global payments


Is This Chelmsford Doctor A Model For The Nation?

Dr. Damian Folch runs his first half-marathon.

Dr. Damian Folch runs his first half-marathon.

Do you think Dr. Damian Folch, a primary care doctor in Chelmsford, is a model for the nation? You can vote on that here at The Los Angeles Times.

Oh, wait, you want to know how he might be a model? Well, he definitely has my vote when it comes to practicing “Lifestyle Medicine,” tackling his patients’ unhealthy lifestyles and getting them to exercise more. (Check out that story from earlier this year here.) But now The Los Angeles Times features Dr. Folch in “A shift in how care is paid for.” It’s an excellent explanatory piece about the shift away from “fee for service” medicine — paying doctors for each bit of care — and toward “global payments” that pay doctors for a patient’s overall care — and rewards them for keeping the patient healthier and costs lower. That shift is happening more systematically here in Massachusetts than anywhere else, the piece says.

It begins:

CHELMSFORD, Mass. — It’s hard work being one of Dr. Damian Folch’s diabetic patients.

If a lab test shows high cholesterol, Folch is quick to call or email. No patient can leave the office without scheduling an annual eye exam, a key preventive test. A missed exam or an appointment leads to another call.

“We are a real pain in their necks,” joked Folch, a primary care physician in suburban Boston. “We track them down.”

That kind of attention has always been good medicine. For Folch, 59, it’s now good business. He is among thousands of physicians in Massachusetts whose pay depends on how their patients fare, not just on how many times they see them. If patients stay healthy and avoid costly medical care, he gets more money. Continue reading

A Checkup On One Of America’s Most Expensive Patients

Sue Beder is among the 5 percent of American patients who account for half of all the nation’s health care dollars (Photo: Martha Bebinger/WBUR)

By Martha Bebinger

In April, we introduced you to one of America’s most expensive patients. Stoughton’s Sue Beder is 66 and has had multiple sclerosis since she was 18. She sees half a dozen doctors, takes 21 prescribed medications, and is typically in and out of the hospital twice a year. You can listen to her story here.

Beder is one of the 5 percent of patients we often hear about who account for half of all health care dollars in the United States. As one of the most expensive patients, Beder is at the epicenter of Massachusetts’ efforts to save money while improving her care.

Late last year, Beder signed up with an agency, Senior Whole Health, that receives the money Medicare and Medicaid expect to spend on Beder and pools that into one budget. It’s an approach the state plans to expand to 110,000 disabled patients across Massachusetts. Senior Whole Health pledges to spend less than the government would spend and, in exchange, the agency gets to decide how best to spend the money to keep Beder healthy.

Beder couldn’t have been happier with the move. The agency put handrails in her bathroom and started buying all her vitamins and lotions. It supplied adult diapers so that she wouldn’t get out of bed at night and risk a fall. The agency is doing all this to help Beder stay home. That’s where she wants to be, and it’s cheaper than moving her into a nursing home.

So is this idea working? Is spending more money up-front on this home-based care helping Beder avoid costly medical care? Continue reading

Few Doctors Gaming Global Budgets in Massachusetts

Every time I go see my primary care doctor I hear a lot about how awful health care is and how it’s getting worse.  “Just wait,” he says about the move to global budgets, “doctors will figure out how to work the system.  I saw it in the 90s, it will happen again.”

So when I saw this line in a Health Affairs analysis of the Blue Cross Alternative Quality Contract (AQC) after two years, my doctor’s words echoed in my head.

“We cannot distinguish between a true increase in risk and more aggressive coding resulting from incentives.”

OK, this might take a little explaining. The study says each year, there are more, sicker patients in the Blue Cross AQC contracts. Why might that be, you ask?  Are doctors who shift to a global budget attracting sicker patients? Are they detecting more medical problems? Or could doctors be claiming to have more, sicker patients, so that they can demand a larger global budget from Blue Cross?

Michael Chernew, health care policy professor, Harvard Medical School (photo/Josh Touster)

The AQC contracts are based, in part, on whether a physician’s group includes, for example, 300 or 3,000 diabetics. If the group has a large ratio of expensive patients, the group can demand a larger AQC budget. Doctors may be “upcoding” – using more complex and expensive codes when billing for patients – to make it look like the doctor has more expensive patients and needs a larger budget.

A 2009 report from the Medicare Payment Advisory Commission (MedPAC) raised concerns about “upcoding.”  Health Affairs study lead author, Dr. Michael Chernew, says he looked for upcoding in the Blue Cross AQC contract, but found little evidence that doctors in Massachusetts are claiming to have sicker patients so that they can justify a higher global budget.

Of the 9.9% savings that groups new to global budgets achieved in 2010, Chernew says only 5% of that total can be attributed to doctors who exaggerated the sickness of patients. “The vast majority of the 9.9% is real savings, as opposed to simply coding changes,” says Chernew. “Nevertheless, I do think it’s an important issue to keep an eye on.”

