Massachusetts gives incentives to reduce care to contain costs

NY Times:

 On the Republican campaign trail, the health care debate has focused on the mandatory coverage that Mitt Romney signed into law as governor in 2006. But back in Massachusetts the conversation has moved on, and lawmakers are now confronting the problem that Mr. Romney left unaddressed: the state’s spiraling health care costs.

After three years of study, the state’s legislative leaders appear close to producing bills that would make Massachusetts the first state — again — to radically revamp the way doctors, hospitals and other health providers are paid.

Although important details remain to be negotiated, the legislative leaders and Gov. Deval Patrick, all Democrats, are working toward a plan that would encourage flat “global payments” to networks of providers for keeping patients well, replacing the fee-for-service system that creates incentives for excessive care by paying for each visit and procedure.

“We have shown the nation how to extend care to everybody,” Mr. Patrick said in an interview, “and we’ll be the place to crack the code on costs.”

Those who led the 2006 effort to expand coverage readily acknowledge that they deferred the more daunting task of cost control for another day. It was assumed then that the politics would pit doctors, hospitals, insurers, employers and consumers against one another, and obliterate the fragile coalition behind the groundbreaking coverage law.

Predictably, the plan did little to slow the growth of health costs that already were among the highest in the nation. A state report last year found that per capita health spending in Massachusetts was 15 percent above the national average. And from 2007 to 2009, private health insurance premiums rose between 5 and 10 percent annually, according toanother state study.

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 The networks would receive an annual fee for the care of each patient, with higher payments for patients deemed to be greater health risks and with bonuses for high-quality care. In theory, the healthier these so-called accountable care organizations can keep their patients, the more reimbursement they can pocket as profit. Insurers are already required to accept all applicants in Massachusetts, as will be the case nationally, in 2014, if the new federal health care law survives its legal and political challenges.

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 Because medical spending is driven not just by volume but also by pricing, a major question has been whether global payments alone will have much effect. It may be equally important, Mr. Patrick and others argue, to rein in the ability of the state’s most prestigious teaching hospitals and physicians’ groups to negotiate high rates of reimbursement.

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This is still liberal control freak top down government control.  It pushes the incentive to reduce care to stay within a budget.  A better solution would be medical saving accounts control by the patients with a high deductible catastrophic care policy.  That would put the decisions in the hands of the patients and not in the hands of state bureaucrats of doctors trying to survive under their NICE type guidelines.  The problem with liberals is they do not trust people to make the right decisions for their own care.