In a front page story in the New York Times this week, reporter Kevin Sack suggested that the Commonwealth is facing “a day of reckoning.” We must confront our health cost problem, the article suggested, with the same vision and leadership that led us to embrace the challenge of coverage reform three years ago.
As contributors to this blog have written, there is little debate that the cost problem is urgent and threatens the sustainability of our pioneering coverage law. And most experts point to the same root causes of our rising spending: the growing incidence of chronic disease, the rapid introduction and spread of new medical technology, and the explicit incentives and expectations in our system that more care equates to better care – which can lead to unnecessary and even harmful treatment.
Conventional wisdom suggests that the consensus then breaks down: we might agree on the sources of the cost problem, but we will never agree on solutions. Some argue that it just too complicated and that competing interest groups are unwilling to compromise. We forget however, that this same skepticism plagued our early debate on coverage. We couldn’t agree on how best to finance expansion. We were unsure how to balance employer and individual responsibility. We questioned the proper role of government in a private insurance market and health delivery system. Yet we found common ground and created what the New York Times article called “perhaps the boldest health care experiment in American history.”
And there are early signs of a consensus emerging again. I serve on the state’s Special Commission on the Health Care Payment System which is charged with developing new payment models to address the rising cost of health care in the state. At its first meeting, the group developed a set of guiding principles. I expected that arriving at a consensus would be difficult, but we reached agreement fairly quickly – that we must fundamentally change the current fee-for-service reimbursement system.
At Blue Cross Blue Shield of Massachusetts, we believe that paying for quality and patient outcomes is the best way to move forward. To accomplish this, we are offering physicians and hospitals a new approach to payment – the Alternative Quality Contract (AQC). The AQC is a new model that combines a global payment with performance-based incentives to reward physicians based on nationally accepted measures of quality, effectiveness, and patient experience. In fact, my colleagues from Blue Cross Blue Shield of Massachusetts, Patrick Gilligan and Dana Safran, presented the framework of the Alternative Quality Contract (AQC) last week to the Health Care Payment Commission.
The momentum for participation in the AQC is growing quickly. Several physician groups have signed the AQC over the past three months, and health leaders who have been skeptical in the past are now asking to participate. Last week, I received a call from a CEO of a Massachusetts hospital who had expressed skepticism of the AQC last year. When we spoke, he told me he now sees the value of the AQC – in part because it is the only comprehensive alternative in the state to the fee-for-service system of today.
He and other leaders tell me they see both public and private payers moving toward some form of bundled payment– and those provider organizations that participate early and learn from it today will be in a better position tomorrow.
One thing is certain, as Kevin Sack’s article notes, if we’re able to solve the cost problem, “…health policy experts argue that it would be as audacious an achievement as universal coverage.”
It’s time for us to be audacious again – this time in addressing the way we pay for care.
Andrew Dreyfus is Executive Vice President for Health Care Services at Blue Cross Blue Shield of Massachusetts and former President of the Blue Cross Blue Shield of Massachusetts Foundation
Andrew, it’s time to stop the charade about “perhaps the boldest health care experiment in American history.” and the “skepticism [that] plagued our early debate on coverage. We couldn’t agree on how best to finance expansion.”
Enter the truth-squad. Effective payment reform must follow the same principles as access and coverage reform and this would mean NOT following the path of the Massachusetts insurance law. It means following the principle of putting patients before profits.
The Massachusetts mandatory insurance law is largely a give-a-way to the private insurance industry. Chapter 58 of the Acts of 2006 is a law that was rammed through by special interests and state legislators afraid of losing Federal Medicaid waiver money.
The law that was largely written by Blue Cross and Blue Shield of MA (with help from the Urban Institute who was paid handsomely by MA BCBS) and the Heritage Foundation (Repub Gov. Romney thanked Heritage publicly in his press release after signing the lawin April 2006).
One of the biggest failings of the MA health insurance law (and, believe me, there are many failings) is that it did not include creating a public insurance choice and it did not include a shred of cost control measures. Obama has pledged to include these components in his reform and we must hold him to it. Instead, The MA Plan handed over the pocketbooks of individuals, businesses, and taxpayers to the private insurance industry.
So, reader beware (and taxpayer beware), when Mr. Dreyfus, a highly paid Executive of the “non-profit” public charity Blue Cross and Blue Shield Massachusetts, takes the stage.
“Barrett Jarrios” – who are you really? Why are you using a very thinly veiled version of the name “Jarrett Barrios,” President of the BCBSMA Foundation, BCBSMA’s charitable policy organization?
I know WBUR screens comments for inappropriate content. WBUR should not have posted this comment under that name.
Regarding the content of your comments, yes, of course, as the largest insurer in Massachusetts, BCBSMA has a lot to gain from payment reform and cost containment. But the businesses, consumers and taxpayers who pay health insurance premiums stand to gain a lot more.
Ms London seems to have missed the main points of the above commentor whom I agree with wholeheartedly and whose points are these:
The Massachusetts mandatory insurance law is largely a give-a-way to the private insurance industry. Chapter 58 of the Acts of 2006 is a law that was rammed through by special interests and state legislators afraid of losing Federal Medicaid waiver money.
and this
The MA Plan handed over the pocketbooks of individuals, businesses, and taxpayers to the private insurance industry.
Ms. London,
Regarding your comment abouve: But the businesses, consumers and taxpayers who pay health insurance premiums stand to gain a lot more.
Actually, the many small-to-medium-size businesses – 56 percent according to a June 2008 report – are being harmed by this law. In fact, I have several friends who own small businesses who are constrained by this law in many ways – none of them good.
