Patrick's Reform Effort Fuels Health Care Community Debate | Will a global-payment system save money in the long run?
Gov. Deval Patrick recently visited Southborough Medical Group to discuss legislation he filed that aims to migrate away from the “fee-for-service” method of health care payment and toward alternative methods.
Dr. H. Eugene Lindsey, president of Atrius Health in Boston, which owns Southborough Medical Group and a handful of other Central Massachusetts doctors’ offices, told Patrick he wholeheartedly supports the effort to phase out fee-for-service, which pays doctors by the number of services delivered.
But he’s slightly skeptical about the governor’s approach.
One of the methods being pushed by the governor is a global-payment system in which doctors and hospitals are paid a fixed amount per year to take care of a patient.
Hospitals that adopt the new global-payment structure will be subject to a number of new reporting requirements, and that doesn’t sit well with Lindsey.
“If by making the switch I’m subjecting myself to closer scrutiny and possibly more costs, why would I do it?” Lindsey quipped during a phone interview the day after Patrick’s visit.
And therein lies the problem for Patrick. Doctors, hospitals and insurers mostly agree that fee-for-service has to go. There is even general agreement on which alternative methods, such as global payments, should be used.
The real question is how to ensure these new payment methods are fair for consumers and the market, but are not creating burdens for doctors and hospitals.
Purchasing Power
JudyAnn Bigby, the secretary of the state Office of Health and Human Services, admits that the legislation is not perfect. That’s why Patrick made the trip to Southborough Medical to discuss the issue with Lindsey and other medical leaders.
However, the bill is a step in the right direction, Bigby argues.
It encourages alternative payment methods in two major ways. Most notably, the state plans to use its purchasing power.
Organizations such as MassHealth, the state’s Medicaid program, Commonwealth Connector, and the state’s public employee insurance system, the Group Insurance Commission, would use payment structure as one criteria in determining which doctor groups and hospitals patients can use.
“Given that these organizations collectively cover about 1.6 million people in the commonwealth, certainly providers who want to do business with us will have to pay attention to our movement toward the new payment methodologies,” Bigby said.
Secondly, the bill also allows the state Division of Insurance to examine payment systems as part of the rate review process, among other considerations.
Although Bigby acknowledged that targeting insurers to address providers’ payment structures is “an indirect way” of tackling the issue, it should be an effective one, she said.
Devil In The Details
Some doctors are optimistic about the increased discussion about migrating away from fee-for-service, including Dr. Eric Weinstock, a partner at Grove Medical Associates in Worcester.
Namely, the bill does not require doctors to move into a global-payment system, but it does encourage it. Doctors don’t like to be told what to do, he said.
Also, it calls for some medical malpractice reforms that Weinstock supports, including installing a 180-day cool-off period before a patient can sue a doctor.
But Weinstock said there are barriers to adopting global-payment systems.
For example, an organization like Grove Medical would likely have to partner with a hospital to be able to offer comprehensive care for patients. Under the current system, Weinstock can choose which hospitals to send patients to depending on what service is needed and where it may be least expensive. That choice may be harder to have in a global model.
Furthermore, it’s unclear, Weinstock said, how revenues from a global-payment system would be split up between the hospitals and doctors.
“There are a lot of unknowns out there,” he said.
Not So Fast
Not everyone is ready to endorse the plan yet. Many, including some insurers in Worcester, are adopting a wait-and-see attitude.
R. Scott Walker, executive vice president and CFO of Worcester-based Fallon Community Health Plan, said the legislation is “an appropriate discussion.”
“From our perspective, we’re genuinely interested in seeing more of the details,” he said.
But Walker said there is a long way to go before fee-for-service is extinct.
Jeff Dion, chief financial officer for Marlborough Hospital, which is part of the UMass Memorial Health Care system, said he’s encouraged by what he feels is an increased enthusiasm among the government, insurers and providers to migrate away from fee-for-service.
But just reforming the way doctors and hospitals are paid doesn’t necessarily address how much it costs to give that care. There are underlying factors that are contributing to the increasing cost of caring for patients.
Also, one of the biggest costs for any hospital is labor, which has risen at a higher rate than inflation during the past decade, he said. And, compared to other countries, particularly European ones, pharmaceutical drugs in the United States are much more expensive.
Those underlying cost drivers need to be addressed as well, Dion argues. And that doesn’t seem to be happening during the discussion about the method by which doctors and hospitals are paid.
WBJ Web Partners
Most Recent
Most Recent
0 Comments