• Not goood news from Massachusetts

    In today’s Boston Globe, Liz Kowalczyk tells us we’ll have to wait for health system payment reform in Massachusetts.

    The state’s ambitious, first-in-the-nation plan to transform how hospitals and doctors are paid is on hold, at least for this year, largely because of disagreements among key officials, legislators, and providers over how best to control health care spending.

    Senate President Therese Murray, a leading advocate of payment changes, said in an interview that she will not file legislation to change the system this year, as originally planned, because of the logistical and political complexity of changing a system that has been in place for decades. The current payment system — in which doctors and hospitals are typically paid a negotiated fee for every procedure and visit — is also profitable for many providers.

    There’s broad agreement that the current fee-for-service system is unsustainable. But agreeing on how change it is another story. This is not surprising. Somebody, probably everybody, will have to give something up, whether it’s profit or access. There’s no way to cut costs without such changes.

    Meanwhile, emergency room use has continued to go up.

    The number of people visiting hospital emergency rooms has climbed in Massachusetts, despite the enactment of nearly universal health insurance that some hoped would reduce expensive emergency department use.

    According to state data released last week, emergency room visits rose by 9 percent from 2004 to 2008, to about 3 million visits a year.

    It’s not entirely clear how much Massachusetts’ health reform law is to blame.

    But, according to a report from the Division of Health Care Finance and Policy, expanded coverage may have contributed to the rise in emergency room visits, as newly insured residents entered the health care system and could not find a primary care doctor or get a last-minute appointment with their physician.

    David Morales, commissioner of the division, said several national and statewide studies have shown that expanding insurance coverage does not reduce emergency room visits. This is because the uninsured “are not really responsible for significant ER use’’ he said.

    The growth in emergency room use predates the health insurance law and mirrors national trends, according to Nancy Turnbull, a senior lecturer at the Harvard School of Public Health.

    “I don’t think the increase has anything to do with health care reform,’’ she said. “It’s much more reflective of [primary care] access problems.’’

    So, there you have it. Costs are rising, in part due to increased ER use. But efforts to rein in costs with a reformed payment system is on hold. I’m not surprised by either of these. The forces pushing increased costs and maintenance of the status quo are strong. Things will have to get far worse before they get better.

    • What Murray calls “global payment” has traditionally been called capitation.

      To the best of my knowledge for 30 years I have been “capitated” in some arrangement that I do not understand in full — but that I agreed with in words that I did understand when I signed up — through an arrangement between my healthcare insurance company and the healthcare clinic that I use (and that employs my primary care physician).

      Now that I am older and regularly need healthcare, I can equate capitation to a personal need. I need cataract surgery. But I have some other problems with my eyes that lessen the chance of the surgery’s success. My healthcare clinic’s opthamologist recommends that I wait until I believe the surgery is absolutely necessary (e.g. — I guess — if it reached the point where I could not drive).

      He clearly says it’s up to me. I think he is giving me good, medical-based, patient-centric, unbiased advice. But how do I know for sure that he isn’t looking down at the word CAPITATED in upper case letters beside my name on the form in front of him and thinking, “our business gets $x thousand from his insurance company that goes right to the bottom line if we do nothing to this guy and incur a lot of costs if we do.”

      That’s the problem with capitation. I admit I think like a businessman. I hope my doctor does not.

      When I signed up for this approach 30 years ago, the relationship was called a health maintenance organization and it was the leading edge of how healthcare costs and related insurance costs could be controlled. The insurance’s cost was much less than I was paying for my family’s insurance in what was then the traditional approach. I have no idea what it did to the other side of the equation but apparently it did not work out well because it seems that now — 30 years later — it is again “the new approach.”

      Can someone explain what happened in the intervening 30 years?

    • “That’s the problem with capitation. I admit I think like a businessman. I hope my doctor does not.”

      This is one of the nearly irreconcilable problems in medicine. Over the last 30 years many physicians have started to act more like businessmen. Go through journals and you find lots of ads for billing and consulting companies that will help you make sure that you do not “leave money on the table”. Contrary to David Cutler’s lament of no entrepreneurs, we have a lot of them, just no the kind he wants. While you worry about capitation, others are worrying about over utilization, which has been our long term problem.

      OTOH, a lot of docs, most IMHO, still have incentives other than pure financial ones. That is why I used the nearly qualifier above. Even in fe-for service, not everyone over utilizes. I suspect that the same holds for capitation.


    • What a mess. We spend more and more get less and less. Expect ER visits and the number of expensive tests to sky rocket (MRI/CT), but out comes will remain unchanged or get worse. Current fee for service doesn’t work because the reimbursement is so poor. Medical economic fact: Good health care is a lot cheeper than mediocre health care. The system is moving towards mediocrity.

    • Just another reason to go to Medicare for all funded by taxes.

      The US has the least efficient health care system in the world by a long shot, and it is absolutely clear a “for profit free market” system will cost as much as society as the profit driven parts can extract.

      I know some argue for essentially for Africa’s health care because it will be cheaper, but what nation is going to come into the US and provide charity care.

    • Third party payment is the culprit. Any system where you spend “other peoples’ money” will have utilization problems. Too bad we never gave Health Savings Accounts more of a chance. I’m the best judge of what I spend my money on.

    • There are two easy solutions to our healthcare problem:

      1. Force all healthcare providers to post all prices and take all comers at a standard rate, just as Walmart and Sears do.


      2. Give Walmart the job of running the nation’s healthcare. More folks will be served, even in rural areas, and prices will plunge.

      • @jimbino – I should give up remind readers that most of the good ideas–and I agree they are good in many respects–won’t work for political reasons. We really must accept half measures, at least in the short- to medium-term. That’s the nature of our system. We can dream, but we should not expect our dreams to be fully realized.

    • The ER usage jives with this study

      Health care access is a big deal, and is not the same thing as health insurance.