Payment Reform in Massachusetts

The other shoe just dropped in Massachusetts.

Two months ago I wrote about the potential demise of fee-for-service payment in Massachusetts. Yesterday the ten member Payment Reform Commission unanimously recommended that Massachusetts move to a system of global payments for health care. (See a Boston Globe article here.)

Massachusetts's approach to health care reform is somewhere between bold and reckless. The state chose to start by addressing access, knowing that it would ultimately have to come to grips with runaway costs. It gambled that enthusiasm, pride, and perhaps also the shame of failing with a national spotlight on it, would help it grapple with the cost problem if and when it succeeded in improving access.

At this point 97% of Massachusetts residents have health insurance - the highest rate in the nation. But in the recession the program is unaffordable, and both services and membership are being scaled back, at least temporarily. Without cost containment the promising reform program will go down the tubes.

Ever since I joined the practice at the not-for-profit Harvard Community Health Plan HMO (now Harvard Vanguard Medical Associates) in 1975, I've been a strong believer in the clinical, financial and ethical reasons for budgets in our health care system. Learning to live within budgets of money and time is one of the core components of becoming a mature and responsible person. It's a piece of moral insanity that we've allowed our insurance system to follow the cost trend in a passive manner.

Global budgets for health care make it easier - and imperative - to take a holistic view of patients and their care. It becomes financially feasible to spend more time with patients and in communicating with other clinicians, social agencies and family members when these activities will promote better health.

In the 1980s, when I was responsible for components of the Harvard Community Health Plan practice, one of our best primary care physicians said to me - "Jim, if you want to save money, the best way is to give us more time with our patients...make the basic appointment 20 minutes rather than 15." I believed that at least for physicians like him this was true. (Alas, for a range of reasons I wasn't able to do the experiment.)

Now the ball is in the court of the Massachusetts legislature. I hope it will have the wisdom and the guts to follw the Payment Reform Commission's recommendation. Another bold step in Massachusetts might prod Congress to get real about costs. Rather than fighting about where we'll find another trillion dollars and pretending that comparative effectiveness studies and market competition will miraculously bend the cost trend, Congress will ultimately have to accept the fact that affordable health care requires budgets.

(See here for my previous argument that more money without global budgets will mean worse care and unhappier doctors.)