Will a Move Away from Fee-for-Service Control Health Costs?

Paying doctors for every test and procedure creates an incentive to do more tests and procedures. But finding an alternative payment system that works has proved tricky.

In Massachusetts, where rising health costs are compounded by the state’s universal health-insurance policy, the push is on to find an alternative to the fee-for-service system to help rein in costs. An imminent deal will be a big move in that direction, the WSJ reports this morning.

The deal, between the state’s Blue Cross Blue Shield and a health system called Caritas Christi, will change the way the health system is paid for treating some 60,000 patients. Rather than being paid for every procedure, the system will be paid a fixed fee to take care of people whether or not they get sick. And they’ll be paid a bonus if they meet certain targets, such as keeping patients’ cholesterol low and lowering the rate of blood clots and pneumonia after surgery.

Capitation reborn? If this didn’t work the first time, why do we think it will work this time? The FFS model is broken… and expensive— no questions. But going back to a system of capitation is not the answer. The answer is NOT going to come from the Insurance industry… they will protect their shareholders, their profits and their top line salaries.

As Dr. Jay P says... “The faster we can pull our money out of the traditional health insurance game and start spending that money on purchasing healthcare as we need it, the faster the sick care industry will fall. Become true consumers by purchasing high deductible, catastrophic plans and watch what your money will buy you. Put the difference you save in monthly premiums in a bank account and build a buffer. Invest it and make interest on that money for when you get old and your health fails. Stop throwing it away to monopolies who care nothing about you and your health.”

Does this work for everyone…perhaps not. Will it control costs… you betcha!

What are your suggestions?


About hjluks

A busy Academic Orthopedic Surgeon, Digital Strategist, Chief Medical Officer and father... intently and efficiently navigating the intersection of Social Media and Health Care.
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4 Responses to Will a Move Away from Fee-for-Service Control Health Costs?

  1. healthblawg says:

    The BCBSMA “alternative K” has been promoted for several yrs, but hasn’t gotten many takers. Yes it is capitation redux http://j.mp/7WervD but the Commonwealth is working to expand on this concept and promote payment reform as the second leg (cost control) of the three-legged stool of health reform (access, cost control, quality improvement) http://j.mp/4R5BmC — this seems to me to hold more promise, and is not entirely reliant on a wholesale move to a HSA-HDHP system which, as you have noted, may make sense for some folks, but hasn’t really caught on in a big way yet.

  2. Howard Luks says:

    Thanks David!!  howard j luks md m. 914.715.9598  |   w.  914.789.2735www.hjluks.posterous.com  |   http://www.howardluksmd.com iMedExchange Chat Google Talk: hjluks Skype: hjluks The Orthopedic

  3. 2healthguru says:

    Agree with the cap 2.0 revisit critique; yet there were lessons learned and worthy of reconsideration/carry forward; physician culture is driver!

  4. Natalie Hodge MD says:

    Nice Post and eloquent comments by Jay here.. Consumer transparency is the ultimate controller of price, direct practices combined with high deductible plans halt rise of costs in their tracks. Personal Medicine Network is committed to assembling infrastructure to proving cost reductions (80% from my direct practice) quality, patient satisfaction, over time and across our network. We are finding more and more academic institutions, as well as individuals we’ve come in contact through twitter and social neworks are taking interest in not only the customer service aspects of house calls, but the potential to slice and dice our data over time ( 5y) and looks at quality measures as well. Open invitation to Obama here to explore a pilot utilizing our platform in a national health pilot. Must have backup plan to our current medicaid/medicare disaster. Someone please forward on to the Oval Office, Please. Natalie Hodge MD FAAP Medical Director Personal Medicine http://www.personalmedicineinternational.com

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