Today, the Health Care Quality and Cost Council (HCQCC) held a special meeting to discuss the long awaited RAND report. The RAND report is a document that models how Massachusetts can best control health care costs. The evaluators looked at over 75 different options and fully evaluated 21 of them to see how each could reduce health care costs. The effect of these measures on quality and prevention was also threaded throughout today’s conversation.
The researchers from RAND provided a summary of the report (see the meeting materials here) that predicts how much savings can be wrestled from the health care system in the next decade. The potential savings are modeled for each option separately. Additionally, RAND did not put options together to see how much of an impact could be had when multiple options were implemented simultaneously. This will be evaluated in the Roadmap to Coverage (due out in early September). The first option they discussed was bundled payment (note that RAND defines bundled payment as time constrained or condition constrained. It is a smaller payment than global payment. See our blog here discussing bundled payments). The analysis relied heavily on Prometheus’ payment model and the prediction is that bundled payment can save up to 5.7% of health care costs.
Next up, they discussed changes in reimbursement rates to providers: Hospital rate regulation and paying Academic Medical Centers based on community rating, saving up to 4% and 2.7% respectively. Elimination of reimbursement for potentially preventable readmissions saves up to 1.8%. There was limited discussion of these potential savings including political issues surrounding rate regulation, volume of care delivered, the impact of Medicare on impatient stays.
The next group discussed were categorized as infrastructure development. These are things that may be necessary, but in and of themselves are not sufficient to reduce spending. They include: increasing adoption of Health Information Technology, Encouraging the use of Nurse Practitioners and Physician’s Assistants, and promoting the growth of retail clinics. These range from a 0.9-1.8% potential savings each.
The final group included items that require an up-front investment, but it is unclear if there savings: medical homes, use of co-payments for medications, and certain types of disease management programs.
RAND also evaluated three options where they feel the savings are uncertain, but they recommend pursuing the initiatives anyway: comparative effectiveness, prevention, and administrative simplification.
There are many more details in the report found here (.pdf).
- Georgia J. Maheras, Esq.
Private Market Policy Manager
