It was good to see Minnesota Public Radio get an early start truth squading an emerging candidate for the GOP presidential nomination, former Governor Tim Pawlenty. It seems that Minnesota’s ex-gov has been promoting his health care bona fides and stretching the truth a wee bit. Reporter Lorna Benson critically examined some of what Pawlenty has been claiming. Her analysis has relevance for every journalist seriously interested in looking at the fixes du jour for soaring health care costs.

Pawlenty said in an earlier public radio interview that he doesn’t like the federal health reform law because it largely expands coverage and does virtually nothing to control costs. Many more neutral experts say the same thing. In Minnesota, Pawlenty said cost control comes first. “Don’t just say we’re going to pay you for endless volumes of procedures,” he said, noting that the state’s experiment with bundled payments, called baskets of care in the gopher state, is “extremely promising and it works.”

Well does it? The state is experimenting with the idea that docs and hospitals will get one bundled payment to provide all the care a person needs for a specific condition. In the old era of managed care—when Minnesota led the way to bring costs down—a similar idea went by the name of capitation. Like today’s bundled payments, capitation gave providers a fixed payment to care for a group of patients. But it didn’t really work. The hope is that the new bundles will do a better job of promoting efficiency. If docs do a good job of managing care well, they get more money; if they don’t, they lose.

But in Minnesota no provider has agreed to use the baskets the state has created and instead they are writing their own rules with the health plans. Benson described how the basket for obstetrical care that the providers designed works. Instead of one payment that includes delivery of the baby, the basket pays only for prenatal care, a much cheaper proposition than an actual delivery. Docs presumably can still bill separately for that, and are off the hook if a delivery turns out to be more complicated and costly. Benson also reported that there are no data showing any costs savings associated with baskets of care because the arrangements between insurers and doctors are private. So much for transparency. And so much for Pawlenty’s claim.

Minnesota is also experimenting with paying doctors based on how good they are. If they practice good medicine, they get a gold star in the form of a bonus. The idea is to pay the best doctors more and he worst ones less. That idea has been kicking around for some time and is embedded in the federal reform law. Said Pawlenty:
“We’re interested in ‘did this person get optimal care? Did they get better quicker.’ If they did, and you get more and more of your patient load meeting those kinds of criteria, we’ll pay you more as a provider.”

Is that working? Benson asked Linda Berglin, a Democratic state senator who helped get this experiment off the ground. She said that a relatively few number of doctors have been inspired to compete for the small pot of bonus money available. Furthermore she said pay-for-performance has not saved any money. “It’s cost us. These payments were on top of what they were getting before.” Berglin is pinning her hopes on the federal law because the state initiatives have had little effect.

Other candidates are likely to trot out these “cost-savers,” and the press would do well to keep Minnesota in mind, particularly the remarks of the state’s former Republican Sen. David Durenberger, who is featured in Benson’s piece. He said his state has been tinkering with this cost control stuff for twenty years, and the state has not been able to make a dent in health costs. Larger forces that shape the health market have gotten in the way. “We’re still experimenting here in 2011. We’re still at the demonstration level. We’re still at the experimentation level,” he explained.

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