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Six years into Massachusetts’ ambitious effort to overhaul its health system, there are fewer uninsured residents but costs continue to rise. Physicians say that cost containment will be a major challenge going forward – and likely will hit them hard.
Signed into law in 2006 by then-Gov. Mitt Romney, the health reform program, called "An Act Providing Access to Affordable, Quality, Accountable Health Care," essentially requires all state residents to acquire health insurance. The state Medicaid program was expanded to cover those at higher income levels, and a health insurance exchange was created to offer private insurance to all others. The state completely covers plans for residents with incomes below 150% of the federal poverty level and subsidizes others up to 300% of the poverty level.
Those who do not buy insurance are charged a penalty on their state tax return, based on income.
The success or failure of the plan is being closely watched, as it is widely considered the model for the federal Affordable Care Act.
Now, almost 98% of adults and close to 100% of children in Massachusetts have health insurance, Dr. JudyAnn Bigby, health and human services secretary for the commonwealth, said at a recent presentation in Washington.
With better and more regular access to care, more residents are receiving preventive services.
"Our rates of screening for colon cancer, cervical cancer, [and] prostate cancer have all gone up significantly," Dr. Bigby said, adding that "we also know people are getting better care for diabetes." Emergency department visits for nonurgent conditions also have declined, especially for patients with asthma and chronic obstructive pulmonary disease.
Reform has been mostly well-received by both doctors and patients. A 2011 poll by the Harvard School of Public Health and the Boston Globe found that 63% of residents said they supported the law.
A 2009 poll of physicians found similar views. Of 2,125 respondents, 70% said they thought reform had been a good thing.
However, in spite of all the positives, 50% said that the medical practice environment had worsened since reform. The biggest complaint: the law‘s administrative burden.
Dr. Joseph W. Gravel Jr., president of the Massachusetts Academy of Family Physicians, agreed, adding that his practice employs a huge number of people just to do paperwork. It seems that "paperwork is used almost as a cost reduction strategy, it seems sometimes to a primary care doctor," he said in an interview.
Physicians in the Harvard survey also expressed concerns about rising costs, and were split on the law’s impact on access to primary care: Roughly a quarter said the law was hurting access, whereas the same number said it was helping.
The concept behind the reform law "was brilliant," because it increased insurance coverage and gave patients incentives to get preventive care, said Dr. Richard Dupee, governor of the Massachusetts chapter of the American College of Physicians. But at the same time, he said, the law "discincentivizes doctors from seeing patients because the reimbursement is so poor."
Dr. Louis Kuchnir, president of the Massachusetts Academy of Dermatology, said that although the law has increased the number of people with coverage, they do not have any better access to dermatology care.
"Very few dermatologists can afford to participate," he said in an interview. The reimbursement for Medicaid and the state-subsidized plan "is less than our overhead in many cases."
And with the law’s cost-containment requirements now on the books, things may get worse. Dr. Dupee said that "the handwriting is on the wall: Reimbursement is going to start going down across the board. Otherwise, there is no way to manage the cost of this thing."
Cost Containment Lags
No rigorous cost controls were included in the reform plan when implementation started. The intention was to get everyone covered first and then begin looking at the cost side of the equation.
A 2008 addition to the law began laying the groundwork for cost control by setting up several councils to study how best to rein in spending. The main work is in a 2011 proposal by Gov. Deval Patrick (D), which urged a shift from fee for service to global payment for state employees, Medicaid recipients, and enrollees in the Commonwealth Care program. Those groups account for about 25% of the state’s residents.
The law will also establish a new primary care residency program, supported by the state’s Department of Public Health, to increase the number of such physicians.
In addition, in June, Gov. Patrick signed into law a $32.5 billion budget for fiscal 2013 that mandates some $700 million in savings in health care.
Gov. Patrick estimated in a recent speech that the state spends $67 billion a year on health care and that it would account for 54% of the state’s budget in the fiscal year that ended June 30, with most of it going to the state’s Medicaid program, and to subsidies for Commonwealth Care.
Health costs have been and still are higher in Massachusetts than almost anywhere else in America. The average total medical expenditure in the commercial market was $414 per member per month in 2010, which was a 3% increase over 2009 expenditures, according to the commonwealth’s division of health care finance and policy. Not huge, but a growing burden.
