Blue Cross And Blue Shield Of Massachusetts Proposes Changes To Health Care Provider Payment System

Main Category: Health Insurance / Medical Insurance
Also Included In: Primary Care / General Practice
Article Date: 24 Jan 2008 - 5:00 PDT

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Blue Cross and Blue Shield of Massachusetts has proposed paying health care providers a flat fee each year for every patient, rather than paying for each patient visit or treatment, in an attempt to slow health care spending growth, the Boston Globe reports. The fee would be adjusted for age and illness, and it would include bonuses of up to 10% for physicians who meet quality-of-care standards, according to BCBS officials. In most cases, the new payment system would cover all services from primary care physicians, specialists, counselors and hospitals, which would require more care coordination among providers, the Globe reports.

According to the Globe, the "most significant savings and changes" might involve patients with chronic conditions. Under the BCBS plan, a nurse might check in with patients to provide continuity of care and ensure patients understand how to manage their diseases, such as by making sure patients take their medications. Savings from fewer hospitalizations would go to health care providers, to pay for home visits or for bonuses, and eventually could lead to slower health care spending growth, BCBS officials said. The insurer said the new system could lead to quicker access to physicians by phone, e-mail or same-day appointments; home visits by nurses to people with chronic diseases; and smoother transitions between hospitals, rehabilitation centers and home, according to the Globe.

BCBS hopes that within two to four years, the new payment system will halve health care spending growth among providers who use the new system. Andrew Dreyfus, executive vice president for health care services at BCBS, said, "We're not looking to spend less than we do today, but we want spending to grow at a rate that's affordable," adding, "And we want to empower physicians and hospitals to provide the right care." Dreyfus said the insurer is finalizing contracts with two large doctor groups. BCBS is still determining how the new system could work for physicians in small practices and patients not enrolled in HMOs.

While some health policy experts praised the plan, some question whether the new system would restrict patient choice and encourage physicians to withhold care or make doctors responsible for costs beyond their control, the Globe reports. In addition, the BCBS payment plan has some similarities to the "capitation" payment system that led to problems in managed care in the 1990s. However, BCBS said that it has introduced safeguards to prevent undertreatment, underpayment and lack of patient choices that caused problems with the capitation payment system (Dembner, Boston Globe, 1/22).

American Public Media's "Marketplace" on Tuesday reported on the plan. The segment includes comments from Dreyfus and Merrill Goozner of the Center for Science in the Public Interest (Vanek-Smith, "Marketplace," American Public Media, 1/22). Audio and a transcript of the segment are available online.

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