'Payment Reform Can Be Better For The Patient' by David F. Torchiana, MD

Managing health care costs by changing the way providers get paid is a hot health care reform topic. Proposals for doing so are plentiful. What if we could improve care for the sickest of our patients and also reduce costs?

Last August, I used this space to describe a demonstration project underway at MGH. Working with the federal Centers for Medicare and Medicaid Services (CMS) we have been testing whether we could better manage the care of 2,500 of our sickest Medicare patients, avoid hospitalizations and save money. Almost three years into the program, it looks like we have and CMS has asked us both to extend the program for three more years and to replicate our results at another site.

These patients and their physicians are coping with multiple complicated problems. In addition to their medical issues, half have a psychiatric diagnosis, like dementia or depression, and nearly a quarter are near the end of life and die each year. Over the course of this demonstration, we have reduced their emergency room visits, hospital stays and readmissions to the hospital. It’s not uncommon for our care teams to hear that the program has “transformed” a patient’s life. We have also covered our costs and produced net savings compared to a rigorously selected matched control population.

Importantly, this hasn’t happened by denying care, but rather by delivering more care in a more timely way and averting the costly problems that develop when the ball is dropped. This is hard work but patients and doctors are overwhelmingly positive about the program according to our surveys. Healthcare outcomes have also improved.

Several early design decisions contributed to this success. First, and unlike similar efforts sponsored by insurance companies or “disease management” firms, this program is based in the physician’s office, with additional staff whose job it is to maintain a connection to the complicated, chronically ill patient, anticipating, preventing and resolving issues before problems arise. As a result, over 90% of eligible patients chose to enroll. An electronic medical record and other e-tools are the backbone of the program, creating a single repository of all important information and alerting the care team if the patient arrives in the emergency room or has a troubling test result.

Finally, and significantly, the program makes possible the upfront investment in staff support that enables the physician to manage the care outside the traditional fee-for-service model. Without this change, our physicians would be providing more care and getting paid less, stuck in the same rut that we have been battling for decades.

Ironically, a recent Boston Globe story on our program earned mixed reviews from readers who commented. Many misinterpreted the program goals as an attempt to withhold care and missed entirely the point that, by improving systems, critically evaluating the care that is provided and increasing prospective support to the patients, we have improved quality and reduced the need for costly services after problems develop. The result is more appropriate care at a lower overall cost. Payment reform can be better for the patient and better for all of us.

David F. Torchiana, MD
Massachusetts General Physicians Organization