payment reform

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May 17, 2012 | 8:47 PM | By

Breaking: Mass. Senate Passes Historic Health Care Cost-Cutting Bill

5/18 Update: WBUR’s Martha Bebinger has a feature report on the bill’s passage.

Original post: Here’s the full, unedited press release:

Senate Approves First-In-Nation Payment Reform Bill

BOSTON – Crunching through 265 amendments during two full days of public debate, the Senate on Thursday capped a framework of nation-leading health care reforms with landmark cost-control legislation that will save the Commonwealth $150 billion in the next 15 years while improving the quality of care and increasing the transparency and accountability of the state’s entire health care system. The bill passed 35-2.

Health spending is projected to double from 2009 to 2020, outpacing both inflation and growth in the overall economy. Massachusetts residents, businesses, and state and local government continue to struggle with increasing premiums and other health care cost sharing.

“The most important goal of this legislation is to reduce the cost of health care while providing access and quality outcomes,” Senate President Therese Murray (D-Plymouth) said. “Massachusetts spends 15 percent more per person on health care than the rest of the nation and 40 percent of our state budget is spent on health care. This bill will reel in health care costs, without harming our number one industry or patient care, and remove a major roadblock to long-term job growth and essential investments in education and transportation.”

“The Senate today took bold action to address one of the most serious threats to our economic recovery and strength, and did so in a thoughtful and deliberate manner,” said Sen. Richard T. Moore (D-Uxbridge), lead sponsor of the bill. “This proposal will result in billions of dollars in savings for consumers and small businesses across the Commonwealth, and it will ensure that patients receive the highest quality of care which they expect and deserve. The Senate recognizes the importance of our innovation economy, and sought to pursue reforms in a collaborative manner with those stakeholders responsible for implementation. This legislation completely alters the landscape of our deliver system, and does so with a desire to seek the greatest value at the most reasonable cost for the residents of the Commonwealth.” Continue reading →

FILED UNDER: Insurance, Medicine/Science, Money, Politics, health care cost bill, health reform 2012, payment reform, reform 2012
May 1, 2012 | 8:21 AM | By

Nation Eyes Bay State As Cost-Cutting Health Reform Plan Emerges

(jimmywayne/flickr)

Here’s more evidence that as Massachusetts goes, so goes the nation. The Washington Post reports on details of the soon-to-be-released, highly anticipated Health Reform 2.0 bill, aka, the cost-control plan. Put succinctly by Brian Rosman, of Health Care For All:

“There’s a bit of Bay State pride tied up in this,” said Brian Rosman, research director for the Boston-based advocacy group Health Care for All. “We were the first to figure out universal coverage. Now we want to be the first to crack health-care costs.”

The Post report touches on various aspect of the wide-ranging cost-cutting plan, expected to be out later this month:

The payment-reform law that Massachusetts will soon debate could create new incentives for doctors, hospitals and providers to participate in a payment system that looks a lot like the Alternative Quality Contract.

In February 2011, Gov. Deval L. Patrick (D) introduced legislation that would have moved all Massachusetts health-care providers to value-based payments (arrangements like the Alternative Quality Contract) by June 2015. A new government entity, created by the bill, would facilitate that change, setting various benchmarks and timelines… Continue reading →

FILED UNDER: Insurance, Medicine/Science, Politics, cost, mass. health reform, payment reform
April 26, 2012 | 7:34 AM | By

Health Payment Reform Can Bring Big Savings For Employers, Report Finds

Projected impact of growth scenarios on total employer savings on employer-sponsored health insurance. From "Benefits of Slower Health Care Cost Growth for Massachusetts Employees and Employers" by Jonathan Gruber and Ian Perry. (Courtesy)

Projected impact of growth scenarios on total employer savings on employer-sponsored health insurance. From "Benefits of Slower Health Care Cost Growth for Massachusetts Employees and Employers" by Jonathan Gruber and Ian Perry. (Courtesy)

WBUR’s Martha Bebinger reports that under new health payment reform (read cost-containment) plans currently underway in the state legislature, employers could save between $8 and $35 billion over nine years, according to a new analysis by MIT economist Jonathan Gruber.

That translates into direct financial benefits for workers, writes Bebinger:

Gruber says there’s a direct trade off between health care costs and wages. When premiums go up, wages don’t rise as quickly.

“What we’re saying here, by that same logic, is if we can control health care costs workers get more,” Gruber said.

