Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Pilot project aimed at overuse of health care
This is an archived article that was published on sltrib.com in 2009, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Changing the way your doctors get paid may improve your health care -- and make it cheaper.

It's an idea the state plans to test in what may be one of the largest health care delivery and payment reform experiments in the country.

Since 1965, the year Medicare was created, the cost of health care has steadily increased. By 2018, the Centers for Medicare and Medicaid Services (CMS) predicts national health expenditures will reach $4.4 trillion, or about one-fifth of the country's gross domestic product (GDP.)

Part of the problem, experts believe, is the way doctors and hospitals get paid: The so-called fee-for-service model rewards volume, not quality. In the gray areas of medicine where best practice isn't well-defined, it can lead to wide -- and costly -- variations in care.

"If you pay for volume, you're probably going to get volume, and that's the way most of health care is paid for today," said Greg Poulson, senior vice president of Intermountain Healthcare.

A 2004 report by the Congressional Budget Office (CBO) shows that in Utah, the per capita cost of health care was $4,000; on the highest end, in Massachusetts, it was $6,700.

In trying to pinpoint why, the CBO analyzed a number of factors, including the price of health care and severity of illness. In the end, however, it chalked up the bulk of the difference to the overuse of health care in higher spending regions.

The overuse of health care in areas with more doctors and medical resources was part of the problem. So was doctor disagreement about which treatments are best, and the financial pressures and incentives that drive them to check off tests, procedures and exams on insurance forms -- even when such items may not be necessary.

"You get paid for everything you do," said Scott Barlow, chief executive of the Central Utah Clinic in Provo. "It doesn't really motivate you to find innovative new ways to do things differently that are more cost-effective."

Under the payment system now, doctors don't get compensated for encouraging a patient to wait it out a few days and see what happens, for example, or to try a few home remedies first, said Christie North, vice president for Utah programs at HealthInsight.

"Every provider, I think, has a moral compass that says, 'We want to do the right thing; we want to give our patients the best care possible,' " she said. "And yet giving that best care, there is no way to code it on the insurance sheets."

As part of its 10-year effort to reform the health system, the Legislature in 2009 passed House Bill 165, directing the Office of Consumer Health Services to get providers and payers together to devise health care delivery and payment reform plans. Out of that was born this demonstration, which will change the way doctors providing health care for two initial groups of patients -- diabetics and pregnant women -- get paid.

Doctors treating diabetics will be paid a monthly retainer fee, giving them the flexibility to innovate. If a patient would be better served by calling them at home to make sure they are taking their medications, or checking their blood glucose regularly, for example, doctors can do that without worrying about whether the insurance company is going to pay.

If a patient has problems -- say a diabetic ends up in the emergency room for a preventable complication -- the doctor's monthly retainer fee goes down.

Additionally, doctors will be paid a "mini" fee for service so they aren't discouraged from providing care.

This blended kind of payment is in part intended to avoid the problems posed by capitation in the 1990s, North said.

Under that model, insurers paid doctors and hospitals a "per-member-per-month" rate, regardless of the number or nature of services provided. Aimed at curbing overutilization, capitation swung the pendulum too far, prompting providers to under-treat patients to save costs and maximize profits.

Doctors caring for pregnant women will be paid differently. They'll continue to receive one large, bundled payment after the patient delivers, as they do now; the difference is they'll be paid the same whether it's a vaginal delivery or cesarean section. Doing so removes any incentive a doctor may have to perform a section, which costs more, but doesn't discourage it if it's necessary.

The savings, North said, will be returned to insurers, resulting in lower premiums for patients; providers, too, will get a portion.

"Quality care doesn't cost more," she said, "in fact, it should cost less because if we're doing the right thing at the right time, then people aren't getting into trouble and ending up in the emergency department."

Up to six provider groups, with as many as 100 doctors each, will participate in the pilot project; so will a number of the state's insurers, including Medicaid, SelectHealth, Altius, Regence BlueCross BlueShield and the Public Employees Health Program (PEHP), a self-funded trust managed by the Utah State Retirement Board.

"We have hospitals, we have doctors, we have insurance companies sitting at the table making decisions around how we drive these demonstration projects," North said. "We recognize up-front there is going to be a difference in how hospitals are paid for this and we know this is inevitable. But they recognize it makes more sense."

But the overuse of medicine can't be squarely placed on doctor's shoulders, said Gregory Craner, medical director of the Central Utah Clinic.

"One person's overutilization is another person's rationing, and it really depends on who you are," he said. "The majority of people feel there is overutilization of medical services, but only 16 percent thinks it applies to them."

Last weekend, Craner worked a shift at Utah Valley Regional Hospital.

"Nothing I wrote increased my personal income," he said. "Some of the stuff I wrote was legitimately necessary, and some of the stuff I wrote was because the patients would demand that."

Patients, he said, are too protected from the economic consequences of their decisions. If they only have to pay a $20 copay for a visit, whether it costs $100 or $300, it makes no difference to them.

It's an issue that subsequent generations of the pilot project will take aim at by rewarding cost-effective choices by consumers, and recognizing employers that actively engage workers in healthy behaviors and value-based health care choices.

North expects the pilot project will be in full swing early next year, after the Utah Department of Health has completed building its all-payer database of insurance claims filed in the state. The information will be used as a benchmark for the quality and cost of care being delivered under the experimental model.

lrosetta@sltrib.com" Target="_BLANK">lrosetta@sltrib.com

How will the payment reform experiment work?

Doctors seeing two initial groups of patients, diabetics and pregnant women, will be paid differently.

Doctors treating diabetics will be paid a monthly retainer fee, giving them the flexibility to innovate. Additionally, doctors will be paid a "mini" fee for service so they aren't discouraged from providing care.

If a patient has problems -- say a diabetic ends up in the emergency room for a preventable complication -- the doctor's monthly retainer fee goes down.

For the second group, pregnant women, doctors will continue to receive one large, bundled payment after their patient delivers, as they do now; the difference is they'll be paid the same whether it's a vaginal delivery or cesarean section. Doing so removes any incentive a doctor may have to perform a C-section, which costs more, but doesn't discourage it if it's necessary.

Economy » Allowing doctors to innovate could save money, improve outcomes.
Article Tools

 Print Friendly
Photos
 
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.