A. Kirwan, a co-chairwoman of the commission. Thats been tried and rejected, and rightly so.
The commission recommended that its plan be carried out over five years. The state would not set rates, which would be negotiated by insurers and the new provider networks. But it would require those payment rates to account for variations in the health condition and socioeconomic status of patients seen by individual doctors and hospitals.
The report left the details of such risk adjustments to the new authority that would be established. It also made no projection of what it would cost to set up the new system.
Interest groups with heavy stakes embraced the proposal, but warily.
Hospitals want to be part of this historic endeavor, said Lynn B. Nicholas, president of the Massachusetts Hospital Association. But Ms. Nicholas added that the success of moving to a global payment system is not a foregone conclusion and expressed concerns about how risks would be adjusted and how start-up costs would be covered.
The president of the state medical society, Dr. Mario E. Motta, also urged caution. A big transition like this has never been done on such a broad scale, Dr. Motta said, so it must be done very carefully, deliberately and thoughtfully.
The commission issued its recommendations three years after the state enacted one of the most sweeping restructurings of health care in the countrys history. By requiring nearly all residents to have health insurance, and providing subsidies to those earning no more than $66,150 for a family of four, the state has managed to cover 97 percent of its residents.
That is by far the highest rate of any state, and elements of the plan have been adopted by President Obama and Congressional Democrats in their proposals to revamp the national health care system.
But to maintain political support for expanding coverage, Massachusetts political leaders deliberately deferred any serious discussion then about how to control health care costs. Those costs have continued to rise at what state leaders acknowledge is an unsustainable annual rate of 6 percent to 9 percent. Although the states new subsidized insurance program, Commonwealth Care, has kept a lid on premium increases, it is now straining the states budget for the second consecutive year.
We are among the highest-cost states, said Sarah Iselin, Mr. Patricks health policy adviser and the other co-chairwoman of the commission. Without intervention, our projections are that spending on a per-person basis could double by 2020.
July 17, 2009
Mass. Panel Backs Radical Shift in Health Payment
By KEVIN SACK
BOSTON A high-level state commission recommended Thursday that Massachusetts seek to rein in health care costs by radically restructuring the way doctors and hospitals are paid.
The commissions action kicks off the second phase of a health care overhaul that has succeeded in covering nearly every resident of the state but done little to slow the relentless growth of spending.
The recommendations, if approved by the legislature and Gov. Deval Patrick, would make Massachusetts the first state to end the practice of paying health care providers for each office visit, laboratory test or procedure.
Instead, primary care physicians, specialists and hospitals would group themselves into networks that would be responsible for a patients well-being and would be compensated with a flat monthly or annual fee known as a global payment.
The 10-member commission deferred many central decisions to the legislature and to a new authority that would be created to establish and oversee the new payment system. In doing so, it preserved cautious support from the states hospital association, medical society and leading insurers for a proposal that resembles guiding principles more than bill language.
Representatives of those groups joined in a unanimous commission vote for the recommendations. But they made clear that their continued support might depend on devilish details, the kind that will determine whether their members are net losers and, if so, by how much.
It was only by keeping those stakeholders at the negotiating table that the state succeeded in 2006 in vastly expanding subsidized coverage for the uninsured. Maintaining that coalition is expected to be more difficult as the state tries to slow the growth of costs, an effort that typically translates into less revenue for providers and insurers.
The existing fee for service system has been roundly criticized as offering incentives that encourage doctors to provide more treatment than is necessary, a significant contributor to the high cost of health care.
Global payments, it is thought, would reward health care providers for keeping their patients well rather than for merely treating their ailments. If the cost of treating a patient was less than the global payment, the provider networks, called accountable care organizations, would keep the difference as profit.
Changing the payment system has also been central to the health care debate in Washington. Thus far, those discussions have focused more on providing financial rewards for high-quality preventive care than on demolishing the fee-for-service system.
The Massachusetts commission was created last year by the legislature and was led by Mr. Patricks chief finance and health policy advisers. But on Thursday the governor, a first-term Democrat, stopped short of endorsing its recommendations, saying only that they bring an important focus to cost containment and quality.
Top state legislators said that they recognized the political challenge in enacting such a plan but that Massachusetts circumstances demanded it. Senator Richard T. Moore, co-chairman of a joint legislative committee on health care financing, said he expected to hold hearings on the recommendations this fall.
The committees other leader, Representative Harriett L. Stanley, said, Its going to be a very long haul, but its a trip worth taking.
The commission stressed the importance of changing the way doctors and hospitals are paid not only by private insurers but also by Medicare and Medicaid. That would require permission from the federal government.
Global payments are hardly a new idea, as the concept closely resembles the capitation model that incited a backlash by consumers who accused health maintenance organizations of skimping on care. But members of the Massachusetts commission said their plan would offer financial incentives for performance that would transform physicians into care coordinators rather than gatekeepers.
This is not about containing costs by sacrificing quality, said Mr. Patricks finance director, Leslie A. Kirwan, a co-chairwoman of the commission. Thats been tried and rejected, and rightly so.
The commission recommended that its plan be carried out over five years. The state would not set rates, which would be negotiated by insurers and the new provider networks. But it would require those payment rates to account for variations in the health condition and socioeconomic status of patients seen by individual doctors and hospitals.
The report left the details of such risk adjustments to the new authority that would be established. It also made no projection of what it would cost to set up the new system.
Interest groups with heavy stakes embraced the proposal, but warily.
Hospitals want to be part of this historic endeavor, said Lynn B. Nicholas, president of the Massachusetts Hospital Association. But Ms. Nicholas added that the success of moving to a global payment system is not a foregone conclusion and expressed concerns about how risks would be adjusted and how start-up costs would be covered.
The president of the state medical society, Dr. Mario E. Motta, also urged caution. A big transition like this has never been done on such a broad scale, Dr. Motta said, so it must be done very carefully, deliberately and thoughtfully.
The commission issued its recommendations three years after the state enacted one of the most sweeping restructurings of health care in the countrys history. By requiring nearly all residents to have health insurance, and providing subsidies to those earning no more than $66,150 for a family of four, the state has managed to cover 97 percent of its residents.
That is by far the highest rate of any state, and elements of the plan have been adopted by President Obama and Congressional Democrats in their proposals to revamp the national health care system.
But to maintain political support for expanding coverage, Massachusetts political leaders deliberately deferred any serious discussion then about how to control health care costs. Those costs have continued to rise at what state leaders acknowledge is an unsustainable annual rate of 6 percent to 9 percent. Although the states new subsidized insurance program, Commonwealth Care, has kept a lid on premium increases, it is now straining the states budget for the second consecutive year.
We are among the highest-cost states, said Sarah Iselin, Mr. Patricks health policy adviser and the other co-chairwoman of the commission. Without intervention, our projections are that spending on a per-person basis could double by 2020.
You should do that, it would make a great story for the Wall Street Journal on the state of health care, 5 years from now when we're all suffering.
