Lawmakers hope accountable care organizations control healthcare spending

Massachusetts lawmakers are attempting to change how doctors and hospitals are paid, aiming to hand the Legislature a specific proposal by Jan. 1 and end months of disagreement over how to control healthcare spending, the Boston Globe reports.

A panel of state officials and healthcare executives drafted a first-in-the-nation blueprint for scrapping current fee-for-service payments. The new system, called global payments, would require doctors, hospitals and other providers to band together into accountable care organizations (ACOs) that would split the payments and better coordinate patient care, thereby improving quality. These provider groups generally would get a flat per-patient fee, along with incentives for high-quality care, which hopefully eliminate unnecessary tests and procedures and encourage greater focus on preventive care.

However, the Massachusetts health panel still must agree on a number of contentious issues, such as how much power state regulators will have over the prices paid to providers, the rules for forming ACOs, and whether providers--many of whom profit from the fee-for-service system--will have seats on the board that eventually oversees the potential dismantling of that system, the Globe reports.

One example of an ACO is the Alternative Quality Contract created by Blue Cross Blue Shield of Massachusetts, which the Becker's Hospital Review calls one of the most advanced versions yet. April Greene, director of payment reform at Massachusetts Blue Cross, said benefits include allowing both physicians and hospitals to join, granting contracts with providers for five years, creating a collegial relationship rather than the traditional managed care contracting, giving providers freedom to create their own approaches to improve quality and reduce costs and offering providers data on utilization of services and referral patterns so they can gain insight into their performance.

Despite successes thus far of both Blue Cross and the Massachusetts legislature to implement ACOs, the nation as a whole likely isn't ready for such a payment revolution. "The current payment system is so profitable for most medical providers that they are not inclined to change it," notes Kaiser Health News. "National conversion to such a system would require a major change in the attitude of providers and in the political climate."

To learn more:
- read the Boston Globe article
- read the Becker's Hospital Review story
- read the Kaiser Health News story

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