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.
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.
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."
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.
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