Stay the Course: Deal with Payment Reform Now

Dolores L. Mitchell, Executive Director, Group Insurance Commission of the Commonwealth of Massachusetts, says health care costs continue to rise while the tough decisions on payment reform have yet to be made:

Some two months ago, the Special Commission on Payment Reform concluded its deliberations with a unanimous vote recommending a shift from a payment system based primarily on fee-for-service to one based primarily on global payments.

What was remarkable about the recommendation was that it was unanimous and that the decision to abandon fee-for-service was reached with virtually no dissenting voices.

Some skeptics have pointed out that many of the tough decisions have yet to be made, and this is certainly true. But the important point to remember and emphasize is that a group of people including physicians, hospital leaders, legislators, the administration, health plans (otherwise known as insurance companies) and economists made a public declaration that the current system in which doctors and hospitals are paid for each unit of service they provide has outlived its usefulness. This system has also become a barrier to the growing need for coordination of care, as well as acting as an accelerant to the growth of costs that are crowding out funding for other social needs.

Now that the “what” and “why” questions have been answered, the details that need addressing are the “where,” “how,” and “who” questions.

How can the various individual practicing physicians, labs, health plans, and hospitals get themselves organized into what are to be called "accountable care organizations" and who will take the lead in organizing them? How will it be determined who gets how much of the global payments, and who will determine what the global payment is? Who should sit on the board that will determine the goals and monitor the progress toward implementation, and who should select them?

When can all this get started, and how will it happen — through a legislative mandate or through administrative action? Who will do the necessary analytic work? And who will decide what services are inside the global payment tent, and which are outside? And a tough one: if patients can go outside the ACO at will, how can the group be held accountable? And cutting across all the questions is the particularly tough one in these fiscal times: where will the money come from to fund the implementation management?

These are not easy questions and the answers will not be easy, or quickly resolved. But every day of delay means that costs go up and reversing the curve of the growth in cost, or at least bending its angle, becomes harder and harder. Fortunately, the legislative Committee on Health Care Financing has already scheduled a hearing to get things rolling.

It is imperative to keep the momentum going and not to let the defenders of the status quo gain momentum in the interest of keeping things as they are. We’ve all been watching that happening in Washington with a fair amount of trepidation. The difference here is that while the Commission’s recommendation is not yet embedded in law and contract, it carries with it a rational solution to two enormous problems — improving health care quality, and lowering costs so that the access issue we so bravely addressed three years ago in Ch. 58, can survive and continue to be a source of pride and satisfaction to the Commonwealth

(The Group Insurance Commission of the Commonwealth of Massachusetts is the agency that provides life, health, disability, dental and vision services to 300,000 state employees, retirees and their dependents.)