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98 posts categorized "Pay for performance"

October 24, 2012

MGMA 2012 Annual Conference - Small Steps, Big Changes

I spent a couple days this week at the annual meeting of the Medical Group Management Association, in San Antonio.  I had the opportunity to speak about health care social media to an engaged crowd (see synopsis here), and to attend a number of other interesting sessions.  As always, the hallway conversations, chats with vendors in and around the trade show booths, and the twitter back channel were among the most interesting parts of the experience. This meeting is larger than most that I tend to go to -- over 5000 attendees -- and there was quite a variety to the sessions -- ranging from the typical education sessions in parallel tracks, to general sessions with speakers who are as much performers as anything else, to presentations by sponsors/exhibitors both on-site and off-site. I encourage you to dip into the #MGMA12 tweetstream to get the full effect, and a better sense of the variety of what was on offer in San Antonio. 

Some folks with greater intestinal fortitude and more staying power than I can lay claim to -- including @IngaHIStalk -- made it to all of the vendor parties Monday evening. I was happy to make it to one, where Jonathan Bush of athenahealth was in fine form, braying as usual about the strength of his company's offerings and financial performance, and even donning WWF garb as athenaLibre to take on "The Meaningful Abuser."

One of the key takeaways from the meeting for me is confirmation of the introduction that I often include when I speak at outside of the Boston area -- I'm from the future.  Many basic assumptions that I have about the way health care works, the direction it's headed, and the things government does to it along the way are not necessarily built in to everyone's baseline thoughts about the health care environment.  National health reform is based in large part on the Massachusetts experience to date, and Part 3 of Massachusetts health reform is just getting underway, with a move towards limits on the growth of the health care spend (Mass. GDP +1%), ACOs for all, and an abandonment of fee-for-service reimbursement. These developments are necessary because we must all focus on improving quality while reducing cost. We will first begin to control the rate of growth in health care reimbursement, and then reimbursement levels will be heading inexorably downward. We can't wait until the health care spend cracks 20% of GDP. In order to address these hard truths, many theories and services and products are cropping up -- and they were all on offer at MGMA 2012.  

All the companies whose names begin with a lower-case "e" or are invented words were there to pitch their visions of integrated electronic management of the physician practice: including its patients, patient records, business intelligence, billing and collections. Meaningful use of certified electronic health records is just the tip of the iceberg.

They, and payor representatives, and a cadre of consultants, were there to highlight the many different ways in which practices need to get a handle on their patients, their patients' needs, their chronic and acute conditions, and the management of their care.  After all, doing so will contain costs, improve quality, reduce the need for hospitalizations, etc. Many tools and techniques were discussed to hep achieve the goal of improved communications with patients, which can improve the care that is delivered (and also to do things like reduce missed appointments, which add unreimbursed costs to the system), and improve patient compliance with physician recommendations for the lifestyle changes that are the key to reducing cost, improving quality, and improving health.

The American Hospital Association, American Medical Association, and Blue Cross Blue Shield Association representatives all said the things you might expect them to say (check out the tweetstream).  

Most practices represented at the conference seemed to be interested in maintaining their independence, even as speaker after speaker detailed the growth in numbers of hospital-owned practices (numbers bandied about ranged from 20% to 50% -- the twitterati, both on-site and off-site -- were able to confirm for me within minutes, with citations, that the 50% figure is closer to the mark; thank you @JMLineberger and @Cascadia).  One session, however, focused on the notion of increasing physician-hospital alignment through mechanisms other than practice acquisitions, and included several testimonials from the floor regarding the success of IPAs and PHOs from all over the country.  Speaking of alignment, I attended a good session on physician-hospital alignment presented by a representative of CHRISTUS Health, who was able to speak about her experience in building successful physician-hospital relationships.  (Again, check out the tweets for more detail.) It is a truism, but one of the general session speakers focused on the need to build trust as a prerequisite for physicians and hospitals to be able to work together productively. In general, many of the presentations and exhibitors were focused on the small, practical steps that practices need to take in order to succeed in the rapidly-changing current environment.

Some of my exhibit hall and hallway conversations with other speakers, attendees and vendors focused on the need for pathways to alignment other than practice acquisitions by hospitals, acquisitions by or mergers with other practices.  The proliferation of cloud-based software solutions brings sophisticated tools within reach of smaller practices, and enables them to participate "virtually" in the latest innovations in health care -- such as Accountable Care Organizations, both in the Medicare realm and in the commercial realm, by bringing powerful analytical resources to bear on the issues central to success in shared savings programs, including knowing one's costs and margins, and one's patients' profiles, and communicating with patients via text message, email, voice mail, per patient preference.  Since most physicians in the US (and among the MGMA's 13,000 members) are in groups of 10 or fewer physicians, the availability of these tools is a critical development.

I'll close with mention of two of the smaller companies whose services caught my eye in the exhibit hall -- MD Clarity and RegisterPatient.  Each is focused on a core offering with related items either already in the market or in the pipeline.  Each addresses a pain point in the experience of the physician practice, in a way that I have not seen elsewhere.

In my presentation about the risks and benefits of using social media in the health care realm, I asked (rhetorically) whether anyone in the room would want to have their patients post a prescription refill request on their practice's Facebook page, and suggested that if they didn't want that to happen, they should address the issue of waht's OK and not OK to post in policies and procedures accessible to visitors to the Facebook page.  Well, RegisterPatient has built a Facebook app for prescription refills, and for making appointments, replicating the functionality of its own website, and also sets up Facebook pages for its clients (often small practices without websites), where the app may be accessed as a "tab."  Kudos to this firm for addressing this need and for working on related needs of the small practice.

MD Clarity brings me full circle, back to the latest piece of health reform in Massachusetts.  One section of the new law requires that, if asked by a patient before an elective visit or procedure, a health care provider must tell the patient the cost of the service to the patient (including the rate paid by the patient's insurance company, if applicable, and patient copays and deductibles) - within four business days.  (As an aside, let me just marvel at the notion that a significant sector of the nation's economy does not regularly quote prices or rates in advance of purchases, and in fact cannot do so on less than four business days' notice. As an aside to that aside, let me note that the American Hospital Association, in response to the draft Meaningful Use Stage 2 regulation which sought to establish a 36-48-hour timeline for making medical records available to patients upon request, replied that a 30-day timeline would be more reasonable. Some of us think that as soon as someone other than the clinician making the entry has access, the patient should have access.) MDClarity allows a provider to provide the cost figures to a patient in real time, at the point of service.  A provider's payor contracts can be configured on this system, and patient enrollment, eligibility, deductible, copay and other infomation can be called up in real time. The information pulled by this product enables practices to improve the accuracy and timeliness of their billing and collections, and enables them to comply with laws such as the price transparency mandate in Massachusetts.

