Step 1: Get Everyone Health Insurance. Step 2: Afford It

Let’s say you’ve had a sore throat for a few days and finally decide it’s time to see the doctor. In the exam room, you say, 'Just give me an antibiotic and I’ll get on with my day.' Your doctor’s rushed, so she says, 'Fine, feel better,' and sends the insurance company a bill.

Two days later, the antibiotic didn’t work, you’re back at the doctor. Now let’s replay that visit, but this time you’re covered by a global payment. That’s a budget. If the doctor sticks to it and keeps you healthy, she makes more money. That antibiotic — not appropriate — it would count against her.

In this visit the doctor tells you sore throat could be flu, mono or HIV. She does a few tests and asks if you want to see an infectious disease doctor. Sounds pretty good until you remember that ache in your back, ask for an MRI and she says, 'No, go home and rest' (OK, we’re stretching a bit to illustrate what supporters like about global payments: they encourage doctors to provide more care up front).

On health reform, Massachusetts deliberately tackled coverage first. But the harder “what to do about costs” question was always lurking just beneath the surface. Now, with health care spending expected to nearly double over 10 years and budget cuts threatening the coverage law, many state leaders say it is time to get serious about controlling costs growth.
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A special commission is sending the legislature a major overhaul that will affect virtually every resident in the state. It’s a return to managed care, but this time the incentives are to give patients more care, and earlier, as opposed to less.

"This is a sea change," says Dolores Mitchell, who's on the commission that recommended making global payments the main health care payment system statewide within five years. "We’re suggesting a total revision in the way procedures work and the way billing works and the way doctors relate to one another, and to the hospitals with which they affiliate," Mitchell says. "That’s a very meaningful change."

Some might say difficult or challenging. Let’s go back to that second office visit. If you don’t have a primary care doctor now, as patients in HMOs do, you’ll have to chose one. If your doctor is not part of a health care network that includes specialists, labs and probably a hospital, she’ll have to join one. That network would take its pool of Tufts or Fallon members, look at how much care they used last year, their age, sex and some other factors, and then negotiate a global payment with the insurance company.

One in five doctors in the state are already paid through an arrangement like this, but many doctors and hospitals don’t have any experience creating budgets based on the cost of treating their patients.

Massachusetts Hospital Association President Lynn Nicholas says they are worried, especially when it comes to accounting for income, language differences or other socio-economic factors. "That’s a huge concern to the hospitals who are on the bleeding edge, as we say, right now and physicians who are in those communities," she says.

Nicholas says the main issue for her members is how to finance the electronic health records all hospitals and doctors would need to coordinate patient care. Providers who are already part of a larger network or who are already using an electronic health record would likely move into the global payment system more quickly than others.

Blue Cross has been marketing a global payment plan for more than a year now and the insurer says there’s a lot of interest.

Alice Coombs, with the Massachusetts Medical Society, says many of her members will need at least five years to make this transition. "We must be as tenacious about supporting the providers out there who don’t have the infrastructure as we are about our commitment to transition to global payment," she says.

The medical society and the hospital association have both endorsed the move to global payments. They are endorsements with caveats, but these two important groups are on board, as are Gov. Patrick, Senate President Therese Murray and House Speaker Robert DeLeo. House and Senate leaders plan to turn these complex recommendations in to a bill sometime this fall.

Rep. Harriett Stanley, who joined the unanimous commission vote recommending global payments, expects a difficult race. "You might liken this process to a marathon and we have just lined up at the starting gate and are beginning our run," she says. "There has been some pushback already. I think the unanimous vote today told me we have some cover in terms of dealing with that. But, we have to come out with a resolution whether or not both sides agree."

MIT economist Jonathan Gruber says moving to global payments may be more difficult in Massachusetts than in most other states. "The only way that new paradigm ultimately saves money is if providers in the end don’t make quite as much money," Gruber says. "Politically, this is a very powerful interest group in our state, more so than in most states. So its going to be a hard group to really reduce their reimbursement."

Consumer groups are also wary, waiting to see how their interests are protected as this plan moves forward. Restructuring health care spending is a major topic in Washington, D.C., these days, too. Massachusetts will need to keep a close watch on which ideas gain traction there, but so far global payments and the creation of these health care networks called Accountable Care Organizations (ACOs) are in line with the national discussion.

Elliot Fisher, who directs Dartmouth's Center for Health Policy Research, coined the ACO concept. He’s excited to see it tested in Massachusetts. "Having a place that’s the scale of Massachusetts to evaluate the model and figure out how to improve it, that’s really what we need to do if we’re going to create the kinds of change we need to create," he says.

Some providers are grumbling about being the guinea pig in the Bay State’s latest health care reform test case. The commission’s co-chair, Leslie Kirwan, says the state’s experience with the health coverage law will help as it tackle costs. "It has shown us that very difficult tasks can be tackled, can be broken down, can be worked on over time in phases," she says.

The commission does not have a savings estimate. Some members say global payments could reduce spending $1 billion a year by ending preventable hospitalizations, readmissions and unnecessary emergency room use. They argue greater global payment savings will come as over time as the incentives that drive unnecessary care vanish.