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MassHealth's bundled payment approach: A "baby step" toward broader reform
An innovative pilot program in Massachusetts will soon be implemented, with the goal of improving the care of children with asthma, reports David Polakoff, MD, chief medical officer of MassHealth, the Massachusetts Medicaid program. "We hope to implement this as soon as possible," he says. "This is an idea that has been kicking around for awhile; it has been tried in some small-scale pilots."
One reason MassHealth chose to focus on this particular population, says Dr. Polakoff, is that children with asthma have been extensively studied. "They have been found to have high use of ERs and inpatient stays that appear to be avoidable," he says. "In other words, if there were a way to better control their asthma, they wouldn't need to be admitted or go to the ER."
Dr. Polakoff says that avoidable ER visits and inpatient admissions are "bad all around. It is bad for [the child's] health, it's disruptive to families, it's excessively expensive for payers."
Though a number of similar pilots exist, Dr. Polakoff says, MassHealth looked most closely at a grant-funded pilot done at Children's Hospital of Boston. "They studied a small population, essentially in one neighborhood," he says. "And [the results] were very positive. It reduced the use of ERs and the hospitalization rate."
Interestingly, says Dr. Polakoff, the pilot also resulted in some positive nonmedical outcomes, with fewer missed days of school for children and fewer lost work days for parents. Those both went down significantly, according to internal data from an evaluation done by the hospital. Overall, says Dr. Polakoff, the evidence was "convincing and powerful enough for us to want to replicate it on a larger scale."
Program pays for itself
The size of the pilot will depend on what MassHealth was allocated in the state's budget for FY 2011, says Dr. Polakoff. "There was a budget line for this pilot; we'll go as large as we can go within that budget," he says.
Dr. Polakoff says that one goal is to replicate the successful results of the Children's Hospital pilot with pediatric providers in other parts of the state. "We are interested in insuring that there isn't some magic ingredient that Children's has and no one else has that it's the program itself, not the provider," he explains.
Dr. Polakoff says that he expects buy-in from the provider community, both because their pediatric patients will be getting better medical care and because the pilot will pay for in-home services that are not otherwise covered by most payers.
Community case workers and asthma educators will do home visits, says Dr. Polakoff, to educate the child and the parents on self-management of asthma. "There is a whole program to teach them to take better care of themselves," he says.
The case workers will educate children and families on self-management, the proper use of preventive medications, and the importance of adherence to medication regimens, says Dr. Polakoff, as well as occasionally providing HEPA filters for vacuums and other techniques to reduce allergens in the home.
"The cost savings will come from decreases in ER visits and hospitalizations," says Dr. Polakoff. "The pilot program suggests that this can pay for itself, and perhaps more."
The bundled payment will cover standard services, such as office visits and spirometry testing, and in addition, the in-home visits, which are not currently paid for. "So, the bundle will be larger than the cost of the usual services," says Dr. Polakoff. "That is the investment."
The fact that there is an up-front investment required may deter some states from pursuing a similar approach, notes Dr. Polakoff. "I think that is always a limiting factor, until a wider and more rigorously studied pilot demonstrates that it's self-funding," he says. "As soon as you prove that the ROI is real, then you can stop worrying about that."
Dr. Polakoff notes that the pilot was conceived before the passage of the Patient Protection and Affordable Care Act (PPACA), and is part of the broader approach that Massachusetts is taking for payment and delivery system reform.
"It is a baby step toward payment reform," he says. "It really ties in with the governor and the secretary [of Health and Human Services]'s commitment to moving toward a more global reform of our payment system. This is one small step. It is one bundle for one population."
Providers get more control
The bundled payment approach, says Dr. Polakoff, is a way of giving providers more control over the way health care dollars are spent. "We are giving them a sum of money to care for all aspects of one disease in one patient," he says. "If that works, and we expect it will work, it's a small step away from the 'widget' approach to paying for health care."
Providers would be paid to take care of patients in a broader sense, explains Dr. Polakoff, rather than paid to perform a particular service.
One challenge that Dr. Polakoff foresees for providers is identifying community case workers to work with. "They don't exist everywhere, so they may have to either find them or create linkages with providers that they don't currently work with," he says. "There will have to be a little bit of work done by the providers."
The hope is to distribute the pilot at least somewhat evenly geographically, says Dr. Polakoff, to avoid being "Boston-centric." "That is something we are going to have to look at," he says. Dr. Polakoff notes that most children with asthma anywhere in the state have a pediatrician affiliated with a hospital that provides pediatric care.
Once a population of participating asthmatic children who are covered by MassHealth is identified, providers will be sent a list of children in their practice who are part of the program, says Dr. Polakoff, so that asthma educators can begin doing outreach.
"We think of bundled payments as transitional toward global payments," says Dr. Polakoff. "This is a step in that direction."
If MassHealth is successful with this patient population, says Dr. Polakoff, the approach may be expanded to additional populations. He notes that there are numerous opportunities in the PPACA for trials of payment and delivery system reforms.
"For many of them, [the Centers for Medicare & Medicaid Services] hasn't even released the details of the opportunities yet," says Dr. Polakoff. "I am sure some of them will cover bundled payments, and we will be looking carefully at those."
Contact Dr. Polakoff at (617) 210-5322 or David.Polakoff@state.ma.us