My story about MGMA 2012 ends here, but the bigger story about physician practices working towards success in an ever-changng environment continues.  Stay tuned.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting 

March 23, 2012

Pay For Performance and HCAHPS

"There's nothing better at incenting than money."

Setting aside for a moment the mangling of the English language in this quote (see the full article on HCAHPS and P4P), we can probably agree that financial incentives are often a reasonable way to evoke desired behavior change.

At the moment, we're talking about providing care in a way that evokes favorable responses by patients on the HCAHPS questionnaires. Hospitals that have been attentive to patient satisfaction matters -- as measured by HCAHPS -- will be the winners; others, the losers, in the Medicare zero-sum-game of value-based hospital reimbursement.

We love, love, love metrics. We think that if we dole out financial rewards based on metrics, then health care will be improved. So we've developed about 1,000 quality measures (see National Quality Forum (NQF) measure list), and we ask providers to track performance on too many of them, on the theory that you cannot manage what you do not measure -- an aphorism with truth to it, but folks, we have run amok with measures.

Since we don't track all 1,000 all at once, we end up focusing on the dozen or so metrics in front of us at any given time, and other things fall off the table. 

I would love to see six or eight ur-measures that are predictive of quality across a broad spectrum of issues. I've had the opportunity to discuss this and related P4P issues with some leaders in the field, and offer for your listening (or reading) pleasure (well, OK, it's subjective ...) interviews I've done with Leah Binder of the Leapfrog Group, Don Berwick before he went to work for Uncle Sam and Cyndy Nayer & Wayne Burton of the Center for Health Value Innovation.

So what do you think about pay for performance?

What works? What doesn't?

If you were king/queen of P4P, what would you do?

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


March 08, 2012

HealthCare SocialMedia Review - A New Blog Carnival - To Launch In April

While the HealthBlawger is generally loath to republish press releases, the source for the presser reproduced below is, well, the HealthBlawger himself.  With such impeccable provenance, we need make no further apologies ....

HealthCare SocialMedia Review - A New Blog Carnival - To Launch In April

HealthcareSocialMediaReviewOn April 4, 2012, the inaugural edition of a new blog carnival, HealthCare SocialMedia Review, will be posted on HealthWorks Collective by HWC curator Joan Justice, one of the co-founders of HCSMR. “We were inspired by other blog carnivals, including Grand Rounds and Health Wonk Review, and decided it was time to bring the blog carnival treatment to the world of health care social media,” said Justice.

David Harlow (aka HealthBlawg), health care lawyer, HWC advisory panel member and the other co-founder of HCSMR, continued:

The #hcsm tweetchat moderated by Dana Lewis and the community built by Lee Aase through the Mayo Clinic Center for Social Media are two examples of the many ways in which those of us who are involved in health care social media are able to interact, share best practices and new developments, and learn from each other.  By adding a blog carnival to the mix, we hope to increase the sharing of long-form thoughts on the opportunities and challenges associated with health care social media.

Justice noted, “All are welcome to submit blog posts for consideration to each edition’s host.  HCSM will be posted every other week -- alternating weeks with Health Wonk Review.  And for the uninitiated: a blog carnival is an anthology, an on-line journal club for bloggers, hosted by a different blogger each time.”

Details on hosting, submission guidelines, Justice and Harlow bios and more are available on the HCSMR home page.

Connect with HCSMR on Facebook, Google+ and Twitter to keep up to date.

For further information contact:

Joan Justice joan AT or @healthcollectiv
David Harlow david AT or @healthblawg  

# # #

Health care social media is of consequence in its own right, but also as a tool to implement or leverage other initiatives, across the spectrum of health care innovation today, including participatory medicine, accountable care organizations, mHealth and others.  We look forward to your participation in the HealthCare SocialMedia Review blog carnival as contributors, hosts and engaged readers/commenters.  See you April 4, at the inaugural edition, on HealthWorks Collective.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

December 05, 2011

Deja Vu All Over Again: David Harlow speaks with Gene Lindsey, MD, President and CEO of Atrius Health and Harvard Vanguard Medical Associates


Recently, I had the opportunity to speak with Gene Lindsey, President and CEO of Atrius Health and Harvard Vanguard Medical Associates. Atrius is a 1000-physician allliance of six medical groups in eastern and central Massachusetts; Harvard Vanguard is the largest of those groups.  We discussed some current developments in the health care regulatory landscape and marketplace, and Atrius' approach to positioning itself for success -- as well as its definition of success -- in the current environment, in domains ranging from improvinmg medical education to achieving the Triple Aim. 

Gene is a student of the history of his organizations (he's been a part of their operations, and those of their predecessor, Harvard Community Health Plan, since the 1970s), and he traces current discussions about health care quality and cost back to the thinking and writing of HCHP's founder, Dr. Richard Ebert. He described delving into Ebert's papers in "the bowels" of Countway Library at Harvard Medical School (Ebert was Dean there when he founded HCHP) and is clearly committed to the framework of collaborative, physician-led efforts to manage health care and control costs. He's taking his organization through a Lean process of cost-cutting, and is working to further Atrius's early successes under the proto-ACO Blue Cross Blue Shield of Massachsuetts Alternative Quality Contract (AQC).  Atrius Health's first year's results under the AQC look promising, though researchers writing in the New England Journal of Medicine concluded that further study is needed.  Gene says he has another two years' data, and the results continue to look good.

The audio file of my interview with Gene Lindsey is available for download/podcast.  It runs about 25 minutes. A full transcript is at the end of this post (and in the linked Gene Lindsey, CEO, Atrius Health, interview transcript).

In thinking about how to create a high-performing health care system, Gene observed: "as Atul Gawande says, the issue is that we’re not without knowledge, we’re just inept in applying that knowledge."  He predicts that the next several decades will be devoted to figuring out how to apply the knowledge we already have.  

