Mass. Panel Recommends Scrapping Doctors, Hospitals Payment System

The Boston Globe: "A state commission recommended yesterday that Massachusetts dramatically change how doctors and hospitals are paid, essentially putting providers on a budget as a way to control exploding healthcare costs and improve the quality of care. The 10-member commission, which includes key legislators and members of Governor Deval Patrick's administration, voted unanimously to largely scrap the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual procedure or visit. That arrangement is widely seen as leading to unneeded tests and procedures. Instead, the group wants private insurers and the state and federal Medicaid program to pay providers a set payment for each patient that covers all that person's care for an entire year and to make the radical shift within five years" (Kowalczyk, 7/17).

The New York Times adds: "The recommendations, if approved by the legislature and Gov. Deval Patrick, would make Massachusetts the first state to end the practice of paying health care providers for each office visit, laboratory test or procedure." The recommendations come as changes to the national payment system are debated in Washington, but so far, "those discussions have focused more on providing financial rewards for high-quality preventive care than on demolishing the fee-for-service system" (Sack, 7/16).

"In 2006, Massachusetts adopted a health-care law that has attained near-universal health-insurance coverage -- much of which has become a model for national plans now being debated in Congress," the Wall Street Journal reports. "But the plan has done little to control costs, which now are 33% higher than the U.S average and projected to grow faster than the rest of the country, the commission says." Though the panel's vote was unanimous, some members expressed reservations, with the state's top doctor representative urging the legislature to proceed "carefully, deliberately and thoughtfully" (Shishkin, 7/17).

"Proponents... say the current system encourages the misuse and overuse of medical services, driving up costs... Skeptical health care providers say they want to see more details of the plan, major elements of which must be filed as legislation and approved by lawmakers and the governor before taking effect," the Associated Press/Washington Post reports (LeBlanc, 7/16).

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