The state’s Division of Health Care Finance and Policy said that premium increases slowed from 2008 to 2010, but still grew 7.5% in the commercial market. But that slowdown likely merely reflects cost shifting, said the agency, adding that employers are providing fewer benefits and charging higher copays. And that is potentially translating to reduced care, Dr. Kuchnir said.
State residents with private insurance "seem to be getting less and paying more, which is of course a negative for good medical care and for access," said Dr. Kuchnir.
Costs are partly being driven by an overreliance on tertiary medical centers, said Dr. Gravel. The majority of inpatient care is given at tertiary – not community – hospitals, he said.
Indeed, the state’s Division of Health Care Finance and Policy determined that inpatient hospital expenses grew 9% in 2010, more than any other spending category.
Transitioning From Fee for Service
Dr. Gravel also blamed the continued dominance of the fee-for-service system for continued rising costs.
Physician expenses grew only 2% in 2010, according to the Division of Health Care Finance and Policy. But expenses varied significantly, depending on location and size of the physician group, according to data collected by the agency.
Gov. Patrick has encouraged the development of ACOs (Accountable Care Organizations) and new payment models to address variation and to create higher quality, more-efficient care. One model that seems to be making a difference is the Alternative Quality Contract, developed by Blue Cross Blue Shield of Massachusetts. In 2009, BCBSMA struck global payment agreements under the AQC with seven organizations; four more joined in 2010, and in March, Boston Medical Center joined. At that time, the Blues said that two-thirds of the physicians in its in-state HMO network, who provided care to 76% of its members, were covered under an AQC. The contract is for 5 years and is similar to a patient-centered medical home, where patients are assigned primary care physicians.
The AQC physicians "now significantly outperform the rest of BCBSMA’s fee-for-service network on a comprehensive set of quality and outcome measures," said a Blues release.
A recent study in Health Affairs seemed to back that assertion (2012 July [doi:10.1377/hlthaff.2012.0327]). The biggest gains so far were in the second year of the contracts; the same was true for savings, which were 1.9% in the first year and 3.3% in the second year, when compared with nonparticipating physicians. The results suggest that global payments work to reduce costs, but that that providers needed time to adjust to the global budgeting, according to the study.
Harvard Pilgrim Health Care, the second-largest insurer with 733,000 enrollees, and Tufts Health Plan have also recently negotiated global payment contracts with their provider networks.
Dr. Dupee, who is chief of the geriatrics service at Tufts Medical Center, Boston, said that the AQC model can work only for physicians who are part of an ACO. "You have to have the data," he said, adding that without an electronic health record, it’s not easy to determine who’s due for a mammogram or whose hemoglobin A1C level is controlled.
The shift to global payment will likely hasten the demise of solo and small private practices, he said.
How Does It Work in Massachusetts?
Most Massachusetts residents now have some kind of health insurance. As of the end of 2010 (the latest figures available), 411,000 residents had gained coverage under the health care reform law, according to the commonwealth’s Division of Health Care Finance and Policy. About 5.4 million of the state’s 6.5 million residents were covered.
Plans are chosen through the health insurance exchange, called the Commonwealth Health Insurance Connector. Those plans include the following:
• Commonwealth Care. Open to anyone with an income of up to 300% of the federal poverty line. The state subsidizes their coverage and pays for coverage for those with incomes up to 150% of the poverty line.
• Commonwealth Choice. Plans – rated bronze, silver, or gold – must meet certain coverage and cost standards.
• Mass Health. This is the state Medicaid plan, which covers children in families up to 300% of the poverty level.
As is the case in the U.S. Affordable Care Act, there are disincentives for residents and employers to go without health coverage. Employers with 11 or more workers must either cover their workers or pay the state a contribution of up to $295 per year per worker.
Adults with incomes greater than 150% of the poverty level must either buy insurance or pay a penalty. In 2011, penalties ranged from $19 to $101 a month.
As more residents gain coverage, the number paying the penalty has decreased: In 2008, 45,000 paid; in 2010, 44,000 were assessed a penalty.
Can the Workforce Keep Up?
Many private practice physicians – especially those in primary care – are also struggling to meet demand.
Dr. Bigby, the state HHS secretary, said that fears about a primary care shortage had not been realized. Within a year of the reform’s being enacted, the state’s community health system had increased physician and nurse practitioner appointments by 50,000 visits, she said. But Dr. Gravel and Dr. Dupee said there was a continued shortage of primary care doctors, and that there were gaps in access. Hospitals have not increased the number of training slots over the last 6 years, they said.