He wrapped up our coversation by tying his work at Atrius to the IOM's six domains of quality, making a strong statement about his organization's commitment to patient-centeredness:

We have constructed our organizational activities around what the IOM called the six domains of quality, the most important of which is patient-centricity.  We need to design the system to be a benefit to the people who come to us for care - they are our reason for existence. That’s not been true in the past. In the past we’ve designed it for a lot of other reasons, but not always and specifically to benefit the care of people.  Sometimes it’s for the convenience of physicians, sometimes it’s for the perpetuation of august institutions - whatever it’s been, but it’s not always been that the patient’s been at the center of it.  Lucian Leape, whose name you introduced earlier, focused us on safety. The other issues . . . care needs to be timely if it’s going to be safe and patient-centered, it needs to be efficient and effective if we’re going to have a society that continues to exist, and the last and most important of the domains is it’s got to be equitably delivered -- and probably that has been the biggest conundrum for our country.  How do we get the last 15% of our citizens covered in a fashion that doesn’t destroy the economics for the rest of us? [T]hat in and of itself is the most compelling reason to look hard at why and how we waste resources.  

During our conversation, Gene jokingly called me an anarchist, due to my hyperbolic characterization of the Lucian Leape Institute's recommendations about re-inventing medical education in the US. The truth is, we need to put a little bit of the anarchist in each of us to work if we want to achieve meaningful change to our broken health care system.

Keep an eye on the man with the bowtie.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


HealthBlawg :: David Harlow’s Health Care Law Blog

Interview of Dr. Gene Lindsey, President and CEO of Atrius Health 

 and Harvard Vanguard Medical Associates

November 30, 2011

David Harlow:  Hello, this is David Harlow on HealthBlawg and I have with me today Dr. Gene Lindsey, President and CEO of Atrius Health, an alliance of 6 medical group practices in Eastern and Central Massachusetts with over 1000 physicians at 50 locations.  Dr. Lindsey also serves as President and CEO of Harvard Vanguard Medical Associates, the largest of the groups.  He started practicing at Harvard Vanguard’s predecessor, Harvard Community Health Plan, over 35 years ago and has held a variety of leadership positions in these and related entities through the years.  Gene, thank you for joining us today.

Gene Lindsey:  I’m glad to be here David, thank you very much for inviting me.

David Harlow:  My pleasure.  So you’ve had some firsthand experience practicing in the early days at one of the country’s leading HMOs - in fact, working with our soon-to-be-former CMS administrator Don Berwick. How are those days and that experience similar to the current environment where so many folks are focused on accountable care organizations and new payment systems?  Many have said these look a lot like capitation - though we’re not allowed to say capitation these days, and of course we have some new bells and whistles.  I wonder if you could speak to some of the similarities and differences and, since we didn’t fix the healthcare system for good back in the ’70s, what’s different this time around?

Gene Lindsey:  Well, that’s one of my favorite questions, David.  It is déjà vu all over again for me in many ways, in that there is certainly a sort of a pioneer spirit that’s associated with our organization now that feels very reminiscent of the spirit that existed when I joined the organization in 1975.  In fact, the term “capitation” was not a term that we used back then. Dr. Robert Ebert, who was the dean of the Harvard Medical School and through whose vision Harvard Community Health Plan evolved, used the phrase “prepayment” and it was his concept which we still share today: that fee-for-service medicine led to a fragmentation of care that was deleterious to the concept of wellness and to the preservation of health.  And so some of the terms that were popular at that time really focused more on health maintenance and so we call them HMOs, Health Maintenance Organizations - it’s too bad that these three-letter acronyms became four-letter words.  But I think that that was because of the fact that the larger market that wasn’t driven by Dr. Ebert’s vision of wellness but was more economically focused on institutional bottom lines sort of took the spirit of the process and diverted it in a different direction; but the early days of Harvard Community Health Plan included not only Don Berwick, but other people who have gone on and made huge contributions like Glenn Steele who was a surgeon here - he is now the CEO of Geisinger.  Glenn was a surgeon at Harvard Community Health Plan from the mid 70s through the late 80s.  There was Glenn Hackbarth, who is the current chair of MedPAC, who was one of my predecessors as the CEO of Harvard Vanguard.  So our organization has always been focused on the future and always been focused on what we can do in the moment to improve the health of the individuals who come to us for care.

David Harlow:  So you said the word “pioneer,” so I wanted to ask you about what you’re doing in the pioneer arena as we’re moving towards ACO development, and my understanding is that you’re moving in that direction on behalf of the organization.  I’d like to get your thoughts on the Pioneer ACO structure and how that relates to your present activities, or activities over the past year or so under the alternative quality contract with Blue Cross Blue Shield of Massachusetts.

Gene Lindsey:  Well I certainly am in support of the Affordable Care Act, in particular the part of the Affordable Care Act that’s looking at the development of new practice models through CMMI, and on various occasions we have had conversations with people at CMMI and CMS -  they’ve asked us for our input in how to create programs that will be potentially successful.  Their goal is obviously to simultaneously reduce the healthcare spend while improving the quality of the care that’s provided, and our organization literally has adopted as a major portion of its reason for existence the success of what the IHI has called the triple aim: better care for individuals and better care for communities at an affordable cost. 

The ACO movement, I believe, is the national extension of Dr. Ebert’s ideals.  We’ve been looking for an economic model that actually supports the fact that care that’s going to be most effective will probably be care that’s delivered in a variety of environments that are difficult to harness in a fee-for-service way.  I think that we have sort of gotten as far as we can get in terms of health improvement and efficiency paying for care only in a hospital or in an office, and the advantage that Dr. Ebert saw 42 years ago was prepayment, was that many programs that utilize time and energy of clinicians outside the office and hospital environment were going to be the fulcrum of what we could accomplish with patients.  Now in this moment that means trying to take care out of the office into the space where the patient lives, and our organization does that through things like a patient portal on our website that allows them to have direct communication with their physician or with other caregivers in our system. We’d like to have programs of wellness, behavior modification, things of that sort, that go beyond the scope of the 15-minute appointment, and actually often take our clinicians into the home for the homebound elderly in ways that are very difficult to support – again, if there’s a turnstile in front of the office that a patient has to walk through to economically support the system. 

