Dreyfus makes case for global payments

The president of Blue Cross Blue Shield of Massachusetts made the case for global health payments last night during a discussion sponsored by CommonWealth magazine at Suffolk University’s Modern Theatre, but other members of the panel were cautious about its prospects.

Blue Cross is running a global payment experiment in Massachusetts where health providers integrate their services and are paid a negotiated lump-sum fee per patient rather than a fee for each service they provide.

Andrew Dreyfus, the president and CEO of Blue Cross, said doctors, patients, and hospitals are embracing the approach. He said the goal is to improve care while cutting in half the rate of growth in health care costs over the next five years. He said the emphasis on quality, cost-effective care is working, noting he has received calls from hospital executives saying: “Is it OK with you if we lower our prices?”

Charlie Baker, the Republican gubernatorial candidate last year and a former health insurance plan executive, was the panel’s moderator. He said he had heard the basic pitch for global payments many times over the last 15 to 20 years, and worried that it could founder again if patients balk at efforts to steer them to less costly providers.

Baker said information is crucial in the effort to contain costs. He said prescription drug costs came down when information on the cost and quality of generic versus brand-name drugs was made available and tiered pricing was introduced. He said similar information for health services is not available.

But Dreyfus said that type of standardized information may be coming. He said Blue Cross is developing a smart phone application that would send members who need a MRI a list of all the nearby free-standing facilities offering MRIs along with pricing and copayment information for each facility. He noted MRIs typically cost $500 at free-standing facilities and $1,500 at hospitals.

“We have to challenge more is better,” Dreyfus said. “More is not better. Better is better.”

Baker also asked how an integrated health care organization, consisting of doctors, hospitals, and other providers, would divvy up the global payments they receive. Ellen Zane, the president and CEO of Tufts Medical Center, said that task won’t be easy. She said it will take great leadership.

JudyAnn Bigby, the state’s secretary of health and human services, outlined the governor’s bill that would shift public health programs toward a global payment model and nudge the rest of the health care industry in the same direction. The bill also includes malpractice provisions that would allow doctors to apologize for medical errors without legal consequence and mandate six months of negotiations between doctor and patient before any malpractice claim is filed. Similar efforts in Michigan, reported last summer in CommonWealth, have helped reduce claims there.

House Majority Leader Ronald Mariano of Quincy said there was a 70 percent chance health care legislation could pass late this year or next spring. Even if that happens, he said, it could all fall apart if consumers start complaining.

Mariano was more skeptical about passage of the malpractice legislation. “The bar association sees this as a significant attack on the way they get cases,” he said.