Intended for healthcare professionals


Massachusetts proposes putting providers on budget to rein in healthcare spending

BMJ 2009; 339 doi: (Published 27 July 2009) Cite this as: BMJ 2009;339:b3033
  1. Bob Roehr
  1. 1Washington, DC

    A commission appointed by the governor and legislature in Massachusetts has called for reform of the state’s health policy in the next five years that would end payments for service, switching instead to a system that pays a fixed fee to cover a person’s care for a whole year.

    The aim is that by working within a set budget, providers would have to better coordinate patients’ care, with the hope that quality would improve and costs fall. The new policy will require the creation of integrated care, from the family doctor to specialists and hospitals.

    Massachusetts would be the first state to adopt such a “global payment” system and one that the Obama administration would watch closely, as it attempts to overhaul the national healthcare system.

    The concepts of global payment and integrated care are common in much of the industrialised world. In the United States they are embodied in health maintenance organisations and date from the 1930s. Kaiser Permanente is the largest of these groups, with about nine million patients, but only a small percentage of US residents are enrolled in them.

    The state of Massachusetts was going to lead the way on health reform in the US when it introduced new laws in 2006 to require everybody to purchase health insurance. The state subsidised the purchase for people with low incomes, and promised to rein in the ever expanding cost of health care. Under the programme medical providers continued to be paid on the fee for service basis that is traditional in the US.

    However, expanding coverage to uninsured people without controlling costs is bankrupting the health insurance system in Massachusetts.

    Costs have grown by 8% a year; primary care physicians are in shortage; and newly insured people have long waits to see a doctor (an average of 50 days). In 2008 35% of family doctors were not accepting new patients, up from 25% in 2006. And expensive hospitalisation is overused.

    In August the state is scheduled to eliminate benefits for 30 000 legal immigrants who have been in the country less than five years.

    Electronic medical records will be integral to managing the proposed new system of healthcare provision.

    However, most US family doctors operate alone with minimal support staff or in small practices of fewer than five doctors. And a 2008 national survey found that only 13% of ambulatory care doctors have any electronic medical records; just 4% have systems sophisticated enough to manage that task.

    Mario Motta, president of the Massachusetts Medical Society, acknowledged the need for better coordination of patient care and the challenges that these recommendations represent. He said, “Very few physicians could succeed under this new system today, and their readiness to make such a transition is highly variable across the state.”

    Implementing the changes will require significant reorganisation, training, and investment in the way that medicine is practised in Massachusetts. Dr Motta said that the government and insurance companies will have to help doctors in making this transition.

    The unanimous recommendations of the 10 member commission will require action by the state legislature and the governor. That leaves ample opportunity for special interests to plead their case.


    Cite this as: BMJ 2009;339:b3033

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