New Report Finds Massachusetts Health Payment System Isn’t Saving Money

One more silver bullet for reducing the seemingly inevitable rise in health care costs has been called into question.

Yesterday, Massachusetts Attorney General Martha Coakley released a study finding that the so-called “global payment” system instituted in 2009 has not saved health care costs. This payment system provides a per-patient monthly payment rather than making payments in the more traditional fee-for-service way.

Her press release says “A shift to global payments is unlikely to control rising costs without also addressing historic health care provider price disparities and encouraging consumers to make prudent health care purchasing decisions.”

AG Coakley said that large doctors groups were still able to negotiate more favorable payments.

Further, Coakley urged the state administration to place temporary caps on the prices hospitals and physicians can charge insurers.

Health care providers and insurers say not enough time has elapsed for the new payment system to yield savings. “It is far too early to judge their potential impact,’’ the Massachusetts Hospital Association said in a statement.

To read more:
Press release, AG Coakley, June 22, 2011
Full report from AG Coakley
Boston Globe, June 23, 2011
Boston Business Journal, June 22, 2011