So those ideas all feel to me like they’re exploratory and in that regard the concept of it being a pioneer effort seems very appropriate.  I think in the commercial area - you referred to the AQC, I believe - we’ve learned a lot over the last 3 years because what the AQC contract had as a very laudable direction was moving from volume-based reimbursement to value-based reimbursement.  And when it started for us we didn’t know for sure how to begin that journey but what we did quickly learn was – and I know that you have a prior relationship with Marc Bard – Marc preaches that the whole success will be on the basis of moving from a concept of individual effort to group effort.  He talks about moving from I to WE and that’s exactly what was necessary to be successful within the AQC - to begin to assemble groups of clinicians and healthcare professionals to look at rosters of patients, to look at results in a collective fashion, to put together programs that would allow outreach to people whose health needed particular attention in one area or another - congestive heart failure and diabetes have been certainly big areas of focus, we’re beginning to try to put together programs that help with mental health issues and also with the new epidemic of obesity.  So all of these programmatic approaches to problems that are shared by patients is what we refer to as population medicine and you can do more, and do more effectively, if you approach it in terms of programs - and those are all not possible to support very effectively in a fee-for-service system.  But if you can group the budgets from many patients together as a resource then in fact you can very efficiently fund programs that do promote wellness which, over a series of years, will reduce the total spend on healthcare because it’ll be avoiding a lot of long term complicated problems that are otherwise going to be an individual drain on the collective healthcare spend.  So we’re learning a lot - it’s a fun time - my only regret in this is that I’m old as I am and I don’t have that many more years left to go because I think the next 20 years of healthcare is going to be a really fantastic place to be.

David Harlow:  Yes, we are certainly in interesting times.  You said a couple of things I wanted to follow up on.  One is on the question of seeing results and system savings from the approach that you describe.  There was a recent piece in The New England Journal of Medicine looking at initial experience under the AQC which basically said, if I remember correctly, looks good, looks like we’re moving in the right direction, but further study is needed.  Is there any information that you could bring to bear on that observation from prior experience with Atrius, with Harvard Vanguard, with Harvard Community Health Plan, that would tend to support the idea that this is actually going to work?

Gene Lindsey:  Yes, in fact that article was based on just the very earliest results from the first year and I’m aware of the results of the next year already and almost two years’ more data, and the data has continued to improve.  We’ve learned a lot, our initial efforts for instance in the quality areas led to what I would say is the reproduction of a typical dose-response curve.  You had a sharp improvement that then began to plateau off, and that’s not a surprise because I think that each time you do something new it has an effect, and the effect will carry you so far towards the goal, but then you have to come up with what’s next that’ll get you a little further so it’s a very interesting concept of continuous improvement.  And in fact much of the results that we’ve achieved have been through the adoption of continuous improvement in the form of Lean process management so that the results that we’ve achieved so far are the results of a very fledgling organization with Lean and I’m very excited that as our process improvement skills increase, our ability to yield results within the AQC-type payment mechanisms will improve as well. 

What we’re really driving for is improved health. We talk about outcomes, and ultimately, to get the sort of outcomes we need and want, we have to go through a process of creating professionals who know how to affect behavior.  And then we have to have those skills connect with patients in such a fashion that the patients begin to be involved in improving their health.  And that is a series of adaptive changes that takes time and so I think that it’s a long climb, but we’re well on our way, and it is a good example of the phrase that you sometimes hear, which is “act your way into learning.” We really, every time we do something, whether it works or not, it clarifies to us what will lead to more success - and that’s really the adventure of it.  I think physicians by nature are heuristic, they like to solve problems, the people who work with us - our other healthcare professionals - have found that this adds a new meaning to their work; they all went into healthcare because they have strong empathetic tendencies, they want to see improvement, it’s been frustrating for them to be embedded in systems that don’t deliver results,  and the hope of being involved in something that actually approaches what they dreamed of when they went into healthcare - I think it’s been a personally regenerative sort of process for a lot of folks.  It’s sort of exciting to be around. 

David Harlow:  It sounds like it. I’m wondering as you’re talking a lot about retraining and redirecting and refocusing folks who have been practicing clinicians for a while, and earlier this year or last year the Lucian Leape Institute issued a recommendation to blow up medical education and start again, basically saying – look, we haven’t really addressed the issues of medical errors and cost and to do so we really need to reinvent medical education.  Do you see that as a reasonable approach? An organization like yours is of a size that can afford, in the scheme of things, to engage in this sort of reinvention, but most medicine is still practiced in smaller settings and folks can’t really do that.

Gene Lindsey:  I think you’ve thrown me enough to talk about for maybe 3 hours right there, in that last little soliloquy. Let me just begin with a first thought.  The core of the reason for the formation of Harvard Community Health Plan was to do just that - to change medical education.  Dr. Ebert envisioned it as a teaching practice. I’m a student of history, in a way, and I’ve gone to the Countway library archives, with permission of his wife, and gone down into the bowels of the building where all of his papers are stored and actually read what he wrote back in the ‘60s.  And he imagined then that much of the problem lay in medical education, in the fragmentation of the education that residents and interns and medical students received, where they learned about the kidney and then they learned about the heart and then they learned about the lungs, but they never learned about the whole person.  And he didn’t believe it that was possible in a hospital environment, which is very artificial in a way and he felt that the education needed to move into the ambulatory environment where people could actually see their patients closer to where they lived and closer to where the behaviors that created disease actually occurred.  So that’s not a new thought, and I think it is true that we need to be continuously redesigning medical education - in fact I read recently that some of our medical schools across the country, the one that I remember reading about, Jefferson Medical School for instance in Philadelphia, I think, has a program where they actually admit medical students to the hospital overnight so they can have the experience of being in the hospital to understand what it’s like from the point of view of the patient.  And I think that there’s been a lot of activity towards trying to introduce into the lives of medical students how to assess readiness for behavioral change and things of that sort.  So the progress is slow but it’s not non-existent - I do believe that it needs to continue.  I can tell you that every medical student who graduates from Harvard Medical School now has some sort of experience within Harvard Vanguard.  So it’s not as if we’re at zero; we may not be up to full speed but there is progress towards the issue of retraining, and revamping medical education, and I think Dr. Leape’s Institute is correct that process needs to - I assume that they’re using a lot of hyperbole in their statement and trying to --.

