Day 3 of health wonk boot camp. The crowd is getting a bit thinner, but there’s still lots of good discussion and learning. These hearings are accomplishing both of their goals. First, its providing a forum for getting in-depth data and analysis out into the public sphere. Just as important, it’s building a shared set of understandings among key health industry people and government about the policy changes we must enact soon to right our health care system. These understandings will enable the “stakeholders” to work together when it’s time to pass, and more critically, implement, the policy changes that are coming.
Today’s hearing focused on alternate payment methodologies and thinking creatively about the health care system in the 21st century. DHCFP posted all the reports, testimonies, or presentations from today’s experts, and the witness’ testimony. Our full report is after the jump:
The morning began with a review of the research findings on global payment and bundled payment methodologies. Susan Brown, Assistant Attorney General, reiterated in more detail what was presented on Monday regarding the Attorney General’s report. The main findings were that, as practiced today in Massachusetts, global payments to providers did not produce any significant total cost savings. The study found that the variation in prices paid to providers persisted even under the global budgets negotiated by carriers. So providers with a higher price structure carried those higher prices over into their global budgets.
Stacey Eccleston, DHCFP Assistant Commissioner, presented findings from a simulation of what is called the “Prometheus Model” of bundled payments. Basically, a bundled payment reimburses a provider for the provision of multiple services during a defined episode of care, either acute or chronic. The services paid for are based on best practice guidelines for particular conditions. The bundle rewards providers for avoiding a Potentially Avoidable Consequence (PAC). PACs, as the name implies, are preventable deficiencies in care that cause harm to the patient, and add to the cost of care. An example of this would be a hospital acquired infection resulting from an operation. In a typical fee-for-service system, a patient’s insurance would pay for both the operation and the infection (perverse incentives, right?). Under bundled payments like these, some providers could see a surplus if they do not incur PACs beyond the allowance, and some may see losses, if they did not take necessary precautions to avoid PACs. This will reward efficient, quality providers for preventing PACs and delivering quality care to a patient.
Harold D. Miller, Executive Director of the Center for Healthcare Quality and Payment Reform, served as the first outside expert witness of the day. He talked about how better payment systems can help improve quality and control costs. First off, he wanted to dismiss any consumer worries of ‘rationing’ care to save money. He believes that if we reform the health care payment system and align patient and provider incentives, no rationing of care will be needed, and patients will receive quality, efficient care. He opposes limiting patient choice, and he also endorsed paying for health care based on episodes of care, like the Prometheus Model of bundled payments, as a way to get to global payments. He compared bundles to getting a warranty on a TV or a computer. It wouldn’t make sense to have to pay for something that was the manufacturer’s fault, so it doesn’t make sense to pay more for a hospital acquired infection or other unintended consequence of care. He cautioned that warranties on health care services will, and should, cost more than unwarrantied services. Though it may cost more initially to purchase this, the system will realize savings as providers who issue warranties will reduce the frequency of adverse events and payers will actually save money by investing in care with warranty.
Miller cited health systems in the US that currently use bundled payments, such as Geisinger Health Systems in PA (which the afternoon expert witness also cited), and that by using bundled payments, Geisinger has realized major cost savings and reductions in complications and readmissions. The end result: cost savings to the system, and better care delivered to patients. Miller mentioned other health plans across the country that have used payment methods like these and have realized cost savings and reinventing their delivery models to give patients better, cost-efficient care. Some providers may worry that bundled payments or global payments are just capitation with a new name, but Miller encourages providers to think about global payments differently and not a repeat of capitation, which paid providers rates that were too low and not health status adjusted. Comprehensive care payment, he likes to call global payments, should pay providers more to care for sicker patients in order to limit the amount of risk providers must assume. One model he believes has done a good job in these areas is the Blue Cross Blue Shield MA alternative quality contract, which is a longer-term agreement between payer and provider to care for a patient and assume dual-risk for their health.
In order for payment reform to work, Miller mentioned six things that need to happen first: transitional payment reforms (medical home models, episode payments), supporting prevention and long term returns on investment, making providers accountable for what they can control (and not holding them accountable for things out of provider control), access to multi-payer data on costs and quality, develop better methods of controlling prices and being able to access data across multi payer data on cost and quality, and increasing patient support. The combination of payment reform and these six factors will lead to significant cost containment and enhanced quality in our health care system, Miller believes.