I also know many, many individuals who could not afford the “affordable” Commonwealth Choice or Commonwealth Care plans – or, for that matter, to meet the MCC. The flat enrollment in Plan Types 2b and 3 since last January attests to affordability issue with Commonwealth Care. Others cannot afford the copays which translates to not having access to care, not to mention those who must keep their income low in order to stay in a plan or be eligible for a subsidized premium. There are many who are non compliant with the law due to the estate recovery as well as the discrimination in the determination of eligibility and affordability regarding these plans.
There are also residents who want to see the doctors they had prior to Ch. 58 and must pay out-of-pocket to do this b/c their docs aren’t in the network OR won’t take Commonwealth Care patients due to the low reimbursement rates. In some areas, there aren’t any doctors who will take Commonwealth Care members or the only choice is a community health care center which must become the “medical home,” and is really not where that person wants to be treated. Therefore, in order to pay to see their choice of doctor, it’s not possible to also have the cash for an unaffordable monthly premium that buys them no-choice.
Fifty-one percent of the uninsured are being harmed by this law. Those who purchased the insurance by force or with the belief that they would benefit are also being harmed. The costs for residents were too high in 2007; these were substantially increased in 2008, and quite frankly, an average reduction in 2009 of $2.44 for some but not all Commonwealth Care plans is a joke – especially in this economy – it doesn’t even make up for the 2008 increase that was too much. And, of note, the Commonwealth Choice plans will increase. No mention yet of copays for Commonwealth Care.
All of this not only oppressive, it is a violation of human rights. Living in MA for the past three years has been a stress-filled nightmare. I wake up every day wondering what country to move to if the MA model is going to be the health care fix for America.
Congress handed seniors to Big Pharma with Medicare Part D. Now they want to sell us all to the highest bidder as MA has done with the continued blessing of Deval Patrick who knows full well that this model is not only harming far too many residents and businesses, it is also unsustainable and has hurt the state’s economy. This is nothing to be proud of.
Those whose bread is buttered by BCBS, Fallon, Harvard Pilgrim et al – you know who you are – should remove yourselves from anything to do with health care reform. Someone should explain the term Conflict of Interest to you. The same holds true for Sen. Max Baucus, Sen. Ted Kennedy et al on a national level.
I would be grateful if Andrew could give projections on the cost savings of the AQC.
Check out the article in the February issue of Healthcare Ledger. Nice gift-wrapping job, BCBSMA, with a bow on top – bonuses to providers. http://www.healthcareledger.com
The last paragraph tells all although the entire article is quite the snow job. . . . “If the only thing the new [AQC] contract does is to shift the risk from the insurer, whose very purpose is to manage risk, to the providers, whose primary purpose is to provide care, then nobody is served very well, but if the system is set up so that the insurer is repsonsible for the management of risk and is working with the provider and patients to make sure the system is working as it should and developing the supportive system . . .”
Sounds like another win-win for the insurer, a lose-lose for the patients, and puts the docs between a rock and a hard place. The kicker is the insurer working with the provider and patients to make sure the system is working as it should . . .
The insurer will be sure to make sure the system is working as it should – for the insurer.
Nothing like adding more bureaucracy and confusing crud when we could expand Medicare to all, thus providing EQUITABLE, quality, affordable, guaranteed CARE. We
would have a choice of doctors and hospitals to boot. And it would be a fiscally responsible way to solve the health care crisis in America. Seniors love it.
The Mandated Mistake that is Massachusetts.
The MA. mandated insurance is an absolute abomination-period. See http://www.hr676.org/index.html to learn how America could do much better than the MA. mandate. Did you know the architects of the Massachusetts mandated healthcare and similar plans have done studies showing that government provided insurance would be far more equitable and efficient, yet in every case have opted for MA. style mandates citing “political feasibility”? It’s a polite way of saying the insurance companies own our politicians-completely. Did you know the far right think tank, The Heritage Foundation, was invited into Romneys office to devise our mandated healthcare plan for this, the most Democratic of the states? Or that the Ma. mandate plan, all 80 pages of it, landed on legislators desks the day before they were to vote on it? Now big insurance hopes to do to the nation what they’ve done to MA. residents. If successful, it will be the single greatest redistribution of citizenry cash into private industry pockets ever, and to assure sycophantic Senatorial complicity we have this : http://news.yahoo.com/s/ap/20090324/ap_on_he_me/insurers_sick_people
Supporters of the MA. mandate here and elsewhere are part of a well financed spin machine and do a great job. It’s all rather obvious- this machine will sell the American public out to the highest bidder while hiding behind shameful “coverage for all” antics. The irony is they are all Luddites advocating an anti-American anti-progress agenda on behalf of their big money insurance masters. I’m a Massachusetts resident living under the MANDATED healthcare that our “elected” health insurance foot soldiers in Boston rolled out across us all. Now Washington hopes to do the same to all of America. In MA. a healthy 49 y.o. couple with $42,500 GROSS, not net, redistributes around $7000 yearly to insurance companies profit lines with 20% co-pays, $2000 deductible and a policy full of holes. There is no middle ground when you so blandly go about destroying the financial future of those you purport to protect.
I do not want something for nothing-we bought our own coverage for years-but what has been foisted upon MA. residents here is extortion and on the grandest of scales. I know what coverage both cost and covered when purchased with the negligible bargaining powers of an individual. When you consider MA. Mandated insurance was negotiated thru collective bargaining as coverage for millions it can ONLY be viewed as an absolute disgrace in depth and cost. Look around the globe and you’ll see comparatively what a disaster our healthcare system is, that our own leaders would toss us into this abyss as they have in MA. is unconscionable. Mandated insurance is a scam and you are part of the heist.
[...] this artificial structure is gone. We are hearing from the physicians and hospitals in our new Alternative Quality Contract that the global payment has liberated them from the fee schedule and all its unintended [...]