Payment Reform Commission Goes Bold

Secretary Leslie Kirwan opened today’s Commission meeting by saying that they should act boldly with their recommendations for payment reform. And they did, settling on global capitated payments as their preferred payment model.

With a brief overview of the agenda and coming attractions for the next meeting (a conversation about Medicare), Commissioner Iselin invited some DHCFP staff up to set the scene with data on the Massachusetts health care (data slides and other materials are here). Consultant Michael Bailit than did a brief review of the payment models before engaging the Commission in a discussion about each. Throughout the discussion several members reminded the group that the patient is a key component to any changes.

First up was Fee-For-Service. Not surprisingly, Commission members felt this was a weak payment model and while it has a few redeeming qualities, this system promotes volume and does not reward quality. Episode-of-care payments received much more discussion and were thought of as a possible transition to global payments. Global payments received the most attention, though with concerns about risk for providers. Michael Bailit then briefed the group on the stakeholder positions on each of the models, which were all over the map save for a desire to align pay-for-performance incentives across all payers.

At this point, the meeting converted from general discussion to the real thing. Michael Bailit presented a series of questions, leading into the Commission recommendations. There was a consensus about questions one and two. The rest engendered lots of discussion and were enlightening about the challenges facing this Commission:

1. Is there one model we prefer over all others for the long-term? (the answer is yes- global payment: set payments to a provider who is responsible for all care (and at risk for the cost) for the patient)
2. If yes, can the entire delivery system eventually utilize this model? If no, what is the desired alternative? (Yes, they said)
3. What needs to be done to support providers and facilitate the transformation? (lots of ideas, from better IT support, to patient and provider education, pilots and intermediate steps)
4. What role should government play? (lots of ideas, from setting rates, equalizing resources, and limiting new facilities)
5. What needs to be done in the short term? (lots of ideas, from freezing payment rates, to using federal funds, to using state purchasing power)

There was a short diversion to discuss potential transition steps to get from our current system to a global payment system. This included recommendations about building primary care capacity and providing education to physicians. Many of the ideas generated by the Commission involved spending financial and political capital- two things that are not necessarily in abundant supply right now. There was also some discussion of what the providers were going to give up and what the insurers were going to give up in the short term to make the long-term goals possible. What’s on the table? Apparently everything. Where is this going? There’s a strong determination to reach real, big recommendations. The next meeting is next Friday, April 10, from 11-2 at 1 Ashburton, 21st floor, Boston.
Georgia J. Maheras