Miller served as a ruthless moderator for panelists Evan Benjamin, Senior VP of Baystate Medical Center, Joseph Berman, COO of Acton Medical Associates, Patrick Gilligan, Senior VP of Health Care Services for BCBS MA, and Nancy Kane, Professor at Harvard School of Public Health. Miller began the discussion by answering some questions about the Attorney General’s report, which he believes hasn’t addressed many of the issues that drive up costs, and can only be understood as one interpretation of global payments. Many of the panel members were in favor of a greater emphasis on primary care, and all argued that PPOs, Preferred Provider Organizations, should require members to select a primary care physician to better coordinate their care and make possible the use of bundled or global payments in PPO plans. The panel members also unanimously agreed that in 5-10 years, our payment system should be focused on global payments, though a certain amount of fee for service may be embedded in global payment systems. When asked about the greatest barrier to getting us to global payments, the panel members seemed to differ in their responses. Nancy Kane believes there should be an independent oversight body to make sure there is more transparency around cost and quality, which will allow consumers to trust providers. Others also believed we would need to get consumers on board, as well as government funded health insurance. When asked about the state’s role, all panel members agreed the state has a role in facilitating the shift to global payments, and helping with infrastructure to get there, though panelists differed in the extent to which they thought government should intervene. As we move forward, there was a unanimous decision that transparency needs to be improved in order for us to transition to global payment systems and realize cost savings.
In the afternoon, Stephen McCabe, Assistant Commissioner of the Division of Health Care Finance and Policy, presented results of a study that focused on total medical expenses (TME) across different regions in MA, both adjusted for health status and unadjusted. He explained that TME across Massachusetts varies by region, and much of this health status adjusted variation is caused by median income, where the regions with higher TME tended to be regions with higher than median incomes. These findings are interesting and lead us to wonder if we are really allocating our resources efficiently, and if some areas may be overusing resources while others need these resources but do not have access.
Stacey Eccleston reviewed findings of primary care access and supply, showing that strong primary care leads to better health outcomes, reduction in costs, and improved access. However, in Massachusetts, especially in the Boston area, we have under 32% of our physicians in primary care, and only half of physicians accept new patients. There are significant barriers to access for many patients when they attempt to get primary care, and the panel discussion following focused on how better to utilize our existing resources to serve more patients.
Cathy Schoen of the Commonwealth Fund was the expert witness to discuss the topic of thinking creatively about the health care system of the 21st century. She veered away from the traditional way we look at resource planning, and opened up discussion for innovative ways of utilizing our resources and expanding the ways in which physicians work with patients and other health care providers. She believes teams of health care providers will play a large role in better serving patients in the future, and cited examples in the US and internationally where PCPs and specialty physicians have successfully worked together to coordinate patients’ care and cut costs of unneeded procedures. In addition, she pointed to the crucial role of electronic medical records and health IT to facilitate conversations between health care providers and between health care providers and their patients. Data that can be accessed on the spot, she believes, will avoid many medical errors and also keep providers up to date on a patient.
Schoen talked about some instances where doctors and there patients avoid meeting in person and communicate via email to solve problems or check in. In many cases, a patient just wants to know if it is necessary to make an appointment to see a doctor, and many practices have found that communication out of the office reduces the need for timely office visits and frees up a physician’s time. After hours care and care via email or telephone, if appropriately reimbursed through global payment systems or bundled payments, will reduce unnecessary emergency department visits or readmissions to hospitals and facilitate better relationships between physicians and patients. Schoen claimed that the US is at an advantage, of some sort, because we are so late in the game in our investments in health IT and coordinated care, which allows us to learn from other countries’ mistakes and their solutions.
The panel discussion involved John Auerbach, DPH Commissioner, Allison Bayer, COO of Cambridge Health Alliance, James Hunt, CEO of the Massachusetts League of Community Health Centers, Julie Pinkham, Executive Director of Massachusetts Nurses Association, and Veronica Turner, Executive VP of 1199SEIU. Many of the panel members talked about the successes some models have had in Massachusetts with bundled payments and electronic medical records. Pinkam talked about her worries of cutting nursing jobs and creating a huge nursing shortage when we are in a time of dire need for advanced practice nurses who provide quality care at lower costs. Panel members also discussed the possibility of some health care providers seeing less demand in the future with payment reform, but also the importance of dealing with workforce issues on a case by case basis and not jumping the gun by closing down low volume high specialty care centers or other providers that stop seeing as many patients. The future of the workforce will be interesting, but both Schoen and the panel members agreed that flexibility will be important going forward, as well as significant investments in infrastructure for health IT, public health planning and investments, and enhanced portals for communication across providers and between patients and providers. Payment reform plus a greater emphasis on teams of health care providers coordinating a patient’s care will produce a system that delivers better quality, lower cost care.
Onward to the final day. Follow us at #healthwonkbootcamp as we tweet.
-Amelia Russo
