Doc Gives Grim Diagnosis to “HCR II” in MA

WBUR’s CommonHealth blog posted an interview with Dr. Wayne Glazier on payment reform that hits so many of the important issues on this complex topic.

I have written on the Governor’s proposal a few times before and testified in front of the Joint Committee on Health Care Financing outlining some of my concerns. However, Dr. Glazier provides a front line perspective that many on Beacon Hill try to simplify in an effort to pass health care reform “phase II” quickly.

1) Global payments don’t get the patient involved in containing costs. The consumer needs to get involved. The current situation puts us in a very bad spot. My patient says ‘I want to go to UMass for my surgery,’ and I say, ‘You can go to St. Vincent’s, it’s cheaper,’ and the patient says, ‘I don’t want to go there, I want to go here.’ So now I have to be the cop and say, ‘If you go to St. Vincent’s, we’ll save all this money.’ What does the patient care?

2) No one even knows how much things cost.There’s no transparency in medicine….The doctor’s pen controls the health care costs, but if the doctor’s pen doesn’t know what things cost, how can he manage? That’s the problem. And as a patient, you don’t have the information to make your decisions. If you buy a car, you can look at all kinds of information like MPG, warranty. When you buy an operation, all you get is “Well, I’ve heard of that hospital, I know it’s a good place, they advertise a lot, they must be good.”

3) The problem with risk-sharing is the risk. We’re struggling with this risk-sharing….We’ve been taking a percentage of the risk, not full risk. It’s a way to take the risk without going under. The problem with the Blue Cross Alternative Quality Contract [a model touted by the Patrick administration] is that it’s a full-risk contract, so you’re on the hook for everything. That’s why we struggle.

‘Until the patient has some skin in the game, how is it going to work?’
4) Without full information, how can we take full risk? Information Technology is the key to this whole thing, because if you don’t have a good information system you can’t manage the risk. All our doctors are on electronic medical records; the problem is that there are like 500 medical IT vendors, none of the medical records talk to each other, the hospitals don’t talk to each other. We’re moving in that direction but we have a long way to go.
5) How do you operationalize it? What I think they should do is pick out the 10 most expensive diagnoses, what Blue Cross spends the most on — congestive heart failure, hip surgery — then go to an organization like ours and say, ‘We’ve identified congestive heart failure as the most expensive item we pay for, so we want you to manage this. Come up with a bundled payment. Get your cardiologists, internists, your primary care people to to come up with a logarithm to figure out how to manage this, and let’s try a pilot that makes this work. You keep the costs down, the doctor doesn’t go bankrupt, rather than diving into this.
6) Benchmarking is everything. So the idea is, they give you a ‘global payment’ budget, The budget’s based on what you did last year. It doesn’t take into account your patient mix. We got shafted one year. We had all these pediatricians with relatively healthy patient populations, so suddenly our benchmark was much lower. We were taking the same amount of risk but the benchmark was lower, so we lost money.

When you start out in an Alternative Quality Contract-type arrangement it’s based on what your budget was last year. So if you’re a bad actor, your budget’s going to be really high. If you’re a good actor it will start out really low. I was at a meeting with two prominent medical groups from Minnesota: one did extremely well under an AQC, the other did terribly. What’s the difference? It’s all about who you’re benchmarked against.
7. More consolidation to come. The biggest problem I see now is that the AQC can force doctors into giant mega-groups, because in order to manage this risk you need huge amounts of money, so independent doctors won’t be able to do it. So pretty soon Massachusetts will have three or four big groups tied to hospitals. So who’s going to lower costs? Hospitals are the centers of higher costs. Who’s going to lower costs?

From his mouth to the ears of those on Beacon Hill.

See the whole interview here.