Health Care On A Budget: The Early Results

As the state ponders a move to global payments to improve care and control health care spending, there is early evidence the strategy works. Eight hospitals and physician groups that have been under this new payment model through Blue Cross Blue Shield for at least a year are releasing the results. The groups all came in under budget and scores show they improved care.

The verdict is out on whether patients like the change.

The hospitals and doctors involved in the new payment system said the move to global payments is a big deal. Doctors and hospitals receive a yearly budget for all their Blue Cross patients, instead of getting paid for every office visit, test and procedure. The goal is to save money while providing better care.

Quality Of Care Under A Global Payment System

So let’s look at how these providers did in their fist year in three areas: cost, the quality of care and patient satisfaction. On quality, Blue Cross said at least twice as many patients under a global payment got cancer screenings, regular check-ups and kept their diabetes or heart disease under control as did patients in traditional plans.

Doctors at Tufts Medical Center boosted their patient quality scores, in part, by creating a registry of patients with a chronic disease and assigning nurses to track who needed a test or an appointment. Jeffrey Lasker, CEO at the Tufts Physician Network, said the registry "helped us identify the patients who are in need of screenings or other follow-up measures, so that’s been very highly effective."

Costs Could Be Cut Under New Payment Model

On costs, Blue Cross has pledged that over five years, the move to global payments will cut rising health care costs in half. Instead of going up at roughly 10 to 12 percent a year, the increase would be 5 to 6 percent.

So are these providers on track?

"We can definitely say that they are saving money versus what we would have anticipated at the time," said Patrick Gilligan, Blue Cross senior vice president for Health Care Services.

Health care spending overall is down with the economy, but Gilligan said putting providers on a budget is also prompting them to be more efficient.

Blue Cross highlights two small examples of changes that are saving money. The number of patients readmitted for complications after surgery is down at a savings of about $1.8 million and the insurer said physicians at Brockton Hospital saved $300,000 by reducing visits to the emergency room. Patients often go to an emergency room in the evening or on weekends when their doctor’s office is closed.

For Patients, More Convenience But Fewer Choices

Marcia Goslin is a nurse in a Brockton physician’s office that is open for patients after hours. Goslin said the extra hours are important, "especially [for] moms with a sore throat, who aren’t feeling good, and they don’t have anyone to watch their kids until their husband gets home," Goslin said. "We have a lot of people who are coming in, vomiting, and need hydration. We take care of them just the way they would during the day."

But while patients are seeing more conveniences under global payments, they are also experiencing new limits on their choice of hospitals and specialists. To stay on budget, doctors try to keep patients in their network when they need to see a specialist or go to the hospital. Bob Weinstein, chief of family medicine at Signature Healthcare, the group that owns Brockton Hospital, is frustrated that Blue Cross isn’t explaining this to patients.

"We are told, the patients are told, they need to stay within our network," Weinstein said. "When patients call the insurance companies, typically, they’ll get a different instruction, [which is], you can go anywhere as long as Dr. Weinstein signs the referral. That puts me in a very difficult position."

Weinstein said he can better coordinate care if a patient sees a colleague at Brockton, and he doesn’t like arguing with patients about where they can go or who they can see.

Blue Cross has a new customer service line specifically for patients whose care is now under a global payment system. Patients routed to these lines are now told, "Your primary doctor knows what's best for you," not, "You can go anywhere as long as you get a referral." Blue Cross said patients will have more confidence in the change to global payments if they hear about it from their doctor.

Which brings us to the third test for these hospitals and doctors after one year on a global payment: what do patients think?

Overall patient satisfaction scores are no better than they were before.

More Hospitality At Hospitals

In response, hospitals are trying all kinds of things, including free valet parking and WiFi in waiting rooms. The Mount Auburn Cambridge physicians group has hired a hotel consulting firm to help doctors, nurses and staff with the patient version of customer service. President of the Mount Auburn group, Barbara Spivak, said doctors have to improve on every measure to make this global payment contract work, because the budget gets smaller every year, "so each year it gets significantly harder and at some point you won’t make it on the budget piece."

Blue Cross offers bonus payments for better patient quality and patient satisfaction scores. The company’s CEO, Andrew Dreyfus, said the impact of global payments, with the commitment to improve quality while cutting costs, is rippling beyond the providers who have signed on.

"That commitment alone has really influenced the whole market because it’s gotten physicians and hospitals to think differently," Dreyfus said.

Dreyfus said the next steps for doctors and hospitals under the global payment system will be persuading patients that the best known hospitals aren't the only places to get great care, helping patients with chronic conditions get healthier — or at least not worse — and then looking at which doctors are doing the best job and following their example.