In an attempt to rein in year-over-year cost increases, Massachusetts largest insurer is proposing to change the way it reimburses hospitals and physicians for patient care. The question is whether providerswho have long clamored for a payment system that better reflects their practices and rewards quality over quantitywill sign on.
Blue Cross and Blue Shield of Massachusetts is offering providers the option of switching out of a traditional fee-for-service model into a flat-fee per patient sum per year, adjusted for age and illness, plus performance bonuses of up to 10% for quality improvement. The insurer declined to provide estimates of what the payment would be.
The new payment system is being rolled out first through the insurers HMO. The incentive program for PPOs hasnt been fully worked out, said Chris Murphy, spokesman for the Massachusetts Blues.
The insurer doesnt expect to cut costs, but to slow healthcare spending through efficiencies. It estimates that spending would grow at 4% to 6% per year if providers sign on, as opposed to 10% to 12% annually today.
This new payment program will be offered through its five-year contracts, and the insurer expects to have providers sign on in the next few months.
Better outcomes have demonstrated that they lead to savings, Murphy said. We think well see more innovative and creative care on the provider level. The idea is that the provider would be in the drivers seat in terms of time-management and treatment, Murphy said.
This is a very impressive step, and hopefully it will work, said Paul Ginsburg, president of the Center for Studying Health System Change. Some outstanding questions include whether the model is nuanced enough to be viable in the real world, whether providers will sign on, and whether smaller practices would be left out, Ginsburg said.
To some, this may smell like capitation, where providers get a set fee for patients, which can lead to rationing. But Murphy said that because patients will be risk-adjusted, and incentive rewards are built in, that isnt the case.
Officials at both Partners HealthCare and 503-bed Beth Israel Deaconess Medical Center in Boston expressed wariness of the new payment program, saying they had not seen proposed rates or other details. Were open to different ways to skin the cat on how we get paid, said Peter Markell, vice president of finance for Partners HealthCare. In the end, a lot of people are just seeing this as going back to capitation.
The program dovetails with the Blue Cross and Blue Shield Associations national five-point plan for covering the uninsured, unveiled Jan. 23, which builds on our employer-based system. It calls for improved research on effective healthcare; changing incentives to promote better care; empowering consumers and providers to make informed decisions; promoting health and wellness; and fostering collaborative solutions with the government to keep people insured.