THCB

“Trust Us” Just Doesn’t Cut It

I apologize in advance if some of you are tired of hearing about Massachusetts and its experience with different payment models for health insurance. I write about this, not only because it is interesting locally, but also because people around the US are watching to see how the experiments here might or might not be applicable to the rest of the country.

I have written before about the pro’s and con’s of capitated, or global, payments as an alternative to fee-for-service payments. There are arguments to be made in support of each. But the problem in this state is that the movement towards global payments has become a matter of religious dogma. The main practitioners of the system have not been willing to divulge the kind of information needed to evaluate it properly. That lack of transparency undermines the policy arguments that might be used to advocate for an expansion of this approach.

But, eventually, more and more of the story comes out, and it is less than pretty. A few weeks ago, I quoted a report by the state’s Inspector General in which he raises concerns about this issue. He noted, “[M]oving to an ACO global payment system, if not done properly, also has the potential to inflate health care costs dramatically.”

Now comes an article by Pippin Ross in Commonwealth Magazine, entitled “Piloting Global Payments.” It has some revelations that give credence to the concerns raised by the IG.

Ross quotes a Blue Cross Blue Shield official as saying:

Blue Cross padded first-year global payment budgets to entice hospitals and doctors to sign on…. [T]he current goal is not to actually reduce costs, but to cut in half the rate of growth in medical costs after five years.

[T]he outcomes after one year under global payment are where Blue Cross expected to be in three or four years. “The amount of money being spent hasn’t changed yet, but the outcomes are serious testimony to the fact that more—in tests and doctors and visits—isn’t always better,” she says. “We’re getting a lot more for our money than we expected.”

But, of course, we don’t really know, do we? We have no way to validate any of this. Sorry, but “trust us” just doesn’t cut it when it comes to this kind of significant change.

As I have noted, there are corporate reasons for pursuing this strategy:

Some insurance companies are particularly pleased with this approach because it shifts risk from insurers to providers and makes it easier for the insurers to create budgets and price their products.

What does it take to get those involved to publish their data? As I have stated before:

I know of no other arena in public policy in which so many decisions are being made with so little substantive support and so little data-driven debate.

Paul Levy is the former President and CEO of Beth Israel Deconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvement at Not Running a Hospital.

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nate ogden Recent comment authors
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nate ogden

” it shifts risk from insurers to providers and makes it easier for the insurers to create budgets and price their products.”

They loved it in CA when the PHOs and IPos etc took all the risk and they just collected admin fees. Healthy margins and no risk, it was nirvona. We all know how it ended and I don’t see anything being done different this time that would change the results but the advocates are hopeful.