David Harlow:  I don’t think they said they’re going to blow it up - that was me -

Gene Lindsey:  That was you, okay -

David Harlow:  That was me -

Gene Lindsey:  Okay, so you’re the anarchist, okay - but it does need to continuously improve, that’s for sure, in this direction.  So I think that’s also a part of what’s encouraging in the moment.  The term that I’ve really come back to again and again and again are the issues of adaptive change both for patients and also for healthcare professionals. The ways in which we have worked have created a lot of understanding scientifically and yet, as Atul Gawande says, the issue is that we’re not without knowledge, we’re just inept in applying that knowledge. So I see this period of time, over the next 20 years, as the way in which we develop the systems that actually bring the fruits of the bench science and the medical technology that’s developed over the last 30 years to the benefit of more and more people in a more and more efficient fashion.  And that’s about organization and that’s about teamwork and that’s about redeployment.  It’s certainly true that as in many other industries we’re still shackled by the fixed investments that we have and so it’s about a process of, as a society, moving away from nonperforming assets and all of that is difficult because there is a sense of loss that’s associated with it, and that’s got to be balanced by a continuous reminder to ourselves of what it is we’re trying to achieve because that’s the only way that you can find the emotional energy to do the hard things that are necessary to get to a better level.  I don’t believe you can do it for money; I think you have to do it because you believe that it will be better for the community - for the same reasons that you plant flowers around your home: because you want it to look better and to be aesthetically something that provides you a gratification that just a focus on finance can’t ever bring.

David Harlow:  Well, hopefully, it has some of these desired results because otherwise we’re going to bankrupt ourselves.  I heard an interesting figure last month, or earlier this month, where somebody said that in order to support our expanding healthcare spend at the federal level, by 2050 our marginal tax rate will have to be 93%.

Gene Lindsey:  Absolutely.

David Harlow:  So we do have to focus on costs.

Gene Lindsey:  I was in a conversation recently with Jay Gonzales who is the Secretary of Administration and Finance for our State, Massachusetts. Right now we’re spending 41 cents of every dollar that the state collects as taxes on healthcare. You don’t have to be an economist to know that that’s probably not a good idea; it doesn’t leave us much left over for roads, for public safety, for schools, for the cultural things that add meaning to our lives.  It pretty much just makes it about supporting a hospital-based system and that’s really -- I don’t think, I can’t think of anyone who would prefer to go to the hospital versus the symphony.  It’s just not right – now, so let me clarify something: all of the stuff that I’m talking about is not in my mind a sense of adding more dollars to the system, I think that I’m a total proponent of the concept that we have allocated enough of our economy to healthcare we’re just not spending it effectively and efficiently.  If there is any phrase that reverberates through my mind on a daily basis it’s efficient, effective, and that’s the thing that’s appealing to me and if you remember those are two of the six domains of quality.  We have constructed our organizational activities around what the IOM called the six domains of quality, the most important of which is patient-centricity.  We need to design the system to be a benefit to the people who come to us for care - they are our reason for existence. That’s not been true in the past. In the past we’ve designed it for a lot of other reasons, but not always and specifically to benefit the care of people.  Sometimes it’s for the convenience of physicians, sometimes it’s for the perpetuation of august institutions - whatever it’s been, but it’s not always been that the patient’s been at the center of it.  Lucian Leape, whose name you introduced earlier, focused us on safety. The other issues - just quickly -  care needs to be timely if it’s going to be safe and patient-centered, it needs to be efficient and effective if we’re going to have a society that continues to exist, and the last and most important of the domains is it’s got to be equitably delivered -- and probably that has been the biggest conundrum for our country.  How do we get the last 15% of our citizens covered in a fashion that doesn’t destroy the economics for the rest of us and that in and of itself is the most compelling reason to look hard at why and how we waste resources. 

David Harlow:  Well thank you Gene.  I think I’d like to end it there wrap it up there and you’ve given us a lot to think about today and again I thank you for joining me on HealthBlawg. 

Gene Lindsey:  Thank you David.  I really appreciate this opportunity.

David Harlow:  I’ve been speaking with Dr. Gene Lindsey, CEO and President of Atrius Health and Harvard Vanguard Medical Associates.  Thanks again, Gene.

Gene Lindsey:  Thank you David.

October 31, 2011

Accountable Care Organization Regulations - The ACO is a Camel, Not a Unicorn


The final Accountable Care Organization regulations are out, the initial flurry of commentary is out (including my own ACO webinar with simultaneous #ACOchat tweetchat - available for replay; slides here : "ACOs, Bundled Payments and the Future of Health Care"), and we can now all catch our collective breath and contemplate the draft vs. final ACO regulation comparisons, the meaning of this new, final set of regulations, guidances and statements from CMS, FTC, DOJ, OIG, and IRS on ACOs and Medicare Shared Savings Programs, and all of the attendant antitrust, antikickback, Stark, and other fraud and abuse matters, and of course tax issues.

So, now that these final regulations are out, and the mythical characteristics of the ACO will soon be dispelled (see under: unicorn), I propose a new animal kingdom metaphor for discussion of Accountable Care Organizations:

The Camel's Nose is in the Tent.

The definition of a camel, as those of you who tuned into my ACO webinar already know, is a horse designed by a committee.  And, given the nature of the legislative and rulemaking processes, that's exactly what we have before us - a camel.  

The clincher, though, is the way in which the final regulations have been engineered.  

CMS would have ACOs, by virtue of participating in the MSSP, diffuse all the ACO goodness of care management, quality and cost control, etc., into the broader Medicare population.  This conclusion is inescapable.  CMS is focused on the question of how to do more with less, and the ACO conceptual framework, if not the details, will permeate many arenas across the health care lansdscape.

ACO assignment is still retrospective (even if there is a nod to prospective assignment, that nod is provisional, and reconciliation must be done after the close of the contract year). Since an ACO never knows for sure which patients' experience will form the basis of its gainsharing or risksharing, it must behave as if each Medicare benefiicary who receives care form its providers will ultimately be attributed to the ACO.

In addition, the slimmed-down set of 33 ACO quality measures focus in part on "better care for individuals" (through CAHPS scores for patient/caregiver experience, also care coordination/patient safety measures, too), and in part on "better health for populations" (vaccinations, screenings, diabetes management). 

These are just two examples of the ways in which CMS is leveraging its MSSP authority to engineer provider focus on improving population health.

Another "proof text," if you will, is the fact that at most, CMS anticipates that no more than two million Medicare beneficiaries will be seen by no more than 270 ACOs in the initial three to four years of the program.  (Compare those figures to the roughly 47 million Medicare beneficiaries and 6000 hospitals, and you will quickly get the sense that the MSSP / ACO is a test probe, not a wholesale shift.)  Even if the maximum anticipated ACOs are established and beneficiaries are served, projected savings to Medicare will top out at less than $1 billion over four years.  In a $2.5 trillion a year health care economy, this is bupkes (a technical term).

So, the idea of the ACOs under the MSSP is the camel's nose in the tent -- the forerunner, the disruptive innovation that is intended to set the rest of the system off-kilter until it reaches a new status quo on the other side of the Triple Aim.