In what Gruber calls a modest proposal, health care costs would increase 5 percent per year, just one point less than the expected 6 percent increase. The savings for employers would be $8 billion over nine years.

Under a more aggressive approach, health care costs would still rise, but only 2 percent per year. Employers would save almost $35 billion or about $1,000 per worker, per year. Continue reading →

FILED UNDER: Insurance, Money, Politics, cost, hospitals, insurance, payment reform
April 17, 2012 | 10:50 AM | By

10 Ways That Mass. Payment Reform Could Go Wrong

I had my introduction all ready. As the moderator of a panel held by the Massachusetts Health Data Consortium last week, I was going to introduce Paul Levy (“Not Running A Hospital“) and Charlie Baker (not running for governor, at least not at the moment) as bringing in with them a “fresh gust of skepticism” about the direction of Massachusetts payment reform.

I figured the Charlie and Paul Show would offer a sharp contrast to the first speaker, Dr. Robert Galvin, the CEO of Equity Healthcare and a nationally known thinker on how to improve health care. The conference’s program said he would “explain why the time is now for payment reform,” so I assumed he was enthusiastic about the palpable Massachusetts political momentum toward global payments.

Nope. Or at least, it’s not so simple. His nuanced presentation struck me as by no means a blanket endorsement of global payments for everyone, everywhere. In fact, there was a decidedly Cassandra-like tone to it. He warned about the dangers of a “one size fits all” mentality, and of letting health care institutions get “too big to fail.”

And in a mental exercise that perhaps all decision-makers should adopt, he imagined a “future history” in which we pretend we’re in 2022, analyzing the failure of Massachusetts payment reform. (This is known as an FMEA for Failure Modes and Effects Analysis.) So, looking back ten years hence, what might have gone wrong? His list, but re-ordered to put first the items I found most interesting:

1. We under-anticipated the resources needed to effect the changes (He spoke from bitter experience with the number of meetings needed to make organizational changes in health care. And watch out, he said: “To bring doctors and hospitals together, pay them globally and expect a miracle to happen, I think is magical thinking.”)

2. We created organizations with too much pricing power.

3. We didn’t find a solution to the “who loses” challenge. “One person’s costs are another person’s revenues; you have to solve that.”

4. The changes cost more than they saved.

Continue reading →

FILED UNDER: Medicine/Science, Politics, payment reform
March 15, 2012 | 11:11 AM | By

Moderating Payment Reform: Mark Your Calendars For April 12

(Images_of_Money/flickr)

Don’t miss this: a conference on payment reform at the Logan Airport Hilton with an ex-gubernatorial candidate and an ex-hospital CEO. It promises to be a rip-roarin’ time!

I’m not kidding. The discussion will be moderated by my fabulous blogging partner, Carey Goldberg, who has an innate gift for transforming wonky content to delicious fun. So it should be a blast. (And there’s free parking.)

Here are details from The Massachusetts Health Data Consortium:

The Massachusetts Health Data Consortium’s Spring Workshop is less than a month away. This year, the theme is Payment Reform: Achieving the Three-Part Aim?.

The movement toward reforming the payment system is accelerating rapidly, and Massachusetts is a national leader in changing from a fee-for-service to a value-based payment model. The Centers for Medicare and Medicaid Services has challenged the healthcare system to achieve the three-part aim: better care for individuals, better health for populations, and reduced expenditures for CMS program beneficiaries. This conference will address why payment reform is needed, and explore how to change the payment system while improving quality, reducing costs, and ensuring adequate access to care.

Our keynote speaker, Dr. Robert Galvin of Blackstone Consulting, will discuss why we should transform the payment system. Following the keynote address, Charlie Baker of General Catalyst Partners and Paul Levy, formerly of Beth Israel Deaconess Medical Center, will discuss if changing the payment system is what is needed. Their conversation will be moderated by Carey Goldberg of WBUR’s CommonHealth. In addition, we will have panel discussions on why cost control is critical and how to maintain quality and access in a new payment system.

You can view the agenda here. The event is on April 12, from 8:30-3:30 at the Hilton Boston Logan Airport.

FILED UNDER: Insurance, payment reform
December 14, 2011 | 7:27 AM | By

Guest Post: Why American Medicine Needs A Moneyball Moment

By John Miner and Brad Stulberg
Students in the Masters in Health Services Administration program at the University of Michigan

John Miner

Brad Stulberg

With baseball season over and “Moneyball” exiting the box-office, we cannot help but wonder: When will American medicine have its Moneyball moment? The story of the Oakland A’s and their “do more with less” approach to baseball can serve as a model for American health care: Health care should start measuring and paying for value instead of simply paying for quantity.

