The Politics Of Health Care Payment Reform

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Been there, done that…sort of. Massachusetts passed a health coverage law in 2006. Now some state leaders say it's time to move agressively to control health care spending. A special state commission is mapping a plan to redirect billions of health care dollars. The idea is to spend less by rewarding doctors for helping patients stay healthy instead of rewarding them for delivering unlimted care when patients get sick. If that sounds straight forward its not. We frame the politics of trying to sell this major change to the business community, the public and politicians on Beacon Hill.

First, lets establish, this is big undertaking that would touch the lives of virtually everyone in Massachusetts. The Special Commission on the Health Care Payment System is proposing to reorganize the way more than $55 billion is spent on health care in this state every year. With that much money at stake, those involved and those watching were surprised that a diverse group of commission members agreed early and easily to throw out the way things work now, where doctors and hospitals are paid based on how much care they give sick patients. And then almost as quickly and easily, they decided to replace it with this thing called “global payments.”

LESLIE KIRWAN: The fact that this group so quickly came to that conclusion makes me very confident that this is the right model.

Leslie Kirwan is one of the payment commission co-chairs. As Secretary of Administration and Finance, she would be one of the key figures trying to translate the commission’s plans into action.

KIRWAN: There’s no doubt that the fact that we’ve all pointed to global payments as the way of the future is easy as compared to charting a thoughtful, workable transition for how to get there.

The commission is working on a strategy to gradually transition each part of the state’s health care system to this new way of paying for care over 5 years. The transition will probably include requiring that you chose a primary care provider. That doctor or nurse practitioner would have to join a network that includes labs, a pharmacy, maybe a community health center and a hospital. The network or organization would get one annual payment, based on your age, or other factors, no matter how many services you use. If you stay healthy, or your doctor helps you stay healthy, the organization does well, if you don’t the providers could lose money. The commission says there would be incentives so that doctors would not limit necessary care or reject the sickest patients.

HURMON HAMILTON: This is one of the most important conversations that is happening in the commonwealth. It’s going to have long term implications.


But Reverend Hurmon Hamilton, with the Greater Boston Interfaith Organization is not happy with how that conversation is going so far.

HAMILTON: Consumers have not been central, like in health care reform. We were at the very center of passing it. So I think the process to date has been flawed to the extent that consumers have not been at the center and that needs to be corrected.

Convincing consumers that this change will improve the care they receive…not restrict it is essential to “selling” this idea. And so far…consumer groups are watching from the sidelines. Global payments are a form of capitation or managed care…the system reviled for denying care in the 1990s. Supporters say this version is different because doctors would get bonus payments for keeping patients healthy. Celia Wcislo, with SEIU in Massachusetts, says persuading people to try managed care again might work with the right goal.

CELIA WCISLO: Is it just to squeeze cost out of the systems or it to develop a better, more logical and healthier delivery system. If it’s for the 2nd, this is a struggle worth having.

A third cautious consumer group…Health Care for All…says if patients are going to try managed care again, this time, they will expect to see who is being paid to do what and why. Brian Rosman is the group’s research director.

BRIAN ROSMAN: It’s going to take some considerable protections to make sure that consumers are comfortable. This could be very helpful or very dangerous and we want to make sure it is implemented in the right way.

Business groups agree there is a right way and wrong way to move towards global payments…but for different reasons. Jim Klocke with the Greater Boston Chamber of Commerce favors taking the first steps towards global payments …such as helping doctors adopt electronic health records. But he doesn’t like the idea of government forcing providers to adopt a new payment system.

JIM KLOCKE: Then monitoring that new system and imposing very heavy price caps and price restrictions if it’s not going the way they want it to. That’s a very strong approach. There’s a long history that says, when you do that it backfires. It usually causes more problems that it solves.

The commission is considering a board that would intervene if hospitals or doctors aren’t moving quickly enough towards global payments. Some estimates show that 20% of providers in Massachusetts already use a similar system. But Partners HealthCare CEO James Mongan says more than half the doctors and hospitals in the state are not set up to provide or manage all of a patient’s care…and aren’t ready for the financial risk.

JAMES MONGAN: This is vital enough, to not only 1/7th of the economy but importantly the lives of patients throughout the state, that I think people want to be careful that they’ve not taken steps in the dark, but that they’ve gone ahead with their eyes wide open.

Mongan suggests that once the commission’s report is done…the legislature should take 6 months or a year to study the challenges of such a major change. Which brings us to the politics of getting this done. You have cautious or leery stakeholders, a legislature that is preoccupied with the budget and angry at Governor Patrick for his critiques of their major bills…and a Governor who plans to be in the thick of a re-election campaign next year. Massachusetts Taxpayers Foundation President Michael Widmer wonders whether there will be the political will to move another major health care measure.

MICHAEL WIDMER: Given the fact that we’re in a global economic meltdown and have a full legislative agenda. I think as the question of the very difficult details emerge and the politics surrounding that; I think it will become a vastly more difficult proposition to undertake something like this than the health care access reform of 3 years ago.

But the Patrick administration says, to deal with its budget shortfall and to keep the health coverage law afloat, the state has to control health care spending. Senate President Therese Murray says she supports the concept of global payments. In the House, Health Care Financing chair Harriet Stanley, who is on the commission, says she expects her colleagues will eventually support global payments as well. But she anticipates a multi-year, difficult debate.

HARRIET STANLEY: There are going to be winners and losers in this solution. Everyone is going to have skin in the game. And it’s going to be convincing some forces that we just simply have to change the way we do business right now. Obviously, that’s benefiting some folks more than others and we need to level the playing field a little bit.

Massachusetts would need significant federal support to restructure the incentives that drive doctors and hospitals to deliver more care…even when it is not helpful. Commission members say so far it seems the Obama administration is reviewing similar changes. And federal Medicare leaders have expressed interest in working with Massachusetts on a pilot plan that would align federal spending with the changes the commission is considering.

Martha Bebinger

This program aired on May 27, 2009. The audio for this program is not available.

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Martha Bebinger covers health care and other general assignments for WBUR.