"The hospitals have been slow to transform their training to primary care because the basic incentives have been to produce specialists," said Dr. Gravel, director for the Lawrence (Mass.) Family Medicine Residency program.
Primary care residents generate less clinical revenue, and cost more to train, said Dr. Gravel. The Affordable Care Act made it possible for his program to expand from 8 residents to 10. But state funds for family medicine training were reduced 3 years ago.
When residents finish training, they are not as interested in private practice, said Dr. Dupee. Instead, they go to work for hospitals or community clinics, where they have a guaranteed salary and less administrative hassle.
There are no clinics in many areas of the state, such as between Boston and Worcester, or between Worcester and Springfield, said Dr. Dupee. "Rural areas are underserved and will continue to be until something is done about it," he said.
Both he and Dr. Gravel also said that they believe many primary care physicians in their 50s will be retiring sooner rather than later, driven out by the shift out of fee for service.
Dr. Kuchnir agreed that private practices were threatened, mostly by the lower reimbursement offered by state plans. It’s not a question of having enough physicians to meet the demand for care, but whether the compensation is enough for practices to survive, he said.
He and the other physicians agreed, however, that it was a good thing that most state residents could now get insurance, because they can now also get needed care.
And unlike other states, the doctor is not "left holding the bag when patients can’t get what they need," said Dr. Gravel.
Six years into Massachusetts’ ambitious effort to overhaul its health system, there are fewer uninsured residents but costs continue to rise. Physicians say that cost containment will be a major challenge going forward – and likely will hit them hard.
Signed into law in 2006 by then-Gov. Mitt Romney, the health reform program, called "An Act Providing Access to Affordable, Quality, Accountable Health Care," essentially requires all state residents to acquire health insurance. The state Medicaid program was expanded to cover those at higher income levels, and a health insurance exchange was created to offer private insurance to all others. The state completely covers plans for residents with incomes below 150% of the federal poverty level and subsidizes others up to 300% of the poverty level.
Those who do not buy insurance are charged a penalty on their state tax return, based on income.
The success or failure of the plan is being closely watched, as it is widely considered the model for the federal Affordable Care Act.
Now, almost 98% of adults and close to 100% of children in Massachusetts have health insurance, Dr. JudyAnn Bigby, health and human services secretary for the commonwealth, said at a recent presentation in Washington.
With better and more regular access to care, more residents are receiving preventive services.
"Our rates of screening for colon cancer, cervical cancer, [and] prostate cancer have all gone up significantly," Dr. Bigby said, adding that "we also know people are getting better care for diabetes." Emergency department visits for nonurgent conditions also have declined, especially for patients with asthma and chronic obstructive pulmonary disease.
Reform has been mostly well-received by both doctors and patients. A 2011 poll by the Harvard School of Public Health and the Boston Globe found that 63% of residents said they supported the law.
A 2009 poll of physicians found similar views. Of 2,125 respondents, 70% said they thought reform had been a good thing.
However, in spite of all the positives, 50% said that the medical practice environment had worsened since reform. The biggest complaint: the law‘s administrative burden.
Dr. Joseph W. Gravel Jr., president of the Massachusetts Academy of Family Physicians, agreed, adding that his practice employs a huge number of people just to do paperwork. It seems that "paperwork is used almost as a cost reduction strategy, it seems sometimes to a primary care doctor," he said in an interview.
Physicians in the Harvard survey also expressed concerns about rising costs, and were split on the law’s impact on access to primary care: Roughly a quarter said the law was hurting access, whereas the same number said it was helping.
The concept behind the reform law "was brilliant," because it increased insurance coverage and gave patients incentives to get preventive care, said Dr. Richard Dupee, governor of the Massachusetts chapter of the American College of Physicians. But at the same time, he said, the law "discincentivizes doctors from seeing patients because the reimbursement is so poor."
Dr. Louis Kuchnir, president of the Massachusetts Academy of Dermatology, said that although the law has increased the number of people with coverage, they do not have any better access to dermatology care.
"Very few dermatologists can afford to participate," he said in an interview. The reimbursement for Medicaid and the state-subsidized plan "is less than our overhead in many cases."
