Beth Israel Doctors Take Risk For Managing Care

BOSTON — If you feel the earth shaking near Beth Israel Deaconess Medical Center in the next few months, it may be the rumble of 1,800 physicians adjusting to a new way to deliver and get paid for care. These doctors are the latest and largest physicians group to sign a global budget contract for HMO patients at Blue Cross — and many are uneasy.

“There’s guarded optimism, there’s outright anxiety, there’s everything in between,” said Rich Parker, medical director at the Beth Israel Deaconess Physician Organization.

Parker and other leaders are convinced that moving away from a system in which doctors are paid based on volume, regardless of quality or need, to one with bonus payments for keeping patients healthy makes sense. A growing number of doctors and hospitals is taking this admittedly risky step.

Parker argues that the move to global payments will help correct a basic flaw in medicine today — paying doctors based on how many patients they see, tests they perform or procedures they do.

“More care is not always better care and, in some cases, it’s worse care,” Parker said. “We’ve all heard of situations where somebody got a procedure that caused a complication and in retrospect questions were asked, ‘Did they really need that procedure?’ So all of this extra doing is not necessarily benign.”

Now, instead of getting paid for every visit, test and procedure, doctors at Beth Israel will receive a budget to care for their 75,000 to 80,000 Blue Cross HMO patients. If the physicians group goes over-budget they split the loss with Blue Cross. If they come in under budget, they share the surplus, based on how much they improved the care of patients with say, high blood pressure, cholesterol or diabetes. If the doctors can’t show improvement in patients’ conditions or that patients are getting more preventative tests, they don’t share the surplus.

Rich Parker, medical director at the Beth Israel Deaconess Physician Organization (Martha Bebinger/WBUR)

“There’s no incentive in this contract whatsoever that for any individual patient, spending should be limited for any reason,” Parker said.

Parker says the goal will be to give patients everything they need, especially preventive care.

“But it also means that I’m not going to offer you things I think are worthless,” Parker said. “And if you ask me for something that I think is worthless I’m going to explain to you why it’s not in your interest to get a test or procedure that’s of no benefit to you.”

There will be both health and financial incentives to keep patients at Beth Israel Deaconess. If patients go to some other hospital, these doctors would have to pay the rival hospital’s bill and may not have easy access to their patients’ records.  Both Beth Israel and Blue Cross say the contract will save money over time but they are not sharing details.  Primary care doctors will take the lead in managing a patient’s care under this contract — and that’s where another major change comes in.

“There will be a shift of resources to primary care and away from specialists,” said Stuart Rosenberg, president of the Beth Israel Deaconess Physician Organization. “The best specialists will be as busy as ever; there may be some at the margins that go into other kinds of work, it’s just part of the equation.”

The idea that Beth Israel will need fewer specialists under this contract is raising the anxiety of many doctors, but WBUR did not speak to any who were willing to say so on the record. You can imagine the list of physician worries: job security, salary, losing autonomy. But Parker and Rosenberg argue that doctors are already feeling threatened and, in the long run, they’ll be happier under a global payment.

Signing the Beth Israel doctors to the so-called “Alternative Quality Contract” is a big deal for Blue Cross. CEO Andrew Dreyfus says it’s the largest physicians group since the insurer started advocating for this contract two years ago.

“It’s rooted in a group that initially was skeptical,” Dreyfus said. “It took a long time for the group to come around and I think by the way our discussions with them improved (the contract).”

Doctors will determine if this new way of paying for health care improves quality while lowering costs, and “the early evidence is very encouraging,” Dreyfus said. “Quality is improving at a faster rate with physicians who are practicing under our new payment model than with physicians who are outside of our payment model.”

Dreyfus says hospitals and physicians groups working under the Alternative Quality Contract are meeting their budgets and producing surpluses. With this contract, 40 percent of Blue Cross members in a HMO plan would be covered under a global payment. The state’s largest insurer is getting national attention for its high-profile push to put hospitals and doctors on budgets. But what has not been apparent until now is that the state’s second- and third-largest insurers are also moving, more quietly, in the same direction.

