A Massachusetts "global payment" program -- in which physicians are rewarded for providing quality care -- could serve as a nationwide model for reducing health care spending, as early research suggests the program is successful at lowering health care costs, the Los Angeles Times reports.
For the program, commercial health insurers sign contracts with physician groups, who receive a set budget to care for a group of patients. If the patients are healthy and the physicians do not exceed their assigned budget, they get to keep a portion of the savings. If health spending goes beyond the budget, the physicians are penalized. In the last three years, health insurers in Massachusetts have moved nearly one million state residents into plans that reward or penalize doctors for the quality of care.
Critics of such programs have said that they create a financial incentive for doctors to provide less care. However, Blue Cross Blue Shield of Massachusetts -- one of the participating insurers -- links its contracts to dozens of quality metrics, such as preventive screenings, prescribing the proper drugs and patient satisfaction. This system allows the insurer to track physicians who withhold care and levy penalties.
An analysis published in the journal Health Affairs found that although the savings were small, health spending increased at a slower rate for medical practices that contracted with BCBS than others. "These results suggest that global budgets with pay-for-performance can begin to slow underlying growth in medical spending while improving quality of care," the analysis concluded.
Despite the success of the strategy, it is unclear if other states will follow a similar model, especially those whose opposition to the Affordable Care Act is strong. "Much of the rest of the country is still battling over the merits of covering everybody," Alan Weil, president of the National Academy for State Health Policy, said (Levey, Los Angeles Times, 12/12).