And with the law’s cost-containment requirements now on the books, things may get worse. Dr. Dupee said that "the handwriting is on the wall: Reimbursement is going to start going down across the board. Otherwise, there is no way to manage the cost of this thing."
Cost Containment Lags
No rigorous cost controls were included in the reform plan when implementation started. The intention was to get everyone covered first and then begin looking at the cost side of the equation.
A 2008 addition to the law began laying the groundwork for cost control by setting up several councils to study how best to rein in spending. The main work is in a 2011 proposal by Gov. Deval Patrick (D), which urged a shift from fee for service to global payment for state employees, Medicaid recipients, and enrollees in the Commonwealth Care program. Those groups account for about 25% of the state’s residents.
The law will also establish a new primary care residency program, supported by the state’s Department of Public Health, to increase the number of such physicians.
In addition, in June, Gov. Patrick signed into law a $32.5 billion budget for fiscal 2013 that mandates some $700 million in savings in health care.
Gov. Patrick estimated in a recent speech that the state spends $67 billion a year on health care and that it would account for 54% of the state’s budget in the fiscal year that ended June 30, with most of it going to the state’s Medicaid program, and to subsidies for Commonwealth Care.
Health costs have been and still are higher in Massachusetts than almost anywhere else in America. The average total medical expenditure in the commercial market was $414 per member per month in 2010, which was a 3% increase over 2009 expenditures, according to the commonwealth’s division of health care finance and policy. Not huge, but a growing burden.
The state’s Division of Health Care Finance and Policy said that premium increases slowed from 2008 to 2010, but still grew 7.5% in the commercial market. But that slowdown likely merely reflects cost shifting, said the agency, adding that employers are providing fewer benefits and charging higher copays. And that is potentially translating to reduced care, Dr. Kuchnir said.
State residents with private insurance "seem to be getting less and paying more, which is of course a negative for good medical care and for access," said Dr. Kuchnir.
Costs are partly being driven by an overreliance on tertiary medical centers, said Dr. Gravel. The majority of inpatient care is given at tertiary – not community – hospitals, he said.
Indeed, the state’s Division of Health Care Finance and Policy determined that inpatient hospital expenses grew 9% in 2010, more than any other spending category.
Transitioning From Fee for Service
Dr. Gravel also blamed the continued dominance of the fee-for-service system for continued rising costs.
Physician expenses grew only 2% in 2010, according to the Division of Health Care Finance and Policy. But expenses varied significantly, depending on location and size of the physician group, according to data collected by the agency.
Gov. Patrick has encouraged the development of ACOs (Accountable Care Organizations) and new payment models to address variation and to create higher quality, more-efficient care. One model that seems to be making a difference is the Alternative Quality Contract, developed by Blue Cross Blue Shield of Massachusetts. In 2009, BCBSMA struck global payment agreements under the AQC with seven organizations; four more joined in 2010, and in March, Boston Medical Center joined. At that time, the Blues said that two-thirds of the physicians in its in-state HMO network, who provided care to 76% of its members, were covered under an AQC. The contract is for 5 years and is similar to a patient-centered medical home, where patients are assigned primary care physicians.
The AQC physicians "now significantly outperform the rest of BCBSMA’s fee-for-service network on a comprehensive set of quality and outcome measures," said a Blues release.
A recent study in Health Affairs seemed to back that assertion (2012 July [doi:10.1377/hlthaff.2012.0327]). The biggest gains so far were in the second year of the contracts; the same was true for savings, which were 1.9% in the first year and 3.3% in the second year, when compared with nonparticipating physicians. The results suggest that global payments work to reduce costs, but that that providers needed time to adjust to the global budgeting, according to the study.
Harvard Pilgrim Health Care, the second-largest insurer with 733,000 enrollees, and Tufts Health Plan have also recently negotiated global payment contracts with their provider networks.
Dr. Dupee, who is chief of the geriatrics service at Tufts Medical Center, Boston, said that the AQC model can work only for physicians who are part of an ACO. "You have to have the data," he said, adding that without an electronic health record, it’s not easy to determine who’s due for a mammogram or whose hemoglobin A1C level is controlled.
The shift to global payment will likely hasten the demise of solo and small private practices, he said.
How Does It Work in Massachusetts?
Most Massachusetts residents now have some kind of health insurance. As of the end of 2010 (the latest figures available), 411,000 residents had gained coverage under the health care reform law, according to the commonwealth’s Division of Health Care Finance and Policy. About 5.4 million of the state’s 6.5 million residents were covered.
