Annals of unpublished letters: NYT flags global payment proposal in Massachusetts

Today the Times editorial board, lauding the "Massachusetts experiment in near universal care," flags the recent proposal to move the state to a "global payment system":

Now the state seems poised to tackle costs — with an approach that is far more ambitious than anything currently being contemplated on Capitol Hill.

A special commission has just recommended that the state try, within five years, to move its entire health care system away from reliance on fee-for-service medicine, in which doctors are paid more for each additional test or procedure they provide.

In its place, the commission wants a system in which groups of doctors and hospitals would receive fixed sums to deliver whatever care a patient needed over the course of a year. The hope is that doctors would be motivated to deliver only the most appropriate care, not needless and excessively costly care, with safeguards to ensure that they do not skimp on quality.

On July 20, a certain frustrated letter writer sent this to the editorial board as well as to the letters editor:

While exhorting Congress to do more in pending healthcare reform legislation to control costs, the Times editorial board might have noted the truly radical core proposal of Massachusetts' Special Commission on the Healthcare Payment System: abandoning fee-for-service in favor a "global payment" system that pays by the patient, rather than by the treatment, and rewards good performance. At the core of this system would be development of Accountable Care Organizations that accept responsibility for the full spectrum of each patient's care.

This proposal goes to the heart of what the editorial board itself has identified as the central driver of healthcare inflation: providers' incentives to prescribe expensive -- and often unnecessary or unproven -- treatments. The reform, if adopted, will not be easy. The Commission envisions a five-year phase in period to develop a global payment system that "will include adjustments for clinical risk, socio-economic status, geography (if appropriate), core access and quality incentive measures, and other factors." But such reform, if adopted, would be truly fundamental.

Footnote: on a quick read, it appears that Medicare Advantage providers are paid by the patient rather than by the procedure -- and have not reduced healthcare costs. Why not? More on this later....