“Quality is improving at a faster rate with physicians who are practicing under our new payment model…”
– Blue Cross CEO Andrew Dreyfus

“At the beginning of this year, about 15 percent of our members were on a global payment. By the end of this year that will be close to 30 percent,” said Jim Roosevelt, the CEO of Tufts Health Plan. He expects the momentum will continue next year. At Harvard Pilgrim Health Care, 20-25 percent of HMO members are in similar contracts. CEO Eric Schultz says Harvard Pilgrim is tailoring contracts to fit the growing list of providers who want to try managing a health care budget.

“What we don’t want to do is think there is one model that can be applied to every clinical care delivery system,” Schultz said. “If we do, we will all fail and we will lose a really great policy idea because we tried to apply it too fast or too broadly.”

Which raises the question, if private insurers are moving in this direction without a new law, what role should state lawmakers take as they draft legislation aimed at controlling health care costs? Roosevelt says the state should make the wide difference in what hospitals are paid more public and focus on bringing government health plans under a global budget.

“To make this work ultimately to both increase quality and lower cost, Medicare and Medicaid are going to need to participate in this,” Roosevelt said.

For the moment, we are living in a gallimaufry of payment changes and incentives that may make doctors edgy and leave patients wondering how all this effects them. The advice from two groups that focus on health care advocacy is… ask.

“Consumers ought to understand, before they even get sick, how are the doctors being paid, what are they incentivized to do?” said Paul Hattis, a physician who teaches public health at Tufts Medical School and a member of the health care strategy team for the Greater Boston Interfaith Organization.

The group is urging all of us to find out what payment system our doctors work under and, specifically, whether there are bonuses tied to managing one of our conditions, diabetes or asthma, for example. Hattis admits that finding out may not be easy.

“I ask doctors, hospital administrators, all sorts of folks that I know in the health care field … how are the providers being paid? They don’t know,” Hattis said.

Doctors, hospitals and insurers have to be upfront with patients, especially because patients have bad memories of the last wave of managed care, said Brian Rosman, research director with Health Care for All.

“Patients need to understand how their care is being paid for and what are the incentives that are guiding their doctors,” Rosman said. “For example, in the ’90s, people got the sense that their doctors were getting rich off of providing less care and we don’t that to be repeated, of course.”

Rosman says global payments done well would be a big improvement in costs and care. If done poorly, patients won’t get what they need. So next time you have a routine office visit and you’re feeling adventurous, ask your doctor, am I covered under a global budget or the more traditional fee-for-service payment model? Let me know what happens.

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  • http://www.runningahospital.blogspot.com Paul Levy
  • Marcie Richardson

    Martha Bebinger’s final comment on her otherwise excellent report on global payment for health care finished encouraging patients ask their doctor how he or she is paid. She failed to mention that although how doctors are paid should be transparent, with respect to any given patient we (yes, I am a doctor) often have no idea how we are paid-each person’s insurance is different,

    Doctors, patients and payors must collaborate to deliver and receive “all and only needed care”.

  • http://www.fchp.org Dave Przesiek

    Martha Bebinger’s piece is spot on. I work for Fallon Community Health Plan and our most successful member outcomes based on both quality and cost have been with providers that we have global payment agreements with. For more information on the results.

  • Martha Bebinger

    Hi Dr. Richardson – thanks very much for your comment. I realize, as Dr. Hattis, says in the story, that most doctors do not know and may not have time to look into the payment arrangements for each patient’s insurance plan.

    Can you help me think about how patients can get more engaged with this issue while not frustrating doctors? We hope to promote these conversations, with some online tools, but want to suggest a positive, not adversarial approach.

    My e-mail is marthb@bu.edu if you want to move the conversation off the website.

    Thanks again, Martha

  • http://www.fchp.org Dave Przesiek

    As a payor we would be open to participating in an online forum to discuss the issue that Dr Richardson brings up. We spend a considerable amount of time communicating with our members and recognize that the providers need to be part of that communication, as the plans we offer continue to evolve.
    If interested email me at david.przesiek@fchp.org

  • http://integratedbehavioral.org Michael Goldberg, Ph.D.

