Beth Israel Doctors Take Risk For Managing Care

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If you feel the earth shaking near Beth Israel Deaconess Medical Center in the next few months, it may be the rumble of 1,800 physicians adjusting to a new way to deliver and get paid for care. These doctors are the latest and largest physicians group to sign a global budget contract for HMO patients at Blue Cross — and many are uneasy.

"There’s guarded optimism, there’s outright anxiety, there’s everything in between," said Rich Parker, medical director at the Beth Israel Deaconess Physician Organization.

Parker and other leaders are convinced that moving away from a system in which doctors are paid based on volume, regardless of quality or need, to one with bonus payments for keeping patients healthy makes sense. A growing number of doctors and hospitals is taking this admittedly risky step.

Parker argues that the move to global payments will help correct a basic flaw in medicine today — paying doctors based on how many patients they see, tests they perform or procedures they do.

"More care is not always better care and, in some cases, it’s worse care," Parker said. "We’ve all heard of situations where somebody got a procedure that caused a complication and in retrospect questions were asked, 'Did they really need that procedure?' So all of this extra doing is not necessarily benign."

Now, instead of getting paid for every visit, test and procedure, doctors at Beth Israel will receive a budget to care for their 75,000 to 80,000 Blue Cross HMO patients. If the physicians group goes over-budget they split the loss with Blue Cross. If they come in under budget, they share the surplus, based on how much they improved the care of patients with say, high blood pressure, cholesterol or diabetes. If the doctors can’t show improvement in patients' conditions or that patients are getting more preventative tests, they don’t share the surplus.

Rich Parker, medical director at the Beth Israel Deaconess Physician Organization (Martha Bebinger/WBUR)
Rich Parker, medical director at the Beth Israel Deaconess Physician Organization (Martha Bebinger/WBUR)

"There’s no incentive in this contract whatsoever that for any individual patient, spending should be limited for any reason," Parker said.

Parker says the goal will be to give patients everything they need, especially preventive care.

"But it also means that I’m not going to offer you things I think are worthless," Parker said. "And if you ask me for something that I think is worthless I’m going to explain to you why it’s not in your interest to get a test or procedure that’s of no benefit to you."

There will be both health and financial incentives to keep patients at Beth Israel Deaconess. If patients go to some other hospital, these doctors would have to pay the rival hospital's bill and may not have easy access to their patients' records.  Both Beth Israel and Blue Cross say the contract will save money over time but they are not sharing details.  Primary care doctors will take the lead in managing a patient’s care under this contract — and that’s where another major change comes in.

"There will be a shift of resources to primary care and away from specialists," said Stuart Rosenberg, president of the Beth Israel Deaconess Physician Organization. "The best specialists will be as busy as ever; there may be some at the margins that go into other kinds of work, it’s just part of the equation."

The idea that Beth Israel will need fewer specialists under this contract is raising the anxiety of many doctors, but WBUR did not speak to any who were willing to say so on the record. You can imagine the list of physician worries: job security, salary, losing autonomy. But Parker and Rosenberg argue that doctors are already feeling threatened and, in the long run, they'll be happier under a global payment.

Signing the Beth Israel doctors to the so-called “Alternative Quality Contract” is a big deal for Blue Cross. CEO Andrew Dreyfus says it’s the largest physicians group since the insurer started advocating for this contract two years ago.

"It’s rooted in a group that initially was skeptical," Dreyfus said. "It took a long time for the group to come around and I think by the way our discussions with them improved (the contract)."

Doctors will determine if this new way of paying for health care improves quality while lowering costs, and "the early evidence is very encouraging," Dreyfus said. "Quality is improving at a faster rate with physicians who are practicing under our new payment model than with physicians who are outside of our payment model."

Dreyfus says hospitals and physicians groups working under the Alternative Quality Contract are meeting their budgets and producing surpluses. With this contract, 40 percent of Blue Cross members in a HMO plan would be covered under a global payment. The state’s largest insurer is getting national attention for its high-profile push to put hospitals and doctors on budgets. But what has not been apparent until now is that the state’s second- and third-largest insurers are also moving, more quietly, in the same direction.

"Quality is improving at a faster rate with physicians who are practicing under our new payment model..."

Blue Cross CEO Andrew Dreyfus

"At the beginning of this year, about 15 percent of our members were on a global payment. By the end of this year that will be close to 30 percent," said Jim Roosevelt, the CEO of Tufts Health Plan. He expects the momentum will continue next year. At Harvard Pilgrim Health Care, 20-25 percent of HMO members are in similar contracts. CEO Eric Schultz says Harvard Pilgrim is tailoring contracts to fit the growing list of providers who want to try managing a health care budget.

"What we don’t want to do is think there is one model that can be applied to every clinical care delivery system," Schultz said. "If we do, we will all fail and we will lose a really great policy idea because we tried to apply it too fast or too broadly."

Which raises the question, if private insurers are moving in this direction without a new law, what role should state lawmakers take as they draft legislation aimed at controlling health care costs? Roosevelt says the state should make the wide difference in what hospitals are paid more public and focus on bringing government health plans under a global budget.

"To make this work ultimately to both increase quality and lower cost, Medicare and Medicaid are going to need to participate in this," Roosevelt said.

For the moment, we are living in a gallimaufry of payment changes and incentives that may make doctors edgy and leave patients wondering how all this effects them. The advice from two groups that focus on health care advocacy is… ask.

"Consumers ought to understand, before they even get sick, how are the doctors being paid, what are they incentivized to do?" said Paul Hattis, a physician who teaches public health at Tufts Medical School and a member of the health care strategy team for the Greater Boston Interfaith Organization.

The group is urging all of us to find out what payment system our doctors work under and, specifically, whether there are bonuses tied to managing one of our conditions, diabetes or asthma, for example. Hattis admits that finding out may not be easy.

"I ask doctors, hospital administrators, all sorts of folks that I know in the health care field ... how are the providers being paid? They don’t know," Hattis said.

Doctors, hospitals and insurers have to be upfront with patients, especially because patients have bad memories of the last wave of managed care, said Brian Rosman, research director with Health Care for All.

"Patients need to understand how their care is being paid for and what are the incentives that are guiding their doctors," Rosman said. "For example, in the '90s, people got the sense that their doctors were getting rich off of providing less care and we don’t that to be repeated, of course."

Rosman says global payments done well would be a big improvement in costs and care. If done poorly, patients won’t get what they need. So next time you have a routine office visit and you’re feeling adventurous, ask your doctor, am I covered under a global budget or the more traditional fee-for-service payment model? Let me know what happens.

This program aired on December 10, 2010.

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



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