The bottom line – so far – there’s little evidence that doctors are gaming global budgets in Massachusetts. I’m sure my primary care doc won’t believe me.

Before You Claim Global Payments Are Improving Care…

Everyone’s fretting about the cost of medical care, and whether changes in health care delivery and payment systems will save money. But what about the more intimate aspects of medicine? What about the actual care?

WBUR’s Martha Bebinger offers her thoughts:

A Health Affairs report out last week concludes that a relatively new global budget contract in use by Blue Cross Blue Shield of Massachusetts has “improved care.” Hold on. If this is the threshold for success, then the move to global budgets is going to disappoint a lot of regular, non-medical people, like me.

Take a closer look at the evidence of “improved care” in the report. There are two charts (and summaries, both are below). The first includes scores for 21 ways to measure whether patients received recommended preventive or maintenance care. The second looks at whether patients with diabetes, hypertension and cardiovascular disease are more likely to have their ailments under control with care through a global budget than through fee for service. Yes, there is some evidence that patients are receiving better preventive care.

But to me, “improved care” should mean more: Are patients in a global budget healthier, happier and more productive than those who receive are through traditional fee for service? I understand that measuring “health” is really hard. One quality guru told me that the U.S. has not expanded ways to measure health care quality since we started using HEDIS in, was it the early ’90s? OK, but if you can’t tell me I will be healthier under a global payment, then don’t make the claim.

Here are some examples of things I want to know when comparing patients in and outside a global budget:

1) Do your kids with asthma miss fewer days of school?

2) Do adults diagnosed with depression miss less work?

3) Are patients readmitted to the hospital for the same or a similar ailment less frequently?

4) Do patients develop fewer hospital acquired infections?

5) Do moms suffer fewer complications after a normal vaginal delivery?

I don’t want to minimize the importance of helping diabetics keep their blood sugar under control. This is important. But I need more clear, understandable proof of “improved care.” Is it out there?

Here’s the chart on the 21 preventive and maintenance measures:

Continue reading

Global Budgets: Better Care, Consumers Wait To See Savings

Lead author Michael Chernew, professor, Harvard Medical School (photo/Josh Touster)

Massachusetts is in the midst of a high-stakes experiment to control health care costs, based on the belief that changing the way we pay for care will cut costs and improve our health. Hospitals, doctors and insurers in Massachusetts are moving at a rapid pace into what are known as global payments, or sometimes global budgets. A study out today says there are signs that moving doctors into a global budget is good for patients, but the change isn’t saving consumers any money yet.

One in five patients in Massachusetts is now under some kind of global payment. That means that hospitals and physician groups negotiate a budget for all the patients in their practice. Doctors are paid based on the number of patients in their care, not based on how many patients they see in a day or the number of tests they order. This change is sweeping across Massachusetts and being tested in pockets around the country. Blue Cross Blue Shield launched this experiment in Massachusetts in 2009. Michael Chernew, and a team of researchers at Harvard Medical School, looked at what happened in the first two years.

“We find in our study that the underlying medical spending fell and quality improved,” says Chernew, “and ultimately I think that’s what the system is striving towards.”

The 11 physician groups and hospitals that joined in 2009 and 2010 did a better job than physicians in traditional medical contracts of making sure that patients received standard check-ups, cancer screening tests and other preventive care.

‘This is really the first time that people have shown you can save money even right away.’ – Harvard economist David Cutler.

Overall, they trimmed spending by just under three percent. Chernew says these providers are delivering quality care for less money, but, “the real question is going to become, as the global budget gets tighter, can the groups continue this level of savings. I don’t think we can tell the answer to that question after two years of analysis.”

The main way doctors saved money was by sending patients to lower cost hospitals. This wasn’t easy; many resisted the change. Doctors say the next stage, which is trying to eliminate care patients don’t need, is even more difficult. Continue reading

The Wonk Olympics: Sweeping New Health Cost-Cutting Plan Coming

In this April 12, 2006, file photo, then-Gov. Mitt Romney is seen with lawmakers and staffers after signing the state's universal health law at Faneuil Hall in Boston. (AP File)

In health policy circles, it’s as big as the Olympics, with major players, major maneuvering and all eyes watching. It’s a sweeping new plan to control health care costs through radical changes in how doctors are paid and other measures that will be soon be unveiled by state lawmakers in the next chapter of health reform, reports WBUR’s Martha Bebinger. Here’s a bit of her preview:

The House and Senate are expected to build on movements that are already under way: global payments, electronic health records and the increased focus on primary care. The House point person on health care, Steven Walsh, has outlined his proposals in meetings with dozens of groups.

Legislators are considering some controversial moves.

The Senate has talked about taxing insurance company profits. One House leader has a proposal to close the gap in payments to rich and poor hospitals. There’s a vigorous debate about how aggressive the state should be in trying to hold down health care costs. Continue reading

Mass Docs Not Exactly Ready For Global Payments, Survey Finds

(Sonarpulse/wikimedia commons)

There’s a sense of inevitability about global payments here in Massachusetts. While intense debate continues about how effective this lump-sum, per-patient budgeting system really is, there’s no doubt that it’s starting to take hold.