Moneyball tells the fascinating story of how the Oakland A’s management team drastically departed from conventional wisdom in building a top baseball team. Rather than continue in the ways of an inefficient baseball marketplace — where value was neither appropriately measured nor paid for — the A’s developed a system that prioritized data-driven insights along with human judgment to construct their lineup.

While teams like the New York Yankees paid tens of millions for star players that “looked great” or had “beautiful swings,” the Oakland A’s fashioned a method to figure out what player attributes really drove outcomes (in this case, winning baseball games) and then paid players based on those attributes: value-based purchasing, if you will.

When compared to other developed countries, America is like the Yankees in terms of payroll — only without the 27 championships.

The A’s philosophy was in stark contrast to prevailing baseball culture. The franchise’s unconventional success rested upon a restricted budget (A’s ownership capped management spending at a hard amount), transformational leadership, and a change in mindsets and behaviors across the A’s clubhouse. The end result? Oakland, with a payroll two to three times smaller than top contenders, was able to compete with traditional powerhouses.

The analogy to health care is striking. Too often, health care dollars are disconnected from value; decisions are made based on precedent, anecdote, and preference rather than evidence; and new statistics and evidence-based measures are confronted with overwhelming disdain. (In fact, Billy Beane of the A’s has himself written about this parallel, in an op-ed piece with Newt Gingrich and John Kerry.) Continue reading →

FILED UNDER: Medicine/Science, Money, Politics, bundled payments, comparative effectiveness, payment reform, reform 2011
October 21, 2011 | 11:36 AM | By

How Payment Reform Can Be Like Dieting In a Locked Room

I love this analogy. Actually, I love any analogy that can add juiciness to the eye-glazing dryness of health policy, but this one in particular, because the image of locking yourself in a room to avoid food temptation (or health-spending temptation) is so vivid.

Here’s the actual quote, from Dr. Timothy Ferris of Massachusetts General Hospital, a big experimenter on alternative models of care and payment. He’s speaking at the Center for Connected Health symposium now under way in Boston. At about one minute in to the above video, as he talks about how shifting health care payment to global budgets and Accountable Care Organizations is doable but hard, he says that “Maybe we should be trying harder.”

“If you go on a diet, there’s a whole different strategy of going on a diet between saying ‘I’m not going to eat more’ and locking yourself in a room with only a limited amount of food. That’s a fundamentally different way to diet, right? I think there’s a role for locking ourselves in rooms that we carefully think about and plan on, and saying, ‘We’re going to live on what’s in this room for the next three years,’ and use that as a mechanism.”

Wonkish readers, please take this analogy and run with it! My own initial thought is that as the rooms start getting locked, it’s a concern that some of them hold far better-stocked cupboards than others. I’d hate to live for three years on Ramen alone.

Watch the video a bit further to see the response from Dr. Jeff Goldsmith, a prominent skeptic of the ACO model.

FILED UNDER: Money, connected health, costs of care, payment reform, reform 2011
September 6, 2011 | 1:20 PM | By

New Chief At Beth Israel Deaconess: Global Payments No Panacea

New Beth Israel Deaconess chief Dr. Kevin Tabb

Dr. Kevin Tabb, chief medical officer of Stanford Hospital in California, will be the new president of Beth Israel Deaconess Medical Center, the hospital has just announced. WBUR’s Sacha Pfeiffer interviews the new chief on All Things Considered today, and here’s a brief excerpt on one of our favorite topics, the Massachusetts push toward health care payment reform.

[How do you see global payments as an approach for controlling the rise in health care costs?]

I think about Massachusetts as being five years ahead of the rest of the country. I think the things that are already happening here will happen elsewhere, they just haven’t happened yet. Specifically about global payments, that is one way to attack the issue of rising health care costs, although I don’t think it’s the only way. I think all of us are going to need to become more effective and global payments is one way of getting there, but it’s not going to be the panacea, to tell you the truth.

[Would you support it as one of the ways of getting there?]

I would, with the caveat that especially academic medical centers have a unique place in the health care environment, they serve unique populations, and we’re going to need to take that into account as we figure out how we’re going to change.

[How would you take that into account?]

