Mass. commission backs ‘global’ payment system

A Massachusetts commission charged with revamping how health care is paid for in the state has recommended a dramatic change: moving from mostly fee-for-service payments to a “global” system in which provider groups are paid a set amount for each patient in their care.
The proposal by the Special Commission on the Health Care Payment System, which included representatives of every major stakeholder group, including doctors, hospitals and insurers, would apply to virtually all health care provided in the state and to all major payers.
That means Massachusetts would have to seek federal waivers to change how Medicare and Medicaid reimbursements are made in the state, and all insurers and the state itself would have to participate. The group envisions implementation within five years.
On its face, the plan sounds remarkably like 1990s-style health maintenance organizations, which involved broad networks of providers – doctors, hospitals, labs and imaging facilities, etc. – that got paid a fixed, or “capitated” sum per person.
The idea was to encourage providers to keep members healthy through preventive care and avoid more-costly services; in practice, however, some consumers found their HMOs denied them care to maximize their profits.
The opposite, however, the current fee-for-service system, is widely viewed as worse, because it creates financial incentives for providers to maximize the number of procedures given.
So the commission, established by law last year, explored alternatives, and on July 16, the commission unanimously endorsed moving toward global payments and grouping all providers in the state into “accountable care organizations” to work with the new model. “Massachusetts has led the nation in expanding health insurance coverage to virtually all of its residents,” said Leslie Kirwan, co-chair of the commission and state secretary of administration and finance. “With these recommendations, it is now poised to lead the nation in tackling the challenge of containing health care costs and improving the quality of care.”
Many details must still be worked out, and both the Massachusetts Hospital Association and the Massachusetts Medical Society warned that careful solutions must be crafted, or else global payments could be disastrous for providers’ finances.
In Rhode Island, where HMOs have never thrived, and the closest to a “global” system is the RIte Care program, Lt. Gov. Elizabeth H. Roberts, a longtime advocate of health care reform, said Massachusetts’ experiment could be instructive for our state.
“It is a kind of innovation that fundamentally alters how the money flows through the system and also what the goals are of the providers, and I think that’s going to be vital for any long-term change,” she said.
Rhode Island is exploring such options on a much more modest scale with the “CSI” pilot, she noted, which provides per-patient payments to primary care doctors who agree to manage their patients’ conditions. “I think that’s one step towards what Massachusetts seems to be headed towards – but much more quickly and much more directly if they’re successful.” &#8226