Given the emphasis on a wholesale departure from fee-for-service payment (even if it's done through workarounds thanks to the inertial forces of the "assets in place" of existing law and the systems built up around it), which will reverberate throughout Medicare and the rest of the health care system, it is critically important for health care providers to begin now -- if they have not already begun -- to take a broader view of the patient encounter, to get a firm grasp of their own costs and the costs of their partners, and to start thinking about the power of collaboration.  Physicians, hospitals and all other sorts of health care providers need to think about episodes of care, bundled payments, care management, cost control and the path forward to a win-win-win for patients, providers and payors in a blown-up-and-put-back-together high-performing health care system.

Oh -- camels spit, so be prepared!

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

October 20, 2011

Ladies and gentlemen, the final Accountable Care Organization regulations!

Today, CMS released the final ACO regs, after many months and after reviewing something north of 1300 comments filed.  For now, I wanted to share the CMS presser and links.  Analysis and discussion to follow....  For background, the draft regs, and commentary on ACOs over the past few months, please see all HealthBlawg posts on Accountable Care Organizations.  

I will be presenting a free webinar on ACOs and other CMS initiatives next Thursday, October 27, 2011, 1:00 p.m. ET via HCPLive.  You may learn more about it and register here: ACOs, Bundled Payments & the Future of Health Care.

Reproduced below is today's CMS presser with links to today's government publications -- including regulations and fact sheets -- on Accountable Care Organizations (aka Medicare Shared Savings Program) and the Advance Payment Model for physician-owned and rural providers who need assistance with start-up costs associated with ACO / MSSP participation.  You should read CMS Administrator Don Berwick's perspective on the ACO final regulations, too.

If you'd like to, you can jump right in to the full text of the final ACO regulations, or take a quick look at a table comparing the final ACO regs to the proposed regs.

The helping hand extended by the federales through the Advance Payment Model is encouraging to me, because -- as I've written before -- I believe that having physicians lead in this arena is of critical importance in order to achieve the Triple Aim and to effectively bring costs down in an era of constrained resources.

I hope you can join me for the webinar.  If you have any specific questions you'd like me to address in the webinar or otherwise, please note them as comments to this post on HealthBlawg and/or in the course of registering for the webinar.


For Immediate Release: Thursday, October 20, 2011
Contact: CMS Office of Public Affairs


New tools help doctors and other health care providers improve quality of care

People with Medicare will be able to benefit from a new program designed to encourage primary care doctors, specialists, hospitals, and other health care providers to coordinate their care under a final regulation issued today by the Department of Health and Human Services (HHS).  Created by the Affordable Care Act, these final rules on Accountable Care Organizations add to the menu of options for providers looking to better coordinate care for patients and will make it easier for providers to deliver high quality care and use health care dollars more wisely.

The initiatives announced today are just two of several efforts made possible by the Affordable Care Act to help bring better health, better care and lower costs not just to Medicare beneficiaries, but to all Americans.  For example, the Bundled Payments for Care Improvement Initiative and Comprehensive Primary Care Initiative offer alternatives to coordinate and improve health care.

“Today we have taken another step to improve health care for people with Medicare,” said HHS Secretary Kathleen Sebelius.  “We are excited to give doctors, hospitals and other providers the flexibility and support they need to work together and focus on making sure patients get the care they need.”

“This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other health care providers to work together in new ways,” said Secretary Sebelius.

The two initiatives launched today – the Medicare Shared Savings Program and the Advance Payment model – will help providers form Accountable Care Organizations and reflect the significant input provided by stakeholders as well as lessons learned by innovators in care coordination in the private sector. 

  • The Medicare Shared Savings Program will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients.  Providers who band together through this model and who meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program.  The higher the quality of care providers deliver, the more shared savings the providers may keep. 
  • The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.  The advanced payments would be recovered from any future shared savings achieved by the Accountable Care Organization.

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald M. Berwick, M.D., administrator of the Centers for Medicare & Medicaid Services (CMS).  “This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive.”

Both the Medicare Shared Savings Program and Advance Payment model create incentives for health care providers to work together to treat an individual patient across care settings – including doctors’ offices, hospitals, and long-term care facilities.

Unlike a managed care plan, Medicare beneficiaries will not be locked into a restricted panel of providers.  Rather, a determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization.

“We listened very carefully to the more than 1,300 comments we received on the proposed rule released this spring, and this final rule includes a number of improvements suggested by those comments that will strengthen the program,” Dr. Berwick said.  “For example, the final rule will increase the incentives and streamline the Shared Savings Program, extending the benefits of the new program to a broader range of beneficiaries.”

Other changes from the proposed rule include making the one-sided model truly one-sided, expanding participation to Rural Health Clinics and Federally Qualified Health Centers and organizations where specialists provide primary care, and providing a flexible starting date in 2012.  Federal savings from this initiative could be up to $940 million over four years.

To aid organizations interested in becoming Accountable Care Organizations, CMS offers a number of learning opportunities for providers, including the third Accelerated Development Learning Session on November 17-18 in Baltimore.  This free session will offer providers the opportunity to learn more about this option for providing care.  For more information, visit

People with Medicare have received information about what an Accountable Care Organization could mean for them in the annual issue of “Medicare & You” and if their current health care provider is participating in an Accountable Care Organization, they will receive additional information from their provider. 

The Shared Savings Program final rule is posted at:

The Advanced Payment solicitation is posted at:

For more information, fact sheets are posted at:

The joint CMS and Department of Health and Human Services Office of Inspector General (OIG) Interim Final Rule with Comment Period addressing waivers of certain fraud and abuse laws in connection with the Shared Savings Program is posted at:

The Antitrust Policy Statement is posted at: and

The Internal Revenue Service (IRS) Fact Sheet, Tax-Exempt Organizations Participating in the Medicare Shared Savings Program through Accountable Care (FS-2001-11), will be posted at: .  

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

September 30, 2011

Health 2.0 Fall 2011

I attended Health 2.0 in San Francisco this week, and participated in the new Health Law 2.0 pre-conference, moderating a lively panel discussion about reviews posted on listings and ratings websites, featuring attorneys and an entrepreneur.

