Thursday, April 12, 2012

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.


Vanessa said...

From Facebook:

I think the instatement of medical homes will greatly contribute to the solvency of healthcare in the U.S. We have seen the work of the 'hot spotters' and it has worked. Since 'vulnerable populations' use the bulk of healthcare expenditures, the work of medical homes/ACA will greatly improve the care of those with chronic conditions requiring better coordination of care. What do you think of "One Stop Shopping" for healthcare?

Anonymous said...

Thanks for a thought-provoking post with many good points. Taking off from your last paragraph, however, it is clear to me that politicians and officials at all levels (state and federal) have done a very poor job educating the public on this complex subject of paying for health care, so the partisan ideologues rule the discussion. Every week at my volunteer job I listen to a liberal friend and a conservative friend argue this very subject, both massively misinformed in predictable ways. Who can distill this complex problem into an articulate public message which can be used to spark thoughtful discussion, rather than a partisan rant for one's cherished solution? Maybe your esteemed state should lead the way, absent any leadership elsewhere.

nonlocal MD

Barry Carol said...

One would think that state regulators could bring about real time healthcare price and quality transparency in a user friendly format if they had the will to stand up to the hospital, doctor and insurance lobbies. At the very least, they could try it out in selected markets like the Boston metro area or mandate it for the 25 or 50 most common procedures statewide. While I know that insurers think there is a risk that disclosure of actual contract reimbursement rates could result in increased prices, I think it’s worth a try at least on a pilot basis.