Plans are chosen through the health insurance exchange, called the Commonwealth Health Insurance Connector. Those plans include the following:
• Commonwealth Care. Open to anyone with an income of up to 300% of the federal poverty line. The state subsidizes their coverage and pays for coverage for those with incomes up to 150% of the poverty line.
• Commonwealth Choice. Plans – rated bronze, silver, or gold – must meet certain coverage and cost standards.
• Mass Health. This is the state Medicaid plan, which covers children in families up to 300% of the poverty level.
As is the case in the U.S. Affordable Care Act, there are disincentives for residents and employers to go without health coverage. Employers with 11 or more workers must either cover their workers or pay the state a contribution of up to $295 per year per worker.
Adults with incomes greater than 150% of the poverty level must either buy insurance or pay a penalty. In 2011, penalties ranged from $19 to $101 a month.
As more residents gain coverage, the number paying the penalty has decreased: In 2008, 45,000 paid; in 2010, 44,000 were assessed a penalty.
Can the Workforce Keep Up?
Many private practice physicians – especially those in primary care – are also struggling to meet demand.
Dr. Bigby, the state HHS secretary, said that fears about a primary care shortage had not been realized. Within a year of the reform’s being enacted, the state’s community health system had increased physician and nurse practitioner appointments by 50,000 visits, she said. But Dr. Gravel and Dr. Dupee said there was a continued shortage of primary care doctors, and that there were gaps in access. Hospitals have not increased the number of training slots over the last 6 years, they said.
"The hospitals have been slow to transform their training to primary care because the basic incentives have been to produce specialists," said Dr. Gravel, director for the Lawrence (Mass.) Family Medicine Residency program.
Primary care residents generate less clinical revenue, and cost more to train, said Dr. Gravel. The Affordable Care Act made it possible for his program to expand from 8 residents to 10. But state funds for family medicine training were reduced 3 years ago.
When residents finish training, they are not as interested in private practice, said Dr. Dupee. Instead, they go to work for hospitals or community clinics, where they have a guaranteed salary and less administrative hassle.
There are no clinics in many areas of the state, such as between Boston and Worcester, or between Worcester and Springfield, said Dr. Dupee. "Rural areas are underserved and will continue to be until something is done about it," he said.
Both he and Dr. Gravel also said that they believe many primary care physicians in their 50s will be retiring sooner rather than later, driven out by the shift out of fee for service.
Dr. Kuchnir agreed that private practices were threatened, mostly by the lower reimbursement offered by state plans. It’s not a question of having enough physicians to meet the demand for care, but whether the compensation is enough for practices to survive, he said.
He and the other physicians agreed, however, that it was a good thing that most state residents could now get insurance, because they can now also get needed care.
And unlike other states, the doctor is not "left holding the bag when patients can’t get what they need," said Dr. Gravel.
Six years into Massachusetts’ ambitious effort to overhaul its health system, there are fewer uninsured residents but costs continue to rise. Physicians say that cost containment will be a major challenge going forward – and likely will hit them hard.
Signed into law in 2006 by then-Gov. Mitt Romney, the health reform program, called "An Act Providing Access to Affordable, Quality, Accountable Health Care," essentially requires all state residents to acquire health insurance. The state Medicaid program was expanded to cover those at higher income levels, and a health insurance exchange was created to offer private insurance to all others. The state completely covers plans for residents with incomes below 150% of the federal poverty level and subsidizes others up to 300% of the poverty level.
Those who do not buy insurance are charged a penalty on their state tax return, based on income.
The success or failure of the plan is being closely watched, as it is widely considered the model for the federal Affordable Care Act.
Now, almost 98% of adults and close to 100% of children in Massachusetts have health insurance, Dr. JudyAnn Bigby, health and human services secretary for the commonwealth, said at a recent presentation in Washington.
With better and more regular access to care, more residents are receiving preventive services.
"Our rates of screening for colon cancer, cervical cancer, [and] prostate cancer have all gone up significantly," Dr. Bigby said, adding that "we also know people are getting better care for diabetes." Emergency department visits for nonurgent conditions also have declined, especially for patients with asthma and chronic obstructive pulmonary disease.
Reform has been mostly well-received by both doctors and patients. A 2011 poll by the Harvard School of Public Health and the Boston Globe found that 63% of residents said they supported the law.