Please take a look at the posts I've written about the conference, here at HealthBlawg, and on HealthWorks Collective:

Health 2.0 San Francisco, September 2011, "Son et Lumiere"

"This post comes to you from the Health 2.0 conference in San Francisco.  The main conference kicks off today, but it has been preceded by a week of code-a-thons and a variety of other events, including HealthCamp and the four-track pre-conference yesterday (Health Law 2.0, Patients 2.0, Doctors 2.0, Employers 2.0).  I moderated one of the Health Law 2.0 panels, and shook up some of my brothers and sisters at the bar by wearing my new Regina Holliday jacket -- I've joined the Walking Gallery.  (Follow the links, including the walking gallery back story, to learn more about who Regina is, and what this means.) ..."  (Read more on the Health 2.0 pre-conferences.)

Health 2.0 Kicks Off in San Francisco

"Todd Park, the HHS CTO, is a vigorous champion of data liberation.  He has moved the government to open its vast repositories of data (e.g. Medicare claims data) to sharing with the public to solve health care problems.  Data liberation is one of the watchwords of the participatory medicine movement, and is a goal that will be reached more easily through the proliferation of online tools that will facilitate health information exchange.  While we would hope that, in the future, this would be a core functionality of interoperable EHRs, It seems we just aren’t there yet.  Meanwhile, however, there are Health 2.0 companies ready to bridge the gap, and ensure that data from whatever source regarding an individual patient will be available to her clinicians...."  (Read even more on the Health 2.0 pre-conferences.)

Health 2.0 - Focus on High Quality, Low Cost & Connectivity

"The health care payor and provider worlds are concerned with access, cost and quality.  The federal government adds a population health gloss, and calls it the Triple Aim – better care for individuals, better health for populations, at reduced per-capita costs.  Those fundamental drivers are now having a clearer effect on the Health 2.0 ecosystem.  The demos and discussions I’ve observed thus far at this year’s conference are more consistently focused on addressing these issues than they have been in the past.  Early-stage, and more established, companies’ products are also notable in that they are focused on connectivity in a broader sense than before – whether that’s connectivity for data, so that sensors can share data with your personal tracking software, your doctor or your community, or connectivity for individuals, who can use online social tools to improve their own health status through online interactions in a number of different ways...." (Read more on Health 2.0 Day 1.) 

       Health 2.0 Conference: Data Liquidity Can Improve Care and Reduce Cost

"On the last day of Health 2.0, the key takeaway was this: data liquidity can improve health care and health status, and reduce cost.  Hey, we knew this already; the cool thing about hearing this message at Health 2.0 is that you get to hear it (1) while seeing the tools that will actually create that data liquidity that are ready for prime time, or almost ready for prime time and (2) from federal officials who are visibly excited about this stuff...." (Read more on Health 2.0 Day 2.)

In addition, please take a look at the Health 2.0 Fall 2011 vlog with David Harlow, featuring 18 mini-interviews on Health 2.0 and "data liberation" with some of your favorite Health 2.0 and ONC figures -- including Matthew Holt, Jane Sarasohn-Kahn, Farzad Mostashari and Lygeia Ricciardi -- and some new faces as well.

The conference was jam-packed, and of course there were many more worthwhile demos and presentations that I was not able to include in these brief collections of highlights.  I hope to see more of you at the next conference.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

September 20, 2011

Health 2.0 and American Academy of Orthopaedic Surgeons

I will be speaking at two conferences over the next week:

    (1) AAOS Practice Forward: Managing your Practice in an Era of Health CareTransformation (PDF; also see AAOS webpage) in Chicago, where I will be giving two presentations - one on shared savings programs including accountable care organizations and bundled payment initatives and one on the effective (and legal!) use of social media by health care providers together with my colleague Jamie Verkamp (with whom I have presented a number of health care social media webinars; and

    (2) Health 2.0 in San Francisco, where I will be moderating a Health Law 2.0 panel discussion on managing online reviews of health care providers and services:

Legal Concerns with Provider and Product Ratings, Rankings and Reviews

Moderated by: David Harlow, The Harlow Group LLC

Many Health 2.0 based companies either directly or indirectly provide information on providers, products or services. Companies or consumers often post candid reviews. An expert panel will discuss the legal implications of offering information on providers. They also will give some examples of problematic information and tips on how to avoid defamation claims and other legal actions.


Karl Olson, Ram, Olson, Cereghino & Kopczynski

David Johnson, Crowell Moring

Mitch Rothschild, CEO, Vitals

I hope to see some of you out there -- in the heartland and on the left coast.  Feel free to tweet me - @healthblawg.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

August 24, 2011

Bundled Payments for Care Improvement initiative announced by CMS Center for Innovation

Many health care provider organizations have not been overly eager to jump onto the Accountable Care Organization (ACO) bandwagon, citing high startup costs and uncertain returns on investment given the complexity of the program.  Well, recently, the CMS Center for Innovation has announced the Bundled Payment for Care Improvement initiative.  This initiative incorporates elements of earlier CMS demonstration projects -- the gainsharing demos and ACE (acute care episode) bundled payments demonstrations which the HealthBlawger has helped a number of clients around the country qualify for in the past -- and builds on the broad authority granted to the CMS Center for Innovation under health reform.

The advantages to proceeding with a Bundled Payment for Care Improvement project include the opportunity to participate in CMS shared savings programs while only providing limited commitment of organizational resources, i.e., limited to one or more discrete service lines or episodes of care.  Of course, investments in a culture of collaboration must be made, but the system-wide investment in IT and other infrastructure at the level called for in order to qualify as an ACO would not necessarily be required in order to proceed with this initiative.

There are a number of different models open to participants, and nonbinding letters of commitment are due as early as late September.

From the CMS Center for Innovation announcement:

Applicants would propose the target price, which would be set by applying a discount to total costs for a similar episode of care as determined from historical data.  Participants in these models would be paid for their services under the traditional fee-for-service (FFS) system.  After the conclusion of the episode, the total payments would be compared with the target price.  Participating providers may then be able to share in those savings.

Applicants for these models would also decide whether to define the episode of care as the acute care hospital stay only (Model 1), the acute care hospital stay plus post-acute care associated with the stay (Model 2), or just the post-acute care, beginning with the initiation of post-acute care services after discharge from an acute inpatient stay (Model 3).  Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians and other practitioners.

The alignment of incentives that can occur under any one of these scenarios is, of course, greater than what obtains under traditional, fee-for-service Medicare.  Health care providers and patients alike may well benefit under this initiative, and it seems to me to make a great deal of sense for providers to jump into initiatives like this.  After all, a wholesale move away from fee-for-service medicine is likely inevitable, and is taking places in fits and starts like this at the federal level, and like the continuing Massachusetts health reform experiment (see also this post on Massachusetts global payments), to use one example at the state level.