Like all academic medical centers, we take care of very sick, very complex patients — and very sick, very complex patients don’t always lend themselves to simplistic plans. So I think we just need to make sure we take that into account as we look at global payments. That being said, as we look at global payments, all of us in academic medical centers are going to have to make some changes in how we think about health care. Specifically, that means we’ll have to think about taking care of patients across the continuum of care, and that means not just here in the hospital when they’re really sick.

From the Beth Israel Deaconess press release on Kevin Tabb’s appointment:

As the CMO at Stanford, Tabb had broad strategic and operational responsibilities, which included physician network strategy; clinical quality and patient safety initiatives; regulatory and medical staff affairs; and graduate and continuing medical education. He was previously chief quality and medical information officer at Stanford, where he oversaw primary care, outreach clinics and the Stanford Cancer Center. Prior to joining Stanford, Tabb led the Clinical Data Services division of GE Healthcare IT.

Tabb, who is 47, received his MD from Hebrew University-Hadassah Medical School in Jerusalem, Israel, as well as his undergraduate degree from Hebrew University. He completed his residency in internal medicine at Hadassah Hospital. Raised in Berkeley, CA, Tabb emigrated to Israel at the age of 18 and served in the Israel Defense Forces, the country’s military service.

FILED UNDER: Medicine/Science, Politics, Beth Israel Deaconess Medical Center, payment reform
July 1, 2011 | 11:06 AM | By

Summing Up The Cost Trend Hearings

Acting Commissioner Seena Perumal Carrington (photo: Division of Health Care Finance and Policy)

We asked Seena Perumal Carrington, acting commissioner of the Division of Health Care Finance and Policy, to sum up this week’s cost trend hearings which concluded yesterday with no clear-cut solution (no one expected that in a week) but some consensus in key areas (like government intervention to deal with price disparities). Here, slightly condensed, is what Carrington sent over:

The state’s annual cost trends hearings are to discuss various perspectives on the drivers behind escalating health care costs, and to determine what can be done to mitigate cost growth through public policy and industry actions.

The 2011 hearings were intended to examine progress made to-date by existing public and private efforts and unearth actionable solutions within the framework of four topical categories:

–Variation of provider prices
–Alternate payment methodologies
–Health resource planning
–Integration and care coordination

Additionally, the 2011 hearings concluded with a discussion of the roles of government and the private market in reducing health care costs.

In the first panel, there was near universal agreement that the extent of price variation reflects an unhealthy imbalance in the health care marketplace that merits immediate government intervention. This conversation (especially around the specific type of intervention needed) will continue in the recently convened Special Commission on Provider Price Reform. Continue reading →

FILED UNDER: Insurance, Money, cost hearings, payment reform
June 27, 2011 | 1:16 PM | By

Patrick At Health Cost Trend Hearing: 7 Points, New Subtleties

Rachel Zimmerman reports:

Gov. Deval Patrick, speaking today at the 2011 Massachusetts Health Care Cost Trends Public Hearing, pretty much stuck to his theme that the second phase of health reform is coming, like it or not, and without effective solutions for containing medical costs, no economic recovery will stick.

There were a few new subtleties in Patrick’s testimony, however. First, he didn’t mention the term “global payment” in his remarks. (He told reporters later that accountable care organizations and global payments were basically interchangeable concepts, so his not mentioning global payments was not significant.) Still, his non-mention comes less than a week after Attorney General Martha Coakley issued a report saying that so far, global payment agreements have not brought costs down and are not likely to do so any time soon.

Also, Patrick said that he wants to highlight the fact that the insurance commissioner should have “explicit” authority to deny premium increases if they are based on inequitable reimbursement rates to providers. He also reiterated that he wants a bill passed this fall.

Here, edited and condensed, are seven points the governor made:

1.The cost of health care is going up at an unsustainable rate. Fixing it is “an urgent challenge… failing to do so will threaten our economic recovery.”

2. We’ve already made progress: 99.8 percent of children in Massachusetts are insured and 98 percent of adults now have health insurance following the 2006 reform law. Patrick said that more private companies are offering insurance, and insurance can’t be pulled when a person gets sick. “It’s affordable,” he said. And “it stands as a value statement: health is a public good, everyone deserves access.”

3. There’s an emerging consensus on solutions on how to contain costs. “Whole-person care” works, and moving away from fragmented, fee-for-service care is imminent. Continue reading →

FILED UNDER: Insurance, Medicine/Science, cost trends, costs of care, deval patrick, global payment, payment reform