Rick Holmes: You get what insurers pay for

Rick Holmes

I had to visit the pediatrician's office last month in peak flu season and felt like holding my breath from the moment I opened the door. Not that it wasn't clean. There were hand sanitizers everywhere you looked, and face masks for all who wanted them. It's just that keeping out of doctors' offices is one way to keep from getting sick.

It made me appreciate how often the folks at Southboro Medical Center are willing to consult on the phone rather than requiring an office visit. I've also appreciated how often its physicians trust nurse practitioners and other professionals without an M.D. after their names to deliver services patients need.

That's not always the case. In many practices, every service requires face time with your doctor, even if it's only for a minute. The things that have improved productivity in nearly every other field, like networked electronic record-keeping, telephone consultations and e-mail communications, are, at best, under-utilized. We patients pay the price, through insurance premiums that go up by at least 10 percent a year and higher taxes for government health care programs.

There's a reason for this, and it's one that hasn't gotten nearly enough attention in Washington's great debate over health care reform.

In health care, you get what you pay for; more precisely, you get what your insurance company pays for.

In traditional fee-for-service payment systems, a physician can't bill the insurance company for a phone conversation with a patient, or an e-mail exchange, no matter how successfully they solve a problem. Insurance companies will pay a specialist for taking a new X-ray, even if an X-ray of the same joint is sitting in a file back at your general practitioner's office.

Under the fee-for-service system, which accounts for 80 percent of the Massachusetts market, the physician or his practice is paid based on number of patients seen in person. That puts an incentive on as many face-to-face visits as the doctor can cram into a day - which doesn't make for healthy patients or satisfied physicians.

My physician, though, is paid a salary, not a commission on every patient seen. That's a comfort to a skeptic like me, who worries whenever a doctor recommends a test or a specialist that someone is making money on the deal.

Southboro Medical Center is part of the Atrius Health network (other Atrius affiliates include South Shore Medical Center, Dedham Medical Associates, Harvard Vanguard Medical Associates and Granite Medical). Atrius is working on replacing fee-for-service with "global payments" that change the incentives for health care providers, rewarding quality of care, not quantity of services delivered.

As Dr. Richard Lopez, chief physician executive for Atrius, explained in a recent visit, under a global payment system, insurers pay providers like Atrius a carefully-calculated amount per patient per month. Keep that patient healthy and the bottom line tilts in the providers' favor. But if the patient has to return over and over to the provider because the treatment isn't working, it's the provider that pays more, not the insurer.

Some theoretical case studies provided by Atrius illustrate the difference. In one, a busy middle-aged executive, Mr. Johnson, is told by his primary care physician he has high cholesterol and hypertension. Under a fee-for-service scenario, the physician, Dr. Jones, gives him medication for hypertension and tells him to lose some weight and get more exercise. He has some blood work done and gets a letter two weeks later with the results.

Weeks later, Mr. Johnson has some symptoms that indicate a problem with his medication, but he's traveling and can't connect with Dr. Jones. He missed a follow-up appointment, partly because he was discouraged he hadn't reached his goals for weight loss and exercise.

Under the global payment scenario, Dr. Jones completes his examination and sends Mr. Johnson down the hall to a health coach, who spends 20 minutes with him working out a weight-loss and exercise plan that fits his hectic schedule. Mr. Johnson is enrolled in the provider's Internet portal, which allows him to check his lab results and e-mail questions directly to Dr. Jones. So when the symptoms relating to his blood-pressure medication appeared, he e-mailed from the airport and had a response from his doctor when his plane landed.

He kept working with the health coach, and a few months later he had lost 20 pounds, his blood pressure was under control and Mr. Johnson was feeling much better. He was also less likely to more serious -- and expensive -- health problems down the road.

Then there's the touchy topic of end-of-life care. Medicare, which should be the leader in areas like payment reform, is still largely a fee-for-service operation. Instead of changing that, Washington tries to save money by cutting reimbursements to health providers, which results in cost-shifting to non-Medicare patients.

If there's a more dangerous place for people with weak health to visit than a pediatrician's office during flu season, it's a hospital. That's also where, under the perverse incentives of fee-for-service, people in their waning days can be exploited.

Consider the case of Dorothy Glas, recently profiled by "60 Minutes." At 85, Mrs. Glas was admitted to a New Jersey hospital, suffering from advanced heart and liver disease. She had signed a living will saying she wanted no extraordinary measures taken to keep her alive, but the specialists went to work anyway.

Examining her bills, "60 Minutes" found Mrs. Glas had been seen by 25 specialists -- neurologists, gastroenterologists, psychiatrists and more. They even gave her a Pap smear, as if a woman dying of heart and liver disease needed to worry about cervical cancer. Medicare paid for every test, every procedure.

I mean to make no blanket condemnation of physicians. There are cultural issues at play as well as economic incentives, especially when a patient lies at death's door and a physician sees his or her responsibility to be holding off the inevitable, as long as possible without worrying about cost.

But cost does matter, and so do the patient's wishes. A recent PricewaterhouseCoopers study, cited by Newsweek, concluded American spend $210 billion a year on unnecessary medical tests. The United States leads the world - and New England leads the nation - in the percentage of patients who die in a hospital or nursing home, alone, sedated and hooked up to expensive machines, even though most people say they would much rather die at home or in a hospice, surrounded by family and friends.

This is the health care debate we should be having, but the politicians and interests groups in Washington have offered little on payment reform beyond a few pilot programs. A state commission on cost containment recently proposed instituting a global payments approach, but the political prospects are dicey.

Health Care for All, the Bay State patient advocacy group that helped push health reform across the finish line, is now supporting global payments, along with a growing network of health organizations. But there will be losers as well as winners if we change the way we pay providers: high-tech specialists, teaching hospitals, those who make and sell expensive diagnostic equipment, and tiny physician practices that can't afford electronic record-keeping, health coaches and other services an Atrius-like system can provide. Their resistance will be strong.

With the "public option" joining a dozen other cost-containment ideas on Congress' cutting-room floor, Washington seems poised to follow Massachusetts' example: Get everyone covered now and deal with cost later. When "later" finally arrives, they need to start by reforming fee-for-service.

Rick Holmes, opinion editor of the MetroWest Daily News, blogs at Holmes & Co. (http://blogs.townonline.com/holmesandco). He can be reached at rholmes@cnc.com.