Each Patient Counts: Massachusetts Medical Society Weblog

President Obama and Tonsillectomies

President Obama stirred up more than a few doctors last week when he suggested that some doctors order procedures or tests because it’s more profitable for them.

Here’s the transcript of what he said, courtesy of the New York Times:

"Right now, doctors, a lot of times, are forced to make decisions based on the fee payment schedule that's out there. So if they're looking and -- and you come in and you've got a bad sore throat, or your child has a bad sore throat, or has repeated sore throats, the doctor may look at the reimbursement system and say to himself, 'You know what? I make a lot more money if I take this kid's tonsils out.'

"Now, that may be the right thing to do. But I'd rather have that doctor making those decisions just based on whether you really need your kid's tonsils out or whether it might make more sense just to change -- maybe they have allergies. Maybe they have something else that would make a difference."

Certainly, no one likes to be called a profiteer, so on that level alone, this comment didn’t sit well. But the numbers and the science don’t bear out the President’s argument. Medicare’s basic fee schedule pays a surgeon $241 for a pediatric tonsillectomy, and $233 for one performed on an adult. And, I don’t know any doctor who would recommend one based on a recurrent sore throat. The American Academy of Otolaryngology issued a detailed, eloquent defense of why tonsillectomies are often medically necessary, and can be less expensive than treatment without surgery.

This episode illustrates why comparative effectiveness research is so badly needed in this country today. Instead of determining medical necessity by anecdote (hypothetical or real; they’re equally dangerous) let’s get some solid research going, and learn authoritatively what helps patients. That will make our health care system better and more efficient by leaps and bounds.

Mario E. Motta, MD
President, Massachusetts Medical Society

AMA Ad Campaign Outlines Vision for Health Reform

The American Medical Association placed full-page ads in the New York Times, Wall Street Journal and the Chicago Tribune today, restating its principles for health system reform. The AMA says it wants health reform that:

• Protects the sacred relationship between patients and their physicians, without interference by insurance companies or the government
• Provides affordable health insurance for all through a choice of plans and eliminates denials for pre-existing conditions
• Promotes quality, prevention and wellness initiatives
• Repeals the Medicare physician payment system that harms seniors' access to care
• Eases the crushing weight of medical liability and insurance company bureaucracy

The ad will also be placed in the online version of several medical trade publications.

The MMS Perspective on Payment Reform

The state Payment Reform Commission voted last week to recommend that Massachusetts move from its largely fee-for-service payment system to a "global payments" model. What does the Massachusetts Medical Society think about this? 

• Preserving the status quo is not an option because, despite the miracles that happen every day, there are many things in health care that need remedies.
• Greater collaboration among doctors and the entire spectrum of the health care system is definitely the right way to go, because health care is more of a team sport than ever. It’s time for our payment system to reflect that reality and promote it. This is a strength of the global payment model. If implemented well, this will be better for our patients, and I believe that physicians will like it better, too. This is a direction worth exploring – cautiously, carefully and deliberately.
• We all have long memories. Physicians harbor well-earned skepticism about ambitious proposals to promote affordability and quality, because so many of them ended making matters worse. We all remember the disastrous experiment with capitation from the 1990s, when many physicians were left high and dry by a poorly conceived system, and many patients believed that they were denied the care they needed. We’re determined to see that those mistakes are not repeated.
• Physicians need lots of time to get ready for a new payment model. It’s hard to overstate how deeply a new payment model changes how practices and hospitals deliver care. The commission report puts the transition period at five years, but more time could be required. We’ll be there to advocate for that extra time, if it’s needed.
• Physicians will also need support – lots of it. They’ll need financial, legal and technical support, none of which comes cheaply or easily. This support is not an option; it is a necessity. Without it, we’ll lose more physicians, and patients’ access to care will be even further endangered.
• Forward motion must be done cautiously. The results must be monitored closely and continuously. Everyone involved must be willing to make adjustments quickly, but carefully.

The commission report says all the right things about these issues. The will to do the right thing is there today, but will we see the same commitment when the going gets tough? It’s our job is to ensure that it does, so these good intentions become a reality. We will not rest until physicians have the tools and support they need, so patients have access to the best health care we can possibly provide.

We'll continue to provide updates as this process continues.

As always, your comments and thoughts are welcome.

