Baby Steps to Socialized Medicine

According to the New England Journal of Medicine - Proposals for a global payment system in Massachusetts and Accountable Care Organizations within Medicare may be first steps toward ending or limiting the scope of fee-for-service medicine. It is likely that an increasing number of health care organizations will voluntarily adopt global payment systems, and the Massachusetts report may well spur such efforts. It is too soon to say, however, whether a mandatory transition to global payments is ready for prime time
Since Massachusetts enacted reforms in 2006, the proportion of residents lacking health insurance has decreased to an estimated 2.6% — the lowest of any state. However, there are continuing concerns about quality and access, and health care costs per capita remain among the highest in the United States.( so much for universal coverage reducing cost) A special commission has therefore proposed that Massachusetts effectively end fee-for-service medicine, and replace it with a system of global payments that combines the approaches of risk-adjusted capitation and pay for performance with a strong focus on primary care.
The Massachusetts commission recommended that within 5 years “global payments with adjustments to reward provision of accessible and high quality care become the predominant form of payment to providers.” The use of such payments would be linked to the formation of “accountable care organizations” (ACOs). It also recommended that government, payers, and providers “share responsibility” for the transition by providing the necessary infrastructure and legal and technical support. Although a new independent state board would guide the transition and formulate the methods for determining payment amounts, the board would not have the authority to set the payments. The “market . . . consistent with the methodology established by the oversight entity” would determine the amounts.The recommendations apply to all payers (including the state and federal governments). They resemble recent proposals for reforming Medicare through the formation of ACOs as well as pilot programs that are being considered for inclusion in national health care reform. According to the Massachusetts commission, ACOs would be “composed of hospitals, physicians and/or other clinician and non-clinician providers working as a team” and would “accept responsibility for all or most of the care that enrollees need.” They could be incorporated entities or merely contractual networks. The changes, however, could not take place without new legislation and a waiver of current federal payment rules. And there is no certainty that the desired improvements in care, cost savings, and patient satisfaction would actually materialize.