Stop me if you've heard this one before when it comes to healthcare innovations, Massachusetts continues to be a step ahead of everyone else. Whether implementing the nation's first individual health insurance mandate or successfully launching a health benefits exchange, Massachusetts has beaten everyone else to the punch line. The latest wrinkle is a move away from fee-for-service and toward bundled or global payments, which was the subject of an extensive article in the Nov. 13, 2012, edition of The Los Angeles Times.

When it comes to healthcare innovations, Massachusetts may resemble Owen Wilson's character from the first Meet the Parents movie. Wilson, who played the ex-boyfriend of Ben Stiller's finance, was the perfect guy who could do no wrong, often touted his strong portfolio and noted that in his spare time he dabbled in carpentry because if you're going to follow in someone's footsteps, who better than Christ. Needless to say, Stiller's character felt it hard to measure up a feeling some states must have when Massachusetts, reform efforts continue to be exalted by media outlets.

That's not to say Massachusetts hasn't had challenges and setbacks when it began moving down this path with its 2006 near-universal healthcare law. But as the nation prepares for full implementation of the Affordable Care Act, Massachusetts payment reform efforts are receiving justifiable attention. The state passed a payment reform law in August 2012 which among other items mandated that the state's Medicaid program and employee healthcare program transition to new global payment methodologies.

Global payment has already been underway in the private market, as the state's top insurers have been working to sign provider groups to such contracts. Quality metrics and significant rewards for providers able to improve patient health help guard against rationing of care. Blue Cross Blue Shield of Massachusetts, which has been pushing its global payment contracting method (the Alternative Quality Contract) since 2009, also measures providers on patient satisfaction scores. BCBS officials say AQC providers now significantly outperform providers in its FFS network on quality and outcome metrics. This is particularly true in managing chronic illnesses, doing preventive care screenings and treating depression.

One challenge, however, stems from the culture in Massachusetts, where HMO plans dominate but have open-access features, similar to what PPOs offer. That puts the onus on primary-care physicians to convince patients to stick with the medical team's network, where their care can be coordinated, and limit the number of referrals made to more expensive systems. Signature Healthcare officials have said referrals to pricey teaching hospitals in Boston are down since its time operating under the AQC. In the LA Times article, primary-care physician Damian Folch, M.D., notes the global payment contracts have been positive for his practice and patients, despite some initial resistance to a community hospital referral versus a Boston teaching hospital, for instance.

As Massachusetts continues down this road, understanding the impact of global payment will be vital to whether these kinds of arrangements stay the new norm. The rest of the country should be paying attention.

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