A 2009 poll of physicians found similar views. Of 2,125 respondents, 70% said they thought reform had been a good thing.
However, in spite of all the positives, 50% said that the medical practice environment had worsened since reform. The biggest complaint: the law‘s administrative burden.
Dr. Joseph W. Gravel Jr., president of the Massachusetts Academy of Family Physicians, agreed, adding that his practice employs a huge number of people just to do paperwork. It seems that "paperwork is used almost as a cost reduction strategy, it seems sometimes to a primary care doctor," he said in an interview.
Physicians in the Harvard survey also expressed concerns about rising costs, and were split on the law’s impact on access to primary care: Roughly a quarter said the law was hurting access, whereas the same number said it was helping.
The concept behind the reform law "was brilliant," because it increased insurance coverage and gave patients incentives to get preventive care, said Dr. Richard Dupee, governor of the Massachusetts chapter of the American College of Physicians. But at the same time, he said, the law "discincentivizes doctors from seeing patients because the reimbursement is so poor."
Dr. Louis Kuchnir, president of the Massachusetts Academy of Dermatology, said that although the law has increased the number of people with coverage, they do not have any better access to dermatology care.
"Very few dermatologists can afford to participate," he said in an interview. The reimbursement for Medicaid and the state-subsidized plan "is less than our overhead in many cases."
And with the law’s cost-containment requirements now on the books, things may get worse. Dr. Dupee said that "the handwriting is on the wall: Reimbursement is going to start going down across the board. Otherwise, there is no way to manage the cost of this thing."
Cost Containment Lags
No rigorous cost controls were included in the reform plan when implementation started. The intention was to get everyone covered first and then begin looking at the cost side of the equation.
A 2008 addition to the law began laying the groundwork for cost control by setting up several councils to study how best to rein in spending. The main work is in a 2011 proposal by Gov. Deval Patrick (D), which urged a shift from fee for service to global payment for state employees, Medicaid recipients, and enrollees in the Commonwealth Care program. Those groups account for about 25% of the state’s residents.
The law will also establish a new primary care residency program, supported by the state’s Department of Public Health, to increase the number of such physicians.
In addition, in June, Gov. Patrick signed into law a $32.5 billion budget for fiscal 2013 that mandates some $700 million in savings in health care.
Gov. Patrick estimated in a recent speech that the state spends $67 billion a year on health care and that it would account for 54% of the state’s budget in the fiscal year that ended June 30, with most of it going to the state’s Medicaid program, and to subsidies for Commonwealth Care.
Health costs have been and still are higher in Massachusetts than almost anywhere else in America. The average total medical expenditure in the commercial market was $414 per member per month in 2010, which was a 3% increase over 2009 expenditures, according to the commonwealth’s division of health care finance and policy. Not huge, but a growing burden.
The state’s Division of Health Care Finance and Policy said that premium increases slowed from 2008 to 2010, but still grew 7.5% in the commercial market. But that slowdown likely merely reflects cost shifting, said the agency, adding that employers are providing fewer benefits and charging higher copays. And that is potentially translating to reduced care, Dr. Kuchnir said.
State residents with private insurance "seem to be getting less and paying more, which is of course a negative for good medical care and for access," said Dr. Kuchnir.
Costs are partly being driven by an overreliance on tertiary medical centers, said Dr. Gravel. The majority of inpatient care is given at tertiary – not community – hospitals, he said.
Indeed, the state’s Division of Health Care Finance and Policy determined that inpatient hospital expenses grew 9% in 2010, more than any other spending category.
Transitioning From Fee for Service
Dr. Gravel also blamed the continued dominance of the fee-for-service system for continued rising costs.
Physician expenses grew only 2% in 2010, according to the Division of Health Care Finance and Policy. But expenses varied significantly, depending on location and size of the physician group, according to data collected by the agency.
Gov. Patrick has encouraged the development of ACOs (Accountable Care Organizations) and new payment models to address variation and to create higher quality, more-efficient care. One model that seems to be making a difference is the Alternative Quality Contract, developed by Blue Cross Blue Shield of Massachusetts. In 2009, BCBSMA struck global payment agreements under the AQC with seven organizations; four more joined in 2010, and in March, Boston Medical Center joined. At that time, the Blues said that two-thirds of the physicians in its in-state HMO network, who provided care to 76% of its members, were covered under an AQC. The contract is for 5 years and is similar to a patient-centered medical home, where patients are assigned primary care physicians.
