Thursday, October 06, 2011

As predicted

Big deal.

Here's what I predicted last April, with regard to the negotiation between the state's largest insurer and the state's largest provider group:

Look for the following "victory" announcement in the coming months:

The parties agree to experiment with bundled payments for certain diseases and procedures, staying far away, though, from a full system of capitation. The parties agree to a general rate increase of just a few percent. Together, they will say, this will "bend the cost curve" for this large group of doctors and hospitals. There won't be much talk about the fact that the base upon which the bundled payments and other fee-for-service payments is set remains far above market.

End result: Continued use of market power as the prime determinant in setting reimbursement rates.

So, here it is, as reported by Robert Weisman in the Boston Globe.  Excerpts:

A new pact between the state’s largest health insurer and its biggest hospital and doctors network could boost efforts to contain health care costs, both sides said yesterday.

Under the deal, annual rate increases that were projected at 5 to 6 percent for the next three years will be lowered to between 2 and 3 percent. 

The new contract won’t end payment disparities between top-paid providers and struggling community hospitals, which also are being asked to accept smaller pay increases.

Under the agreement, Partners agreed to participate in Blue Cross’s alternative quality contract, a so-called global payment that gives health care providers a budget for patient care and incentives for healthy outcomes rather than billing for each visit and procedure.

Th[at] new contract . . . covers only about 25 percent of the Partners patients insured by HMO Blue.

Big deal.


Anonymous said...

Well Paul, at least this time no one can claim you are criticizing Partners to gain a competitive business advantage. Maybe they will now pay attention to the content of your message.

Barry Carol said...

While the lower percentage rate increases are a start and better than nothing, I still think the regulators need to push both providers and insurers toward full disclosure of contract rates while employers should make it clear to payers that they are prepared to embrace tiered networks to help steer employees and their families toward the most cost-effective providers.

Susannah said...

And on top of it all, the last two lines of the article: "Partners last year made a commitment to contribute $40 million to help reduce health care premiums for small employers and individuals. But by reopening its contract with Blue Cross and accepting lower payments than the contract with the insurer originally called for, Gottlieb said the commitment was fulfilled."

So let me get this straight - by accepting an $80 million dollar smaller increase than originally contracted, Partners has contributed $40 million toward premium reduction. I guess I missed the part where half of Blue Cross's savings are going to reduce the HMO Blue premiums.

Dr. Teri Bunker, DNP, FNP said...

As primary care providers on the bottom rung we should all be looking at ways to fix the broken primary care system. The only model that is going to work is prepaid (direct) primary care.
primary care can be provided very inexpensively--like for as little as $35 per member per month. Its all about numbers. Look at what is going on out west
I am fed up with insurance companies, managed care organizations and the likes of them all. We spend 40% of the healthcare dollar on administrative BS and get to spend 8 minutes with our patients.

lets put insurance back where it belongs--a coverage for catastrophic events--like all other insurance. You auto insurance doesn't pay to change the oil in your car, but if you don't change it your car wont last very long.

the public believes they have no health care if they have no health insurance. The two are not synonymous

Anonymous said...

Accountable care contracts are not the product they are hyped to be. ACOs are a way to impose some minimum baseline of quality on independent physicians (notably, only primary care) within a system to avoid the surprise of advanced expensive treatment for a patient who cannot afford it. READ: HMO. So now primary care doctors are incentivized to give the care they should have been giving all along, but the patient will still be referred to same hospital for any condition found, independent of quality of specialty care - e.g. CLIs, VAPs, surgical site infection rates. If screening leads to diagnosis, there are no added protections from being dropped by the insurer.

If there was an adequate, or even existing, system of quality control for practicing clinicians, would ACOs even exist? Instead, the contract might go the other way, with hospital systems competing on quality metrics to attract the best insurance rates - and customers. Quality would be transparently assessed by the scope and rigor of harm review and the ambition of quality improvement, rather than by popularity contest.

But then, who needs JCAHO when you have a good PR department and payor working for you?

e-Patient Dave said...

1. I wonder if the Globe's editors are aware of your blogging. To me it's news that you predicted it and it came true!

2. I wonder if any of the people involved realize that they're pricing more and more people out of the market. See the Kaiser Family Foundation chart at, which is BEFORE the recent announcements of additional price hikes.

3. Any recommendations?