Governor Deval Patrick called on legislators last week, in his State of the Commonwealth address, to eliminate the traditional fee-for-service system that pays health care providers separate fees for every procedure, test, and office visit. House and Senate leaders are working on their own bills intended to control costs.
The state’s four largest health insurers - Blue Cross Blue Shield, Harvard Pilgrim Health Care, Tufts Health Plan, and Fallon Community Health Plan - now have more than 1 million members in employer-sponsored health plans that put doctors at risk of losing money if they exceed the budget for their patients’ care, they said. Providers can earn extra profit if they spend less than budgeted.
Adoption of these “global payment’’ plans is driven by a desire to control soaring health insurance premiums by giving physicians an incentive to be more sparing in their use of expensive procedures, such as sophisticated scans. But it is also motivated by an eagerness to encourage more preventive measures, and that in turn improves care, which often is disorganized as doctors lose track of patients who need follow-up calls, visits, or tests.
“The numbers have grown dramatically,’’ said Marc Spooner, vice president of provider contracting for Tufts, where 70 percent of HMO members are cared for under budgets, compared with 17 percent three years ago. “The plan and providers have collectively recognized we have a responsibility to manage costs.’’
Insurers said at least another 150,000 Medicare and Medicaid recipients are covered under these types of arrangements, with the federal and state government pushing to expand this group.
Some health care executives said the surging popularity of global payment agreements shows that there is no need to give state government the power to reject excessive rate increases for providers, an idea included in Patrick’s proposed legislation and also endorsed by Attorney General Martha Coakley.
“Any legislation that is really focused on regulating prices would miss the point,’’ said Lynn Nicholas, president of the Massachusetts Hospital Association
