Thursday, September 30, 2010

Big Changes

Chapter 2 of health care reform in Massachusetts deals with efforts to control cost. The main result so far has been a recommendation from a study commission to scrap the traditional fee-for-service method of paying doctors, hospitals, and other providers of health services. Fee-for-service is seen as giving providers an incentive to increase their income by providing services that are of little if any benefit to the patient.

This issue is unique to health care because of the large role that providers, mainly physicians, play in deciding what services patients receive.

Earlier this year, an effort to design a replacement for fee-for-service bogged down in disagreement over its provisions. However, the September 27 issue of The Boston Globe reported in a feature story that the state administration is designing a payment system which it hopes to complete before the end of the year. According to the report:

“The system, called global payments, would require doctors, hospitals, and other providers to band together into groups called accountable care organizations that would split the payments and better coordinate patient care, thereby improving quality.”

The report goes on to identify the issues to be resolved, which include “….how much power state regulators will have over the prices paid providers, the rules for forming accountable care organizations, and whether providers – many of whom profit from the fee-for-service system – will have seats on the board that eventually oversees the potential dismantling of that system.”

There are three other implications that seem to be going unrecognized – or, at least, unmentioned.

One is that moving to global payments will mark the end of medicine as an independent profession. The only physician-controlled organizations with the potential for accepting and administering global payments are the large, multi-specialty group practices, of which there are very few. The others are hospitals and HMO’s. The power of the purse will prevail and the organizations that get the money will have control over the care it finances.

Second, global payments will mark the end of freedom of choice of physician as we have known it. The organization that must provide care within a fixed amount of global payment will insist on determining which doctors provide the care. Patients will no doubt be able to choose from within the organization’s panel of physicians, but not from doctor’s outside the panel.

Third, patients will have to learn to put their confidence in organizations rather than in individuals. They will presumably have some ability to select the organization to which global payment in their behalf is to be made. Having done so, they will be limited to receiving care from that organization – at least for some extended period - unless they pay from their own pocket, which they are not likely to do.

These are big changes – bigger, apparently, than is being recognized.

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