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AARP AARP States Advocacy

Improving Health Care Quality While Taking a Scalpel to Costs

Massachusetts has the best health insurance coverage in the nation but at what cost?

by: Rochelle Sharpe

• Medical costs in Massachusetts are 25 percent higher than the national average.
• State lawmakers are considering new ways to pay doctors and hospitals.
• Get involved in the debate by contacting AARP Massachusetts.

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To get involved in the discussion or share your story, e-mail or call toll-free 1-866-448-3621.

Massachusetts may have stellar hospitals and the nation’s best health insurance coverage, but it also has the dubious distinction of the highest health care costs in the world.

While the United States pays more for medical care per person than any other country, Massachusetts residents pay 25 percent more than the national average: $11,100 per person projected for 2009. Insurance premiums are rising faster than the cost of living, and quality of care seems curiously unrelated to prices.

“The current system is unsustainable” and is a disservice to patients, said Brian Rosman, research director of Health Care for All, a consumer advocacy group.

State lawmakers are considering a radical plan to control costs by completely revamping the way doctors and hospitals get paid. Rather than paying providers for every service they perform, the lawmakers may devise a plan that gives doctors a fixed fee for taking care of each patient for an entire year. Such global payments were recommended by a state commission last year. It has been used on a trial basis in some communities but never on a statewide scale.

As lawmakers debate what to do, consumer groups are working to ensure that any new system will not only cut medical expenses, but also improve patient care. The Massachusetts Campaign for Better Care wants reforms that promote primary and preventive care, ensure that people understand what they’re paying for, and encourage medical providers to collaborate—from primary care to acute care and long-term care.

“If payment reform only results in lower costs and doesn’t result in improved quality, then it will be a failure,” said Deborah Banda, state director for AARP Massachusetts, which is part of the coalition.

Georgia Maheras, Massachusetts Campaign for Better Care coordinator, said ditching the fee-for-services system would result in better patient care. “We want to make sure providers are paid to keep people well, rather than just patch them up when they are sick,” she said.

Maheras said the existing health care system operates behind closed doors that hide pricing information from patients. “I can go to the grocery store and get more information about toilet paper,” she said.

The Massachusetts attorney general released a study in January concluding that high costs are unrelated to quality of care or the number of medical tests and procedures. Insurance companies pay some of the state’s famous hospitals twice as much as other institutions for identical procedures. The study warned out-of-control bills could threaten the state’s landmark health care reforms, which expanded health insurance to 97 percent of the population.

“Rapidly escalating costs run the risk of forcing residents to choose between basic necessities or basic care,” said Sen. Richard T. Moore, D-Uxbridge, who served on the payment reform commission. “People deserve to keep their health and much of their wealth … and neither should be sacrificed for those seeking exorbitant profits.”

With a global payment system, doctors could possibly receive bonuses for getting patients more involved in their own care, perhaps by watching videos about their chronic diseases or upcoming operations, Maheras said.

Similarly, doctors could be financially rewarded for preventive care, earning incentives for keeping patients out of the hospital or being penalized for preventable hospital readmissions. Currently, Massachusetts has the nation’s 13th worst rate of readmitting Medicare patients to hospitals within 30 days.

Coordinating care among doctors should be financially rewarded, advocates say, since it can reduce duplication of services and ensure that all medical personnel involved know about a patient’s care. Computerizing medical records is key.

“Sometimes, primary care doctors don’t even know if their patients are in the hospital,” Maheras said.

Rochelle Sharpe is a Pulitzer Prize-winning freelance writer based in Brookline, Mass.

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