The AQC physicians "now significantly outperform the rest of BCBSMA’s fee-for-service network on a comprehensive set of quality and outcome measures," said a Blues release.
A recent study in Health Affairs seemed to back that assertion (2012 July [doi:10.1377/hlthaff.2012.0327]). The biggest gains so far were in the second year of the contracts; the same was true for savings, which were 1.9% in the first year and 3.3% in the second year, when compared with nonparticipating physicians. The results suggest that global payments work to reduce costs, but that that providers needed time to adjust to the global budgeting, according to the study.
Harvard Pilgrim Health Care, the second-largest insurer with 733,000 enrollees, and Tufts Health Plan have also recently negotiated global payment contracts with their provider networks.
Dr. Dupee, who is chief of the geriatrics service at Tufts Medical Center, Boston, said that the AQC model can work only for physicians who are part of an ACO. "You have to have the data," he said, adding that without an electronic health record, it’s not easy to determine who’s due for a mammogram or whose hemoglobin A1C level is controlled.
The shift to global payment will likely hasten the demise of solo and small private practices, he said.
How Does It Work in Massachusetts?
Most Massachusetts residents now have some kind of health insurance. As of the end of 2010 (the latest figures available), 411,000 residents had gained coverage under the health care reform law, according to the commonwealth’s Division of Health Care Finance and Policy. About 5.4 million of the state’s 6.5 million residents were covered.
Plans are chosen through the health insurance exchange, called the Commonwealth Health Insurance Connector. Those plans include the following:
• Commonwealth Care. Open to anyone with an income of up to 300% of the federal poverty line. The state subsidizes their coverage and pays for coverage for those with incomes up to 150% of the poverty line.
• Commonwealth Choice. Plans – rated bronze, silver, or gold – must meet certain coverage and cost standards.
• Mass Health. This is the state Medicaid plan, which covers children in families up to 300% of the poverty level.
As is the case in the U.S. Affordable Care Act, there are disincentives for residents and employers to go without health coverage. Employers with 11 or more workers must either cover their workers or pay the state a contribution of up to $295 per year per worker.
Adults with incomes greater than 150% of the poverty level must either buy insurance or pay a penalty. In 2011, penalties ranged from $19 to $101 a month.
As more residents gain coverage, the number paying the penalty has decreased: In 2008, 45,000 paid; in 2010, 44,000 were assessed a penalty.
Can the Workforce Keep Up?
Many private practice physicians – especially those in primary care – are also struggling to meet demand.
Dr. Bigby, the state HHS secretary, said that fears about a primary care shortage had not been realized. Within a year of the reform’s being enacted, the state’s community health system had increased physician and nurse practitioner appointments by 50,000 visits, she said. But Dr. Gravel and Dr. Dupee said there was a continued shortage of primary care doctors, and that there were gaps in access. Hospitals have not increased the number of training slots over the last 6 years, they said.
"The hospitals have been slow to transform their training to primary care because the basic incentives have been to produce specialists," said Dr. Gravel, director for the Lawrence (Mass.) Family Medicine Residency program.
Primary care residents generate less clinical revenue, and cost more to train, said Dr. Gravel. The Affordable Care Act made it possible for his program to expand from 8 residents to 10. But state funds for family medicine training were reduced 3 years ago.
When residents finish training, they are not as interested in private practice, said Dr. Dupee. Instead, they go to work for hospitals or community clinics, where they have a guaranteed salary and less administrative hassle.
There are no clinics in many areas of the state, such as between Boston and Worcester, or between Worcester and Springfield, said Dr. Dupee. "Rural areas are underserved and will continue to be until something is done about it," he said.
Both he and Dr. Gravel also said that they believe many primary care physicians in their 50s will be retiring sooner rather than later, driven out by the shift out of fee for service.
Dr. Kuchnir agreed that private practices were threatened, mostly by the lower reimbursement offered by state plans. It’s not a question of having enough physicians to meet the demand for care, but whether the compensation is enough for practices to survive, he said.
He and the other physicians agreed, however, that it was a good thing that most state residents could now get insurance, because they can now also get needed care.
And unlike other states, the doctor is not "left holding the bag when patients can’t get what they need," said Dr. Gravel.
