Tuesday, April 12, 2011

"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.


Anonymous said...

Public policy is commonly written by industry. Our public education and environment investments well reflect that reality. It is time that medicine concedes that industry drives care, not providers or policy wonks.

It is astounding that no one is asking for the values and calculations that determine what care they will get. Does the public understand that they just entered a roulette similar to buying an airline ticket? The person sitting next to you has the same seat, same view, same uncomfortable cramped knees. But you pay four-fold, and no one on the other end of the phone can tell you why. Was it that glucose result you had after a milkshake? Your father with cardiovascular disease? Your zipcode? How about a Freedom of Information Act for patients?

Brad F said...

Some of what you stated was not a secret.


Paul Levy said...

Brad, that article does not talk about padding the early adopters' contracts. It talks about the quality bonuses they earned.

Brad F said...

I was careful to use the word "some." If i recall though, they did explain the baseline they were working off of, and the generous assumptions at time zero to get buy in and kick start initiative.

Of course, I am not taking away the crux of your message.

SurgiBlogger said...

Paul, here's a simple question for you. What does the "right" reimbursement structure/model for hospitals look like, with or without being part of an ACO? How would you build the recognition of quality in? And how would you verify that it is the right model?

Anonymous said...

"padded the budget the first year" sounds suspiciously like "no one would have known the cost was way up, but the attorney general is now doing annual cost reports so last year's large increases will be public as soon as the they report it to the health care committee. i know, we'll say we padded the budgets to get the providers to sign up. yeah, that's the ticket." so...bcbs says they'll stick it to the aqc's after this first year? so increases will then be limited? mmm, ok.