Mario E. Motta, MD
President, Massachusetts Medical Society

Payment Commission Final Meeting: Summary of Proceedings

Commission co-chairs Leslie Kirwan and Sarah Iselin opened the meeting noting the significance of what the commission was about to endorse. They briefly discussed the context of the commission's work, namely the unsustainable rise in health care costs. They also asserted, "the status quo is not an option." They were also the first to note that the vote was the first of many steps to payment reform.

Consultant Michael Bailit, whose firm did the bulk of the commission's research and fact-finding, spent the next 30 minutes outlining the work the commission did, and why it believed that global payments provide the best opportunity to moderate costs while also promoting high-quality care. Among his comments:

• The chief entity under which providers would organize to accept global payments, accountable care organizations (ACOs), could be wither "real" or "virtual." That is, they can have a formal corporate structure, or operate as more loosely governed entities. Bailit said the commission's definition of ACOs is "broader" and "more flexible" than described by Dartmouth's Eliot Fisher, who has popularized the concept.
• Advanced medical homes will be an important part of the new payment model, but by themselves are not sufficient to achieve the commission's cost-efficiency goals. Bailit said, however, that the success of ACOs is predicated on a robust and primary care infrastructure. He said primary care practices will have to redesign their operations, and should be compensated sufficiently to operate as medical homes.
• Good risk-adjustment is critical to the success of this model. Bailit said there will be two kinds of risk in this system: insurance risk, and performance risk. Insurance risk will be carried by the health plans, and will address issues outside the control of providers. Providers will be carrying performance risk, which covers areas of care over which they do have control, such as clinical results. He said this distinction between these types of risk is "essential" to the success of this model, and is one of main differences between global payments and capitation as it was practiced in the 1990s.
• "Global payments is no a symptom for capitation," he said. The key difference between global payments and capitation include: a careful and thoughtful transition period; robust monitoring of results; performance measures linked to patient-centered care; improved risk-adjustment tools; improved health IT tools. "There is much more data available to us today than even 10 years ago," he said.

After Bailit's presentation, each commission member was given about five minutes to comment. With apologies for the lack of completeness that follows, here is a summary of what they had to say.

Sen. Richard Moore, co-chair of the Legislature Committee on Health Care Financing: He would have preferred more detail in the report about the recommendations will be implemented. "This is just the beginning; there is much more to be done." He also wondered how this recommendation would be coordinated with any federal reform legislation. Later in comments to reporters, Moore said he hoped to start holding hearings on ways to implement the report later this year.

Rep. Harriet Stanley, co-chair of the Legislature Committee on Health Care Financing: She noted that this is the first step in the process, not the last.

Alice Coombs, MD, MMS President-Elect: Physicians want to be part of the effort to develop a better system. They will with other stakeholders to ensure that there is sufficient support for providers to succeed under global payments.

Lynn Nicholas, Mass. Hospital Association: She pointed out several "significant" issues that hospitals will be watching closely:

• Whether ACOs will in fact be responsible only for the risk that is under their control;
• Whether it's possible to give patients the right to move among ACOs and meet the goal of moderating costs;
• Administrative simplification, malpractice reform, end of life care, consumer alignment, primary care development, supporting teaching in hospitals, and others, must be addressed. they are "critical" to the success of the program, not just "complementary strategies" as expressed in the report.
• The significant initial cost of realignment practice structures "should not be underestimated."

Deborah Enos, representing the Mass. Association of Health Plans: There needs to be flexibility in the composition of ACOs. The design of benefit packages must align more closely with the goals of integrated global payment systems. Investments in health IT need to be shared by all.

Nancy Kane, Harvard School of Public Health: She doesn't think that federal reform will "blow us out of the water," but the added federal subsidies that Massachusetts has been enjoying under the Medicaid waivers will diminish.

Andrew Dreyfus, Blue Cross Blue Shield of Massachusetts: During the drafting of the first health reform law,  sponsors deliberately decided to focus on expanding access and deferred decisions on cost and quality until the future."The future is now," he said. He also said that if the sponsors of the original bill had tried to addressed every detail in the law, nearly a half million people still wouldn't have health insurance today. Fee-for-service incentives for volume and complexity don't serve us well today. Global payments can put physicians and patients back in the center of the health care system. 

Leslie Kirwan, state Secretary of Administration and Finance: She praised the MMS' work in collecting detailed feedback and insight from physicians throughout the state. "There's always going to be learning in this," and success will lie in responding to developments as the system is implemented.

The commission then unanimously voted to accept the report.

