Health Cost Control

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Health Cost Control

• Payment Reform and Health Cost Control in
  Massachusetts
• Fall 2009

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Why Now?

• Fee For Service isnt working

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Fee-For-Service broken

• Pays providers for individual services performed
• Not all services are paid for fees not aligned
  with actual costs
• Rewards service volume and complexity rather than
  outcomes, quality and efficiency

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Whats Happening

• State Initiatives
• Quality and Cost Council (chapter 58)
• Chapter 305
• Special Commission on the Health Care Payment
  System
• RAND Report
• Quality and Cost Councils Roadmap
• DHCFP Cost Driver Report and Hearings
• Hospital and Insurer Reserves Report

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Where do we want to go?

• Higher quality
• Equity
• Coordinated Care
• Bend the curve
• In other words
• A Functional Health Care Delivery System

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Special Commission

• Common transparent payment methodology
• All-payer Global Payment for the implementation
• Payments made by insurers to Accountable Care
  Organizations to providers
• Oversight Entity

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Global Payment

• Fixed payment per patient for a set time period
• Incentive to contain costs
• Through coordination and health promotion?
• Example BCBS AQC or Atrius Health

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Isnt this Capitation?

• Incentive to avoid high-cost patients?
• Incentive to not provide needed care?
• To avoid, payments should be coupled with
• risk adjustment
• performance measurement
• reporting
• (we add patient empowerment)

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Of special concern

• Medical Homes
• Workforce
• Social and Economic Structures
• Consumer empowerment
• Public Health

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Medical Homes

• Focus on primary care, disease management and
  care coordination
• Goal to provide proactive, accessible and
  comprehensive patient-centered care
• Intended to improve value, not necessarily reduce
  costs
• Financially rewards providers for coordinating
  care according to the medical home model

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Workforce

• Dwindling supply of primary care docs
• Ancillaries
• Cultural competency

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Infrastructure

• Urban Planning
• Transportation
• Schools

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Consumer Empowerment

• Design a system to support patients
• Consumers are the heart of the care system and
  must have a strong voice in the governance of the
  payment reform structures
• Chronic disease focus
• Grants pilots (ie. HealthyMass)

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Next Steps

• Cost Driver Report and Hearings later in the fall
• Legislation bill will be payment reform
• HCFA Network and overall Community