Early results show that putting doctors and hospitals on a budget — a payment method promoted as a way to curb health costs — has not saved money in Massachusetts, Attorney General Martha Coakley concluded in a report released yesterday.
One reason, an investigation by her staff found, is that providers with market clout still appear able to negotiate high payments, just as they do under the traditional system that pays them a separate fee for each procedure or visit.
The yearlong review of what six large Massachusetts insurers paid providers in 2009 found that doctors working under the new “global payment’’ system — which puts them on a per-patient monthly budget — generally did not cost less than doctors paid the standard way. And in some cases, large doctors groups such as Atrius Health and Mount Auburn Cambridge were far more expensive than physicians paid under the fee-for-service system, despite being put on a budget.
In an interview yesterday, Coakley said that unless the state corrects this “dysfunctional health care market’’ where some providers are paid better than others for providing similar quality care, insurers will be building a new house on a “flawed foundation.’’
But insurers and hospital groups said it is unfair to criticize global payments based on just one year of results because they will take more time to bring down costs. “It is far too early to judge their potential impact,’’ the Massachusetts Hospital Association said in a statement.
Coakley recommended that the state adopt “temporary statutory restrictions on how much prices may vary for similar services.’’ She said this would “reduce health care price distortions’’ until insurance plans that direct consumers toward less expensive providers, and other measures have time to work.
In the interview, she declined to outline how the state should intervene. But she said Governor Deval Patrick’s proposal to have the insurance commissioner review premiums and disapprove increases based on excessive fees for providers is one option.
If insurers and providers “can’t solve it on their own or are not moving fast enough,’’ then the state needs to move to bring down excessive rates, Coakley said.