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MA Governor Deval Patrick at the DNC (photo: WEBN-TV)
Massachusetts Attorney General Martha Coakley has released a new report that indicates Gov. Deval Patrick’s goal of controlling health care cost by moving the state towards a global payment method is unlikely to produce real savings. From the report (PDF):
[T]he information we reviewed shows that the shift to global payments without other fundamental changes may not only fail to control cost, but may exacerbate market dysfunction and market inequities by establishing widely different per member per month rates based on historic pricing disparities.
[...]
[P]roviders paid under a global risk contract do not have consistently lower TME than providers paid under a fee-for-service contract. Some risk-sharing provider groups are among the highest TME providers in the state while some groups paid on a fee-for-service basis are among the lowest TME providers in the state. This is true even for providers who have been in global risk contracts for five or more years with all three large health insurers, including Atrius, Health Alliance, Mount Auburn Cambridge IPA (―MACIPA‖), and South Shore PHO.
(emphasis added)
The report also found that switching to global payments didn’t address the problem of a huge variation in payments that can be explained by differences in quality of care.
Our examination shows that there is wide variation in payments to physicians and hospitals in Massachusetts for similar services that is not adequately explained by differences in the quality of care provided. This is true whether providers are reimbursed on a traditional fee-for-service basis or paid on a global, or risk basis.
While it is still early in the state’s push towards global payments, I’ve often thought cost control promises of merely changing payment methods has always been overstated.
Frankly, what you have is some providers with substantial market power and naturally they intend to use this market power to make strong profits. They will use their power to make sure they are making big profits regardless of the payment system.
To control costs you really need to fix this provider market power issue either by using single payer or all-payer.
The relative market power of the payers to demand low prices is far more important than the payment methods.
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Maybe the pervasive “tax exempt status” of insurers and providers in Massachusetts is the root of the cost control problem? How ironic it is that the very corporations who have profited greatly off of the illnesses of the American people, now are entitled to our money under fear of tax penalty levied against the taxpayer insured, who is ignorant of the fact that premium he pays via coercion is in fact to a tax exempt corp? No equal equal protection for Americans as law is used to pigeon Americans into contracts, because government cannot effectively control tax exempt corporations. Get a copy of that Public Charities Listing from the MA AG and begin to vomit once you realize the reality! Facts Facts Facts never brought to the attention of the governed is a deliberate. Makes you kind of wonder what took place on Beacon Hill between lawmakers and the corporations in healthcare? Disgusting….
What is all payer?
Aren’t insurance companies exempt from anti-trust? Doesn’t that have a bearing on how they operate?
all-payer is where the government sets one rate and every insurer pays that same rate. How Japan, Germany, etc… all work
Anti trust exempt and tax exempt? This is the root of the problem. How many people realize BCBS of Massachusetts, is considered a Public charity? How many public charities have 11 million dollar kicking around to pay an Executive leaving a tax exempt corporation? None! This is a profit making business. Treat it a such and use the tax code to control corporate behavior. Instead Americans are leveraged into servitude to the tune of a $1200.00 a month for a family plan via BCBS. Yup Anti-trust exempt and tax exempt? What a deal for these state based corporations. Sounds like a page from the Jim Crow handbook to me!
First, SINGLE FING PAYER!
Ok, that’s done.
Second, the all payer idea …
Let’s actually think about this. Yes, yes I know Fox would call it “socialism”, so it must be a good thing for the people???
And that kind of reactionary thinking can lead to problems for … us. That’s right, us, the people.
My basic premise is this
1. The all payer idea “seems” like a good idea. And states like MD seem to find it “good”.
2. But let’s also consider that geography and other issues in America are significantly different than Germany or … anywhere else.
We know single payer works. Hello, Medicare??? So we have an American system, TRIED, TESTED, and … wait for it … EVIDENCE that it works well. Less costly, and better performance. And for a population that tends to be “sicker”.
So as thinkers let’s go ahead and get the details of the MD plan. Then ask ourselves can this extrapolate to other areas. And no, this discussion should not involve those who benefit from “fixing” the decision. No insurance parasites. No hospital CEOs or anyone who benefits. It’s called conflict of interest, which for some reason is rampant everywhere in this country (oh wait, the reason is greed).
I know, here I am thinking like a scientist. Sorry.
The so-called Bismark plan? During the health insurance bill debate, Slate did a really interesting run down on the various programs around the world. I have it somewhere in my saveds but god knows where, at this point. One of the elements that I find particularly interesting about the bill that passed was the extension for children to age 26, I think it is. Now this is a middle class, and up, provision. For the poor, working or otherwise, and the people who already can’t afford insurance, that benefit is non existent. I had a conversation with a lawyer who was going on about that and I couldn’t seem to get his attention to the utter uselessness of insurance extensions for the millions of people who can’t afford any insurance. Insurance companies can, after all, charge more for the extension and anyone who can’t afford insurance surely can’t afford the premiums for that extension.
The key words here are “so far.” There isn’t enough data, and too many confounding variables, for the Coakley report to be useful.
I’m not saying that global payments will work on a large scale–in fact I have serious doubts–but there is some precedent in the DRG system which has saved Medicare a lot of money.
some insurers have been using it for several years in Mass and they did not find savings.
I will not say how long I’ve been telling my Mass Rep that Global payments don’t do squat – they do not respond to emails – just like the Mass “EXCHANGE” called the “CONNECTION” DOES NOT RESPOND.
But there are folks in Boston at the Capitol who are saying that Mass global payments require a Maryland Medicare waiver for a board to set prices and force all care givers to get the same amount of dollars as reimbursement from a 3rd part payer, regardless of who the payer is.
Of course Global payments still adds nothing to the mix, but if that gets Mass to pass the legislation for a price setting board, I am all for it.