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Getting A Grasp On Global Payments: Prix Fixe Vs. ‘I’ll Have The Lobster’

As the Patrick administration pushes Massachusetts forward toward the cost-cutting phase of health reform, one of its guiding concepts is to shift the state from “fee for service” to “global payments.” That is, instead of being paid for each bit of care they give, health care providers will be put on an overarching “global” budget for each patient.

But how do we know that global payments work? And do they really save money? WBUR’s Martha Bebinger asks those important questions today in her report here, and takes a look at the early experience of some local global-payment hotspots: Commonwealth Care Alliance, Harvard Vanguard and Blue Cross Blue Shield. Already, she reports:

There’s a lot going on behind the scenes. Physicians are joining large practices so they’ll have help managing budgets. Clinics, rehab centers and hospitals are forming new alliances that put all our care under one umbrella group. And health insurers are negotiating contracts that send nurses to patients’ homes to avoid a hospital stay, but hold providers financially responsible if they don’t stick to a budget. In theory, these connections are supposed to lead to better care and lower costs.

“That makes a lot of sense in theory, but in practice, what does it mean?” asks MIT economics professor Jon Gruber. “What is the global budget?

“Who sets the global budget and for which payers? How much uprooting do you want to do, based on the limited evidence we have, that this will solve our theoretical problems?” Gruber continues. “I think it’s great we’re having this conversation. I just think it’s premature to say it’s a solution.”

Yet another early adopter of global payments, Lowell General Physicians Hospital Organization, is featured in a piece by Pippin Ross in the latest issue of the magazine CommonWealth, here.

Read both pieces and you come away with the impression that there are some positive initial experiences, but the jury is still very much out on whether global payments are a major solution for ever-rising health costs. And then, as Paul Levy hammers home on his Not Running A Hospital blog here, there’s the transparency problem: It’s awfully hard to tell how well even initial global payment experiments are working when so many of the financial figures involved are not publicly available.

Well, at least I picked up a couple of wonderful new analogies: In Pippin’s piece, Dana Safran of Blue Cross says that the current fee-for-service system creates a mentality of “If you’re paying, I’ll have the lobster.” In contrast, the story’s headline describes a global payment system as “prix fixe.”

Q&A: Putting The Shingles Vaccine On Your Medical To-Do List At 50

Ouch. A case of shingles, also known as herpes zoster

I’m terrified of shingles. My grandmother described the pain as the most excruciating of her life, far worse than childbirth. A family friend not only had shingles but a hideous after-effect called post-herpetic neuralgia, which I would translate as “endless torture,” or perhaps “hell on earth” — months and months of unbearable agony. (Read the basics on shingles here.)

So when the news broke late last week that the FDA had lowered the cut-off for shingles vaccine approval to age 50 and above — the previous cut-off had been 60 — I wondered how quickly the new federal guidelines would translate into actual vaccines at our doctors’ offices. Since it was first approved in 2006, the shingles vaccine — called Zostavax and made by Merck — has brought a mix of headlines: some laments that seniors were not taking full advantage of it, other complaints that shortages made the supplies spotty, and that insurance coverage was spotty as well.

I spoke this morning with Dr. Ben Kruskal, director of infection control at Harvard Vanguard Medical Associates, and an expert on vaccines. My takeaway: Wait a few weeks for the dust of the new approval to settle and health insurers to decide about coverage. But then it’s worth putting the shingles vaccine on your medical to-do list if you’re over 50 — and even then, it may be a few more months until the supply catches up with your demand.

Dr. Ben Kruskal


Our conversation, lightly paraphrased:

Q: Why has the recommended cut-off just dropped from age 60 to age 50?

A: Clinical trials have now demonstrated that the vaccine’s benefits extend down to age 50, so that has changed the recommendations of the CDC vaccine panel. It’s not that anyone thought it wouldn’t be beneficial to younger people, but companies seeking licensure try to pick a group in which there’s a very clear and dramatic effect, and it’s very clear that shingles is much more common in older people. All along there has been the thought that they probably would push it younger, and that’s where we are now. There will undoubtedly be some age at which it’s not worth doing, but at this point the cut-off is 50.

Q: How are you translating this for your patients? Will you move immediately to suggesting the vaccine for patients between 50 and 60?

A: Before we make a widespread recommendation, we want to wait and be able to tell our patients whether health insurers will pay for it or not. It’s likely they will. In general, the health insurers follow the CDC vaccine recommendations, though with expensive vaccines like this — Zostavax costs about $200 — there are starting to be some holes in that patchwork.

Q: Do they pay for it now for 60 and above?

A: Most do. All the major payers that we work with do cover it. The complication comes for Medicare patients:  It’s not that it’s not covered, but it’s covered under Medicare Part D, which makes the payment for the vaccines very complicated instead of being straightforward. The patient has to take the prescription for the vaccine from the doctor to the pharmacy, and then bring the vaccine — which has to be kept frozen — back to the office to have it administered.

Q: That sounds stupid. Is there a movement to change that?

A: As far as I know, there isn’t. But I’ve heard of at least one company springing up that is trying to handle all the paperwork and make it possible for doctors’ offices to just stock the vaccine and get reimbursed for it.

Q: So what should fiftyish people do at this point? Continue reading