Payment Commission Recommends Global Payments; MMS Urges Cautious and Careful Transition

The Special Commission on Health Care Payment Reform met for the final time today and voted unanimously to support a recommendation for the gradual implementation of a new payment model for health care providers in Massachusetts.

The new model - global payments - seeks to moderate the rising cost of health care, while simultaneously providing support and incentives for physicians and hospitals to provide high quality, patient-centered care.

MMS President-Elect Alice Coombs, MD, was the only physician member on the nine-member panel, which also had representatives from state government, the state legislature, health plans, hospitals.

The MMS supported the commission's goal of supporting a closer integration of care throughout the health care system, but cautioned that the transition to a new system must be "careful, deliberate and thoughtful," because "a big transition like this has never been done on such a broad scale."

MMS President Mario E. Motta, MD, said, "Physicians want to be part of the effort to build a health care system, but they will have many questions and concerns about this proposal. Past experience has shown that a high risk of unintended consequences exists with new programs."

He said that physicians will need many years and a great deal of support to make such a transition. Very "few physicians could succeed under this new system today, and their readiness to make such a transition is highly variable across the state," he noted.

The commission said the transition could take up to five years. Its report acknowledges that physicians and hospitals will require lots of support to develop the financial, technical and legal capabilities needed to succeed in a new model, and that government and health plans should be required to provide that support.

Dr. Coombs said, "There’s a lot at stake, and there’s a lot of work to do. This report outlines a strong vision of the future, but many details remain to be worked out. We will be working closely with government, payers and our colleagues in medicine to ensure that patients receive high-quality care that is affordable and accessible."

Read the MMS statement here.

Download the commission report here.   (.pdf, 77 pages)

Summary of Global Payments Model

(Excerpted from the commission report.)

Global payments prospectively compensate providers for all or most of the care that their patients may require over a contract period, such as a month or year. Usually estimated from past cost experience and an actuarial assessment of future risk related to patient demographics and known medical conditions, global payments reflect the expected costs of covered services. As with episode-based payments, providers hold performance risk in a global payment system. To protect providers from also holding insurance risk, global payments must be risk-adjusted so that they reflect the underlying health conditions and predictable probability of illness among each provider’s patients. Carriers might also develop stop loss or risk corridor arrangements with providers to further protect them from insurance risk. Insurance carriers retain insurance risk for unpredictable illness and also adjust the level of global payments to reflect expected cost of consumer incentives (such as cost sharing for particular services or providers) in their benefit designs.

Global payments may be combined with complementary payment-related strategies (including P4P) to encourage improvements in quality, care coordination, and patient-centered care. Global payments, as envisioned, are very compatible with the concept of a medical home, which focuses on patient-centered care and on care coordination for patients who may have one or multiple chronic conditions.

The Special Commission viewed global payment models as having important advantages. They offer strong incentives for the efficient delivery of the full range of services that most patients need. They emphasize primary care and reinforce the goals of patient-centered medical homes. Moreover, some Massachusetts providers already have operational experience with some form of global payment. An estimated 20 percent of commercial physician payments are currently made in Massachusetts under some form of global payment. This experience suggests that broader adoption is feasible (since many providers already are managing under it successfully) and provides a base for wider progress towards global payment.

Finally, the Special Commission noted that global payment is compatible with P4P, which was viewed as important in protecting consumer access and encouraging the high-quality, evidence-based, patient-centered care that is central to the Special Commission’s vision for payment reform. At the same time, the Special Commission recognized that there are challenges to replacing FFS with global payment—including adoption of appropriate risk adjustment methods and the widespread participation of providers, some of whom have little or no operational experience with global payments or integrated delivery systems.

Payment Reform Commission's Final Meeting is Tomorrow

The Special Commission on Health Care Payment Reform is scheduled to meet Thursday morning to vote on its final recommendations for a new provider payment model in Massachusetts.

It is widely expected that the report will recommend a gradual transition to a global payment system, in an effort to promote efficient, high-quality care, through greater coordination and collaboration among all areas of the health care system.
 

The Massachusetts Medical Society has consistently argued that any transition must be careful and methodical, to preserve patients’ access to care and avoid unintended negative consequences. To achieve this, physicians must be provided with a great deal of financial, technical, legal and structural support for any new model to succeed. We will continue to advocate for this support when the state and the Legislature begin the work of implementing the commission’s recommendations.

We will provide a detailed report on the meetings and the recommendations tomorrow afternoon.