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A key theme in discussions of health care reform in recent years has been the need to change how providers are paid, moving away from the current, mostly fee-for-service model, which most believes encourages overuse of services, to something that encourages prevention.
In Massachusetts, where previous reforms have succeeded in getting 97 percent of residents covered by insurance, but spiraling costs are threatening the system, a group called the Special Commission on the Health Care Payment System has been looking at alternatives.
On July 16, the commission recommended a dramatic change: moving to a “global” system in which providers join groups and are paid a set amount per patient. Rhode Island Health Insurance Commissioner Christopher F. Koller, who has been watching the developments in Massachusetts, answered questions about the proposal and the ideas behind it.
PBN: Do you believe the concept endorsed by the commission is a good one?
KOLLER: The recommendations of the commission are consistent with national research on ways to align provider payments with system goals of affordability and quality. Our current method, driven mostly by Medicare, does not do that. There is greater pressure to do this in Massachusetts than anyplace else because with an insurance mandate, there are fewer shells under which you can hide the costs – our system treats costs like a hot potato which we try to shift between payers. With Massachusetts subsidizing all low-income people, there is more public-sector accountability and more public pressure to get the costs down.
The commission report is pretty silent about how to implement and enforce such payment reforms, though. How much of a public role is needed? That would be worked out in legislation, presumably.
PBN: Are there examples, nationally, of successful applications of a global payments system to all provider levels? Are there good models for the “accountable provider organizations” the commission expects providers to join?
KOLLER: We have known for 30 years that integrated delivery systems produce better health outcomes for populations at lower overall costs, compared to uncoordinated doctors and hospitals. Standards are set, care is planned, quality is monitored, and information is communicated.
Kaiser-Permanente, the Mayo Clinic and the Fallon Clinic in Worcester are all very good examples. Unfortunately, employer-purchased health insurance makes provider choice the primary concern, above quality or cost. The reforms being talked about now are attempts to use payment mechanisms to create more integration and coordination among independent providers. A major challenge is integrating hospital payments into these reforms. Too often we pay a hospital to do hip replacement surgery, another company to do the walker and a home care company to do the visit – but nobody is thinking from the start, “How can I get this person back to mobility most quickly?” because we don’t pay people to do that.
PBN: How does the Massachusetts proposal fit with payment reforms being looked at in Rhode Island, most notably through the CSI Rhode Island medical-home pilot project?
KOLLER: The reforms envisioned in Massachusetts include but are much, much broader than payment reform for primary care and the medical home, as is happening in Rhode Island. My own opinion is that as concerns about health insurance rate increases continue to rise, scrutiny of the proposed Lifespan/Care New England merger increases, and the financial condition of community hospitals grows more precarious, there will need to be similar consideration of such payment reforms in Rhode Island.
PBN: What about in the immediate future, though? Do you think CSI-RI, Health Access, or any other projects going on in Rhode Island could lead to large-scale testing of new payment models in Rhode Island in the next year or two, even if it’s only in primary care?
KOLLER: There are small steps with physicians in paying for more services, or bundled services, going on in many places, including Rhode Island. I think that speed will increase as health plans look to innovate more with primary care. One of the new challenges will be thinking about how we ask patients to identify themselves to a medical home or “usual place of care.” Most of us, as patients, think in these terms already, so we should be comfortable asking health plans to collect this information. They can then use it as a basis for reporting and payment to physicians. And physicians can think of “my population” – all those folks who call them their medical home.
PBN: How relevant is the Massachusetts proposal to national health care reform?
KOLLER: This is exceedingly relevant to national reform, because payment reform is necessary to address health insurance affordability. State conversations on payment reform are more likely to happen if Medicare is participating in local discussions and/or leading at the national level. Medicare accounts for nearly 40 percent [39.2 percent in 2007, according to the American Hospital Association] of hospital payments and thus drives an enormous share of provider actions. U.S. Sen. Sheldon Whitehouse has co-sponsored legislation that would give the executive branch more authority to implement changes in Medicare payment methodologies; currently Congress must approve each change, which has resulted in very little change and a continued reliance on a fee-for-service payment system that does not reward quality, prevention or care coordination.
The Massachusetts recommendations and related materials are posted online.