So it’s slightly unnerving that a survey conducted by the Harvard School of Public Health for the Massachusetts Medical Society found that only 29 percent of doctors said they were ready to enter into such payment arrangements, and less than half believe that global payments will reduce medical spending.

The latest MMS survey, which we covered earlier here (the survey has just now been finalized) included “572 physicians, 290 who work in solo or small single-specialty practices, and 282 who work in larger, multi-specialty groups or groups connected to hospitals.”

Her are some more key findings:

–While 67 percent of respondents reported having access to computer systems for managing some types of clinical information, only 7 percent said they had computer-based systems that permit clinical information exchange, communication, and management both inside their group and with physicians and hospitals outside of their group.

–Only 29 percent reported that their group is ready to enter global payments contracts, and only 21 percent said their group is both ready to enter such contracts and large enough to provide comprehensive care, Continue reading

Potential Minefields On The Path Toward ACO’s

Bruce Landon, a primary care doctor at Beth Israel Deaconess Medical Center, considers the future of ACO's

Bruce Landon, an internal medicine doctor at Beth Israel Deaconess Medical Center, offers a smart analysis of ACO’s (accountable care organizations) — their potential for both good and bad — in this week’s New England Journal of Medicine. The key, says Landon, who is also a professor of health care policy at Harvard Medical School, is how, exactly, organizations choose to divide their global budgets, and whether they plow money back into primary care to shore up the foundations of a prevention-focused system, or whether monies continue to flow, as they have, toward a fee-for-service, specialist-driven arrangement.

Landon writes:

Conceptually, global payment represents an important opportunity for changing the perverse incentives inherent in our current fee-for-service system. To be successful, however, ACOs must pass these incentives along to their member physicians, who continue to be responsible for most utilization decisions. Although organizations can implement various managerial strategies to influence physicians’ decision making (e.g., radiology decision support and prior authorization), ACOs are unlikely to reduce the rate of increase in health care spending without some essential changes in the behavior of member physicians — and therein lies the rub. [My bold]

The fundamental questions become how ACOs will choose to divide their global budgets and how their physicians and other service providers will be reimbursed. Thus, this system for determining who has earned what portion of payments — keeping score — is likely to be crucially important to the success of these new models of care. Continue reading

Children’s Hospital Signs On To Global Payment Strategy

Sandra Fenwick, President and COO, Children's Hospital Boston

Children’s Hospital Boston has a new three year deal with Blue Cross Blue Shield that holds rates flat this year.  In the second and third years, Blue Cross says the increases will be less than general inflation, which has been around 2%.

Children’s President and COO Sandra Fenwick says the savings, as compared to previous increases, will be $83 million.  That amount, Fenwick says is in addition to money Children’s shaved off contracts in 2009 and 2010 for a the total of $155 million.  Is that enough over five years? Weigh in below.

Beyond the savings, Fenwick says this contract is a milestone because it moves Children’s into the Blue Cross Blue Shield global payment plan (the Alternative Quality Contract/AQC).  “We’re going to be taking risk for managing the care of our patients,” says Fenwick, “we’re going to be held accountable for the quality, and it really is in line with policy changes that the whole country is going to be watching.”

Blue Cross CEO Andrew Dreyfus also calls this contract a milestone, but for a different reason.  Dreyfus recalls sitting in meetings several years ago about moving to global payments and hearing “a lot of skepticism about whether global payments could work in a specialty hospital like Children’s. I think we’re answering the question that it can work in a way that both improves quality and lowers cost.”

For more on how Fenwick sees the deal, here’s a condensed version of our interview: Continue reading

Levy Deconstructs NYT On Global Payments In Massachusetts

(Health Care Costs Gushing Out of Control/ Michael Ramirez Cartoon)

Here’s the ever-persistent Paul Levy offering analysis on the page one story in today’s New York Times about cost-cutting health reform efforts in Massachusetts.

The Times piece cites experiments with global payments, and quotes Brandeis health economist Stuart Altman saying that Partners HealthCare’s recent announcement to enter into such an arrangement with insurer Blue Cross Blue Shield of Massachusetts is “a big deal because they’re the biggest player in town and it sort of solidifies that this will be one of the major changes in the system and that it’s likely to be around for a while.”

Levy writes:

The reporters give credence to the premise, even though there is not empirical support for the conclusion. Indeed, such support as exists in Massachusetts suggests that the manner in which global payments were introduced resulted in higher, rather than lower, costs. The story also fails to discuss consumer concerns about such plans, which would limit choice.

But then, the reporters retell the big lie, the one that suggest that concerns about the cost trends of the dominant provider group have been alleviated by a recently signed contract. Ready? Here you go: Continue reading