    The new healthcare model will help breakdown the artificial division between mind and body created by carving behavioral health out from general health. This reunification of mind and body in the health care system holds great promise to finally allow health care to take advantage of the huge wealth of evidence for behavioral health services that will improve patients lives while leading to huge financial savings in all of health care. Let’s hope the policy makers are sophisticated enough to support the effective and cost effective use of evidence based behavioral health services in the new health care system.

  • Tim Tierney

    Most FP’s I know are anxious to get going with these global payment arrangements. These arrangements fit well with the philosophy of the holistic primary care training Family Practitioners received in residency and in on our going CME. Up to this point, we have remained confounded by the upside down supply of specialist to primary care, which has confused our patients about what is the community standard of health care provision. Hopefully, the best and brightest coming out of medical school will now look harder and longer at primary care, and the medical school faculties will not discourage their interest.

  • Mitchell T. Rabkin, M.D.

    This new contract between the physicians at BIDMC and Blue Cross corrects the fundamental failure of the fee-for-service arrangement typical of Medicare, Medicaid and most private insurers. In these long-standing payment systems the physician is not accountable for costs nor does he or she have any leverage over the costs incurred by any physician to whom the patient may be referred. So, what can you expect with a system where (a) there is no budget, and (b) no one is accountable for costs? No one would run a business that way and survive! With health care, the result is more and more cost escalation and, in the absence of sensible change such as the BIDMC physicians have acccepted, the insurers have only the fake “remedy” of cutting down the pay for each visit, diagnostic test and treatment procedure. That leads to inflation of visits, tests and procedures, shortened times for each doctor visit, unhappy patients and doctors, declining interest in primary care as a career paired with growing interest in specializing, and further escalation of costs. As Dr. Donald Berwick, now head of Medicare said: Every system is perfectly designed to achieve the results it actually gets. A colleague, John S. Cook, and I have been arguing since 2002 for a new system similar to what has sensibly been taken on by the physicians of BIDMC. It is an important start and another example of the forward thinking and action of that institution and its staff.

  • Randy Willow

    I applaud BI, but I wonder if this has anything to do with the fact that all the other insurance companies in Massachusetts are now offering “tiered networks” Basically, if you agree not to use any of the Harvard teaching hospitals for your care (BI included) you can get cheaper premiums. Needless to say, the citizens of Massachusetts, who have been robbed by these money-grubbing hospitals, are opting for the “Harvard-hospital free” insurance plans in droves.

    I also wonder how patients feel when they read this. Do they understand what has been going on? And when they read that EVERY SINGLE dollar the state has tried to add to the education budget has gone to pay for exploding health care costs? When they read about cuts to higher education, dental and vision care for the disabled, etc etc and RISING HEALTH CARE COSTS.

    Everybody will pat themselves on the back when they finally “solve” this problem. Think of all the doctors who have become millionaires over the last four years of this insane “health reform” and think of all the public services that have been cut, the teachers and firemen and police laid off (because the unions wouldn’t give up their gold-plated health care benefits, which lead to even more unnecessary care.) and the millionaire doctor specialists driving new cars.

    Not a pretty picture of ethics in medicine or among the unions I’d say. Together they have led the state and the nation to it’s disastrous financial state. About time they started doing something about it.

  • Alena Ashenberg M.D.

    Hello 12.18.2010
    I am a Pediatrician and actually use the BI system for my own care. The new contract means that there is an incentive not to see patients in the office for what seems “routine” illness and may not be, and there is a clear financial incentive not to order tests even when needed. Also a patient at BI absolutely can not see a physician from another hospital because BI gets financially penalized for it. The choice of the specialist is down to one hospital, and if you live far that is too bad.
    The patient certainly loses, probably the physician also and the Insurance Company gets richer. Have you ever seen your premium go down?? I have seen mine go up steadily.
    It is amazing how the insurance companies get away with it and nobody scrutinzes their large profits.
    Dr. Alena Ashenberg

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