Global payment system on the horizon nationally, expert says

Healthcare reform legislation in Massachusetts, first enacted by the commonwealth's legislature in 2006 and revised in 2008, contains payment reform principles that likely offer insight into national reform efforts.

"What has happened in Massachusetts will happen in the rest of the country," said Craig Schneider, director of healthcare policy for the Massachusetts Health Data Consortium on Monday. He spoke before an audience of healthcare providers and payer representatives at the 2nd Annual Healthcare Payment Solutions Summit & Expo in Chicago.

"Payment reform is imminent," Schneider added. "Massachusetts decided to go with a global payment system, and I think that's where we're headed nationally."

Schneider also noted that Massachusetts' plan for a global payment system includes accountable care organizations, pay-for-performance, a focus on primary care via the medical home and strong and consistent risk adjustment – all elements that will ultimately be included in national payment reform.

He dismissed predictions that consumer-directed healthcare is the payment wave of the future, calling it a "niche" solution that would never rise above 10 percent to 20 percent of total reimbursement dollars.

Cost controls – and perhaps rate regulation – lie in Massachusetts' future, he said, and maybe the nation's.

"Unfortunately, high cost growth is threatening the viability of the state's reform efforts," Schneider said. "Access to primary care is declining – the wait for an appointment now averages 50 days statewide."

In early July, the Massachusetts legislature decided to delay comprehensive payment reform for at least another year.

Speculating more broadly on the implications of payment reform, Schneider said the small physician practice sector would likely move toward greater consolidation, although ACOs would grow in some parts of the United States.

"In another five to 10 years, practices of one and two physicians are going to be like dinosaurs," he said.

The summit continues on Tuesday and Wednesday.