The Podium

Payment reform is working in Massachusetts

When it comes to health reform, many in our state are on a mission to demonstrate that it is possible to achieve both near-universal coverage and affordable high quality care.

While the rest of the nation holds its collective breath as it awaits the Supreme Court’s decision on national health reform, Massachusetts is moving forward aggressively into the next phase.

Maybe it’s because we took the first steps early — in 2006 — and we have known for those six years that we would have to tackle the cost of health care eventually. Two rounds of legislation that received far less attention than “RomneyCare” prompted greater transparency about the cost of care in our state and developed a vision of moving away from fee-for-service payment to alternative payment methods.


With a real understanding of the challenges we face, Massachusetts health care organizations large and small have begun to take real action to find new ways to deliver better coordinated care while working hard to hold costs in check.

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We may not all be of the same mind about how to get there, but there are a number of models being explored to truly provide more coordinated care while reducing costs. Both providers and insurers are taking hard steps toward the goal of bringing costs to a more manageable and realistic level, where they don’t threaten to devour our state budget, leaving little money for other priorities like education or rebuilding much-needed infrastructure.

We’re not there yet but we’ve known for some time that by reducing waste and improving quality and weaning ourselves from the fee-for-service payment system, there was the possibility of providing better care at a lower cost. Attorney General Martha Coakley in fact, summed it up in her report last year on health care costs: “To control cost growth, we must shift how we purchase health care to align payments with ‘value,’ measured by those factors the health care market should reward, such as better quality.”

Blue Cross Blue Shield of Massachusetts was a real leader with its Alternative Quality Contract (AQC) which clearly links financial incentives for providers with their quality improvement and ability to manage costs. Atrius Health was among the first to sign on and we have utilized the framework of the AQC during the past three years to lead tangible change in our organization. Other Massachusetts insurers, including Tufts Health Plan and Harvard Pilgrim Health Care, are moving a large percentage of their providers into payment plans with responsibility for quality and cost. According to The Boston Globe, approximately 1.2 million people are covered by plans that reward value over volume. Massachusetts family premiums were the highest nationally in 2009, but had dropped to 9th highest in the nation in 2010.

Our work has not gone unnoticed at a national level. The Affordable Care Act created the first legislatively mandated Accountable Care Organization (ACO), the Medicare Shared Savings Plan, and also funded the Center for Medicare and Medicaid Innovation to create the Pioneer ACO Program. These ACO programs bear a great deal of resemblance to the AQC, but for Medicare recipients. Not surprisingly, of the 32 Pioneers nationally, five (including Atrius Health) are from Massachusetts. The Pioneers will show the nation what can be done with a concerted effort to create systems of coordinated high-quality care.


Governor Patrick wants us to move even faster. He delivered his draft legislation on payment reform in February 2011. Now, the Legislature is about release its proposed bill. What we really need from the Legislature now is the support to move forward with speed to implement changes so that patients and employers can begin to see a difference both in the care that is delivered and in the invoice that follows.

The work that was set in motion in Massachusetts in 2006 and that laid the groundwork for critical parts of the Affordable Care Act will continue, regardless of what the Supreme Court decides. We know that we are the ones who will have to live with the consequences if we don’t make these changes, and we don’t like the picture of a future of rapidly increasing healthcare costs strangling the way of life that we value.

State and federal legislation can play a critical part in defining the future, but regardless, the wheels have been set in motion. Massachusetts created the picture of what universal coverage could look like. Soon we will show the nation what it looks like to deliver the highest quality of care at an affordable price.

Dr. Gene Lindsey is president and CEO of Atrius Health.