The debate continues to rage on the impact of the Affordable Care Act and how it will impact cost, services and quality of care. The only model that we have to date on universal health coverage does not bode well for the health care system based upon the Massachusetts experiment. Despite achieving its goal of nearly 100% health insurance coverage, growth in health care spending has consistently exceeded economic growth in Massachusetts, even in the face of reduced national healthcare spending since the recession. Massachusetts now ranks among the highest spending states in the country and the spent $61 billion in 2009.
To respond to these rising costs, a bill has been introduced to move from fee for service to a global payment system for state employees and Medicaid enrollees and it encourages providers to create ACOs using a global payment or episode of care system as well. The bill also includes provisions for malpractice reform and gives the commissioner of insurance the authority to strike down increases in insurance premium based upon growth in the Massachusetts gross state product and the growth of total medical expenses in the providers' particular region.
CMS has also moved Medicare into global payment through its Pioneer ACO demonstration, including 5 large organizations in eastern Massachusetts, and private payers are also rolling out responsive payment reforms. Blue Cross Blue Shield of Mass launched the Alternative Quality Contract (AQC) based on global payments with shared savings and shared risk, as well as pay-for-performance incentives. Harvard Pilgrim Health Care and Tufts Health Plan have also started global payment contracts with their provider networks. It is estimated that these efforts will place more than 1 million commercial insurance enrollees in global payment arrangements.
It remains to be seen how these programs will impact the quality and cost of care, but also if there are unexpected consequences of these systems. What will be the impact on the labor market and broader economy, especially in states like Massachusetts where healthcare education and jobs are a main driver of its economy? What will be the impact to providers, medical devices and pharmaceutical sales, especially to the specialty driven care delivery systems that don't fit easily into this global payment model? How can you position your product to add value under these modalities?
Song, Z; Landon, B. "Controlling Health Care Spending - The Massachusetts Experiment" New England Journal of Medicine, 10,1056.NEJM p. 1201261, April 11, 2012.