Wednesday, April 2, 2008

Massachusetts - Slowing Health Costs - The View from Boston

Three doctors from Partners HealthCare System – Drs. James Morgan, Timothy Ferris, and Thomas Lee – outline options for slowing health cost growth in the April 3 New England Journal of Medicine.
Brigham and Women's Hospital and Massachusetts General Hospital founded Partners HealthCare in 1994. Partners is a vast integrated health care system. The system includes hundreds of primary care and specialty doctors, five community hospitals, a psychiatric hospital, the two founding academic medical centers, specialty facilities, community health centers, and related health entities. In many ways, Partners dominates Boston’s health scene..


Here’s what the three doctors see as options to reduce cost growth.

1. Allow current situation to persist, an unthinkable solution.

2. Invest in effectiveness review bodies to maximize cost effectiveness.

3. Promote EMRs to yield to maximize computerized diagnostic support.

4. Standardize transactions to drive down administrative costs.

5. Back regional efforts to improve care at end of life.

6. Support prevention programs to enhance quality of life and worker productivity.

Potential of Options

And here’s what options the three doctors thought had the greatest and least potential.

Highest Potential

• Payment reform through capitation, case rates, or P4P –Capitation is limited by patient preference; case rates apply to only small numbers of patients; and P4P remains unproven value but is evolving.

• Effectiveness review of new drugs and technologies - May limit innovation and delay new products.

• EMRs - May reduce variation but will require time, resources, and cultural change.

• Improved care for chronic disease - Most promising but requires organized providers and payment reform

Intermediate Potential

• Restructured end-of-live care – Requires profound cultural change.

• Consumerism – Limited because it helps relatively well and not the chronically ill.

• Reduced administrative costs – May result in some savings, but reduces choice and innovation, and may lead to government intervention, delays, and reduced benefits.

Lowest Potential

• Malpractice reform – Needs improvement but will have limited effect on costs.

• Drug pricing reform – Will have modest cost effect, and will restrict innovation.

• Prevention – Not shown to reduce overall costs; may shift costs to Medicare

Rationing Options

• Indirect through fixed budget for all payers – Doesn’t fit American culture; requires large government role; and hasn’t succeeded in other countries

• Indirect through expanded consumer choice, restricted Medicare and Medicaid - Will present dramatic visible evidence of two class culture; and is not compatible with U.S. core values.


Boston’s three leading Partners doctors conclude: Move away from clichés fitting political beliefs and grapple with true effectiveness and political realities. Have true dialogue during election year.

That’s the view from good old Boston,
The home of the Bean and the Cod,
Where the Lowells talk only to the Cabots,
And the Cabots only to God.
Where physicians from a leading academic center,
Pride themselves on being our economic mentor.
But where costs are highest in the land,
At least that’s where things now stand.


1. Morgan, J.J. et al, “Options for Slowing the Growth of Health Costs, “ NEJM, 358:1509-1513, April 3, 2008

2. City vs. City: When It Comes to Health Insurance Costs, Geography Matters. Press Release, December 21, 2006. Agency for Healthcare Research and Quality, Article says individual coverage for Boston worker, $867, is highest among U.S. cities.

3. “Health Plans Say Transparency is Two-Way Street, “ Boston Business Journal, March 28, 2008, contains this quote, ‘Massachusetts health care is the most expensive in the world and the premiums of the health plans reflect the cost of the care given,’ said Dr. MaryLou Buyse, a primary care physician, who is president of Massachusetts Association of Health Plans. “
“Health care spending per person in Massachusetts in 2006 was $9,662, compared with the national average of $7,256. MAHP statistics show health care spending here grew from $46.5 billion a year in 2002 to $62.1 billion in 2006 -- an increase of 33 percent. Overall premiums in the state have been rising between 8 percent and 12 percent each year for the last several years. “

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