Payment discussion at MHDC

I was honored to join Charlie Baker, former CEO of Harvard Pilgrim Health Care, and Carey Goldberg, of WBUR's Commonhealth, for a discussion at a seminar entitled "Payment Reform: Achieving the Three-Part Aim?" held by the MA Health Data Consortium.  We were preceded by an opening address from Dr. Robert Galvin of Blackstone Consulting.

Dr. Galvin provided an overview of issues surrounding payment reform, integrated health care delivery, and the like.  He set forth two possible scenarios for the various market areas.  One would be where integration would lead to improved outcomes and lower costs.  And the other would be where consolidation would lead to higher prices and unchanged outcomes.  He noted that the Federal Trade Commission does not have the resources and that the federal administration does not have the desire to intervene to prevent the latter scenario.

He wondered about the possibility of the "too big to fail" phenomenon occurring in health care, where because provider organizations become the economic engine of a given area, the normal forces of cost control do not take hold.

He set forth a warning, too, about two aspects of payment reform that could cause backlash.  The first related to those he termed the real losers -- providers who will ask, "Where did my income and autonomy go?'  The second was about perceived losers -- consumers/patients who will say, "No one told me I couldn't have everything."

Galvin suggests that the extent to which payment reform should be adopted and could be successful depends on using distinctly different approaches to different kinds of markets.  "We need to map payment archetypes to market archetypes," is the way he put it.

He concluded by suggesting that evolution, not revolution, would be the way things should and will move:  "Reorganizing the delivery system is unbelievably resource-intensive and fraught with unintended consequences."

Charlie and I then began our panel discussion, moderated by Carey. Regular readers of this blog will have a sense of my discussion about payment reform, its limitations and difficulties, and how it distracts us from other priorities for the health care system.  Charlie was sailing along a similar tack, to the point that Carey noted that our talks were more likely to result in a debate with the audience than between the two of us.

A few of Charlie's points bear repeating.  First, he noted that 90% of health care spending is concentrated in the care of 10% of the population.  Why, then, create an overburden of a payment change policy for the whole population?  Citing studies by the MA Attorney General, he reminded people that utilization is not driving up the cost of health care in the state.  "It's the unit cost."  Further, the Attorney General demonstrated that control of costs is not tied to particular payment methodologies.

Although we both discussed transparency, Charlie nailed the political point by saying, "You can't build will if no one knows what the current state of play is."  Absent real-time presentations of relative prices charged by providers and of quality metrics of those providers, there will not be public support for the kind of cost containment that could result from limited networks and other varieties of insurance products.