Doctors prepare for fee change
Efforts to cut costs would overhaul payment system
By Robert Weisman
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Globe Staff / November 21, 2009
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Health care providers in Massachusetts are preparing for a dramatic
change in how they get paid. But whether the state's proposed payment
system overhaul can succeed in reining in costs and boosting the quality
of care will depend on how it's structured and put into practice.
<http://www.boston.com/business/healthcare/articles/2009/11/21/massachusetts_health_care_providers_urge_revamping_payment_system/?comments=all>
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<http://www.boston.com/business/healthcare/articles/2009/11/21/massachusetts_health_care_providers_urge_revamping_payment_system/?comments=all>
That was the consensus of speakers on a health care panel yesterday
during a summit on business leadership and public policy at the John F.
Kennedy Library in Dorchester. The event was sponsored by the
Progressive Business Leadership Network, a group that promotes socially
and environmentally responsible economic growth.
"We've been reinvesting in the infrastructure of our organization to be
ready for the moment that's about to arrive,'' said Gene Lindsey, chief
executive of Atrius Health, a Newton-based alliance of community
physicians groups that includes Harvard Vanguard Medical Associates.
"We're ready and excited. We believe that everything we're doing now is
like building Noah's Ark, and the flood is coming.''
Lindsey was referring to the recommendation of a special commission
created by the state Legislature to stem the annual escalation of health
care costs, which, according to Secretary of Health and Human Services
JudyAnn Bigby, averages $3,000 more per person in Massachusetts than
other states. If left unchecked, Bigby said, state health costs are on
track to double between now and 2020.
The commission recommended that Massachusetts insurers and public payers
scrap their current method of paying doctors and hospitals negotiated
fees for individual visits or procedures. Instead, it wants to put pro
viders on a budget, paying a set amount intended to cover the cost of a
patient's medical care for a year.
That proposal, which would have to be approved by lawmakers, is being
called a "global payment'' system.
"The fee-for-services system was viewed uniformly as being broken,''
Bigby told the panel, citing increases in the volume of tests,
procedures, and other services. "The feeling was there's just too much
incentive to do more volume as a way to generate revenue.''
Yet she acknowledged that "we could reform the payment system and still
not get the results we'd like to see.'' Bigby said the danger is if the
state's biggest hospitals and doctors groups, which would team up as
"accountable care organizations,'' used their clout to command higher
reimbursements.
Paul F. Levy, chief executive of Beth Israel Deaconess Medical Center in
Boston, said rates paid to insurers already are based on market power,
rather than clinical outcomes, under today's system. He said Partners
HealthCare System, the state's largest hospital group that includes
Boston's Massachusetts General Hospital and Brigham and Women's
Hospital, gets the highest rates, followed by Beth Israel Deaconess.
"Everyone else gets less,'' Levy said.
To avoid locking that system into place in the new global payments era,
Levy said, state government would have to set the rates or require
public disclosure of health providers' insurance rates statewide. That
would pressure payers and providers to set rates more fairly, he said.
Another potential problem with a "per body, per year'' approach is that
it could shift the risk of calculating health costs to providers from
insurers, which keep larger cash reserves on hand than hospitals, Levy said.
The new system could also make it more difficult for employers to be
smart buyers of medical coverage - by designing their insurance plans to
give employees incentives to be healthier and find more efficient care,
said Philip J. Edmundson, chief executive of William Gallagher
Associations, an insurance brokerage company based in Boston.
"One concern of businesses [that] are paying for most of the insurance
is that the ability to control costs, manage costs, and get information
about costs will no longer be available,'' Edmundson warned.
Richard Pops, chief executive of Cambridge biotechnology company
Alkermes Inc. <http://finance.boston.com/boston?Page=QUOTE&Ticker=ALKS>,
which makes drugs to treat alcoholism, depression, and other diseases,
said a new payment system should be flexible enough to allow insurance
coverage of new treatments that drive down medical costs in the long run.
Potential pitfalls notwithstanding, health care companies are preparing
themselves for payment changes. That was one goal of an expanded
alliance struck last week between Beth Israel Deaconess and Atrius
Health that is aimed at controlling costs while maintaining quality.
Lindsey called payment overhaul a first step toward revamping the health
care system. "We can be trapped into trying to fix it all at once or
just getting started,'' he said. "I vote for just getting started.''
/Robert Weisman can be reached at [email protected]
<mailto:[email protected]>. /
© Copyright 2009 Globe Newspaper Company.
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