Please feel free to contact me should you wish to arrange a consultation.  I have worked with a variety of folks in preparing for successful participation in CMS programs like this one in the past, and look forward to working with many more successful health care provider organizations to identify and implement the cultural and other changes necessary to be successful in this initiative, to select the most appropriate model to pursue, and to obtain any and all relevant CMS approvals.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

June 24, 2011

The Massachusetts Experiment Analyzed: Are We Ready for Global Payments?

Massachusetts Attorney General Martha Coakley released her office's second annual report, An Examination of Health Care Cost Trends and Drivers (PDF; see also press release), which contains a wealth of critical data analysis -- and also highlights how little we know about certain things -- providing some important context for the discussion of the proposed Part III of Massachusetts health reform, a bill filed by Governor Patrick which would create all-payor ACOs and a system of global payments.

At this late date, few would argue against a move a way from fee-for-service reimbursement for health care, or adding quality metrics to the mix, and tying financial rewards to providers to their performance measured against these metrics.  (Consider the Massachusetts Blue Cross Blue Shield ACQ (alternative quality contract) experience.)  The AG's report, however, highlights the wide disparities in payments to providers based on negotiating strength, rather than quality or cost of care (as noted in last year's AG report; check out the 2009 special commission report, too).

From the presser:

This year’s six key findings are:

  1. There is wide variation in the payments made by health insurers to providers that is not adequately explained by differences in quality of care. 
  2. Globally paid providers do not have consistently lower total medical expenses.
  3. Total medical spending is on average higher for the care of health plan members with higher incomes.
  4. Tiered and limited network products have increased consumer engagement in value-based purchasing decisions.
  5. Preferred Provider Organization (PPO) health plans, unlike Health Maintenance Organization (HMO) health plans, create significant impediments for providers to coordinate patient care because PPO plans are not designed around primary care providers who have the information and authority necessary to coordinate the provision of health care effectively.
  6. Health care provider organizations designed around primary care can coordinate care effectively (1) through a variety of organizational models, (2) provided they have appropriate data and resources, and (3) while global payments may encourage care coordination, they pose significant challenges. 

The Attorney General makes six (6) recommendations to promote value-based purchasing and ensure consumer access to high quality, affordable health care:

  • Promote tiered and limited network products to increase value-based purchasing decisions.
  • Reduce health care price distortions through temporary statutory restrictions until tiered and limited network products and commercial market transparency can improve market function.
  • Encourage consumers to select a primary care provider who can assist consumers in coordinating care based on each consumer’s needs and best interests. 
  • Promote coordination of patient care through primary care providers by recognizing the need to improve funding of care coordination, including the infrastructure necessary to coordinate care, and by giving providers timely access to relevant patient data regardless of their size or payment methodology.
  • Consider steps to improve the use of the all payer claims database (APCD) by:  (i) developing reports for providers and the public to guide development of patient care coordination improvements and system accountability, and (ii) increasing the standardization of claim level submissions by reducing differences in how payers report payment level information.
  • Develop appropriate regulations, solvency standards, and oversight for providers who contract to manage the risk of insured and self-insured populations.

The full report is well worth the read.  Nuggets include the following through-the-looking-glass experience of looking at data produced in response to civil investigative demands from the AG's office and realizing that it is basically impossible to tell if negotiated rates and deals bear any relationship to quality and outcomes:

The complicated structure of risk contracts currently in place in the Massachusetts market makes it difficult to compare payments made under those contracts. Each risk contract has multiple components, such as infrastructure payments, quality payments, service carve-outs, unit price adjusters, mandated benefit adjusters, individual stop-loss provisions, and other factors that are each negotiated and vary significantly across provider contracts. These components confound efforts to understand and compare how health insurers pay providers. None of the three major health insurers could provide us with health status adjusted budget information comparing the providers in their networks that they pay under a global contract. In other words, none of the health insurers routinely and systematically evaluates how the global payment contracts that they have with various provider organizations compare to each other. This convoluted payment methodology makes it difficult for regulators, market participants, or others to make valid comparisons of provider rates or valid conclusions about the effects of global payment contracts, and further complicates the ability of providers to contract for value-based, market appropriate prices. Health insurers should pay providers using standardized payment methodologies that allow providers to value the risk that they hold and so stakeholders can make valid comparisons of provider global rates. (Emphasis supplied.)

Meanwhile, Governor Deval Patrick was in DC, testifying before the Senate Finance Committee (PDF of testimony).  He seems to have a more optimistic perspective on the system's ability to implement cost containment and quality improvement strategies in the commercial sector:

Rising costs in the health care system across the Nation are a serious national problem.  In fact, Medicaid spending has been growing more slowly than the dramatic health care cost increases in the rest of the economy.  For that reason, we have turned our attention there, to the broader question.  Everyone has a stake in that solution. And just as Massachusetts is the home of the nation’s most successful universal health care law, we are poised to crack the code on cost containment.  To get there, we are doing more to encourage integrated, whole person care: paying providers for the quality of health care they deliver, not just the quantity.  There are many good models being tried in the market today.  We are working on scaling them up and making sure the savings are passed along to businesses, families and government in the form of lower premiums.  (Footnotes omitted.)

(The unspoken subtext in the Governor's testimony, which focused on the Massachusetts Medicaid experience, is: Don't Tread On Me.  In other words, please let Massachusetts continue to go its own way instead of shifting gears to comply with the federales' vision of a health insurance exchange for years 1-3 of health reform implementation.  Cf. the Brown-Wyden bill, discussed in an earlier HealthBlawg post on Medicaid matters.)

The Governor's bill won't become law this year (or so I would think -- see the Governor's prediction, below), so we have a bit of a reprieve during which the actors on this stage can go off and learn their lines, so to speak -- i.e., get a better handle on a data-driven approach to pricing care.  The AG clearly doesn't think we can get there on our own: a big surprise in the AG's recommendations is the suggestion that we step into government price controls -- at least on a temporary basis (a return to rate setting for nongovernmental payors) -- in order to sweep out the market-based negotiated inequities that now pervade the system.

Update 6/28/2011: In response to questions from the HealthBlawger following his keynote address at the American Health Lawyers Association Annual Meeting yesterday, Governor Patrick averred that his views and the AG's are not as divergent as the popular press would have us believe (doth he protest too much?); and, notably, he predicted that the legislature will take up his bill in the fall, with action expected by the end of the calendar year.

Stay tuned for more news from the front lines of health reform here in Massachusetts.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting