New York Times reporter Kevin Sack dug deeper, unearthing the roots of the dilemma: serious cost containment would cut the income of the formidable Massachusetts medical establishment. As Brandeis health policy professor Stuart Altman told the Times: “Really controlling costs requires just stopping spending.” In other words, what’s needed is a limit or cap on spending allocated to medical services. Nobody is talking about that, either in Massachusetts or nationally.
“[Cost control] was really never an active part of the conversation,” says Nancy Turnbull, a professor at the Harvard School of Public Health. The law’s biggest nod to cost containment was the Health Care Quality and Cost Council, which has created a Web site to help consumers shop for the best care at the lowest price. The MyHealthCareOptions site gives some data about quality measures for hospitals and costs for some procedures. According to the state, 2,700 people visited the site during the last three weeks in May. It’s hard to say whether they found it helpful. It’s much easier to say the site does not reduce costs, if at all. There’s little evidence that consumer shopping reduces the price of medical services.
The state built its plan with federal dollars, assessments on employers, redistributing existing funds, and new general revenues. “It needs a dedicated revenue source,” says Boston Medical Center vice president Tom Traylor. “It was all just cost shifting.” So the state has had to raise copayments and premiums for people receiving subsidized coverage, and has increased tobacco taxes to help make ends meet. This year, the state is facing a $4 billion budget gap; the state senate has proposed taking away subsidized care for some 28,000 legal immigrants who are now eligible.
Another cost-control strategy is to enact recommendations made by the Special Commission on the Health Care Payment System, one of which is to give providers a negotiated set payment that covers all the care a patient would need for the year. “The fee-for-service system has all the wrong incentives,” a commission member told the Globe. That sounds an awful lot like what policy experts said fifteen years ago. So do these new “global payments,” which sound like the capitation payments HMOs made to providers in an effort to cut costs. As the great HMO backlash from patients and docs flared up, capitation payments gradually disappeared for some providers and were replaced with, yes, the old-fashioned fee-for-service arrangements.
I asked Sarah Iselin, the state’s commissioner of the division of health care finance and policy, about the difference. She said this time payments would be coupled with performance measures of quality, adding “it’s different from the capitation of the 90s.” I asked a health plan official the same question. He said “they really mean the same thing, for better or worse. Capitation has become a dirty word. What the commission has tried to do is rebranding.”
A lot of newbies cover health these days, and might not be versed in all the payment jargon. The trick will be for reporters to decipher the new buzz words and really deconstruct their cost-cutting potential. Here’s another shout out to the Globe for doing just that. Its story in early May told readers: “The new payment system the commission expects to recommend has been tried before.”