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Mass. health organizations pledge to change payment model

The movement to transform the way medical care is paid for — by rewarding the quality of care over the quantity — received a big push Wednesday from a national coalition of health organizations, including three major players in Massachusetts.

The newly formed Health Care Transformation Task Force encompasses nearly two dozen providers and insurers. It includes Massachusetts’ largest health system, largest insurer, and largest independent doctors group: Partners HealthCare, Blue Cross Blue Shield of Massachusetts, and Atrius Health.

“The significance of this group for us is seeing payment reform begin to really gain momentum,” said Dana Gelb Safran, senior vice president of performance measurement and improvement at Blue Cross. “It can really put wind in the sails of payment reform.”


Traditionally, providers have been paid under a fee-for-service model, in which they are reimbursed for each patient they see and procedure they perform. The model encourages providers to do as many procedures as they can, without necessarily considering the quality of care.

Newer payment models, known as “value-based” arrangements, reward providers for keeping patients healthy and out of hospital beds, aiming to control costs by cutting unnecessary procedures. Contracts like this usually give providers a set budget to care for a group of patients. Providers can be penalized when they exceed that amount or rewarded when they come in under budget.

The members of the new task force have set a goal of putting 75 percent of their businesses into such value-based contracts by 2020.

Blue Cross developed Massachusetts’ first quality-based payment plan in 2008. The plan now covers roughly half of Blue Cross’s commercially insured members and has helped lower the rate of spending growth while improving quality, according to studies.

Data show that in Massachusetts, 34 percent of members with commercial insurance were enrolled in alternative payment models in 2013. Many patients on Medicare, the federal government program for seniors, also are covered under new payment programs known as Accountable Care Organizations, which provide incentives for keeping patients healthy.


Federal officials said this week that Medicare will shift half of its payments to new models by 2018.

“The health care industry has gotten the memo,” said Dan Mendelson, chief executive of the Avalere Health, a Washington consulting firm. “There’s an urgency to improve quality and reduce costs.”

Atrius Health already has a history of using quality-based payment models. Atrius now gets 75 percent of its revenue from such contracts — already meeting the goal set by the new task force.

“We would like to have even more of our patients in that kind of model,” said Emily Brower, executive director of accountable care programs for Atrius Health.

At Partners, a network of 10 hospitals and 6,000 doctors, about half of primary care patients are in value-based contracts.

Partners’ senior vice president of population health management, Dr. Timothy Ferris, said the task force will help set the tone for the future of the health care industry.

“It is really difficult to plan for the future when there’s uncertainty about what the future will bring,” Ferris said. “The importance of this task force is to say we are committed to this path.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.