Saturday, April 13, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, July 31, 2012
HMSA Private shared-savings deal puts half of future raises at hospital system at risk
By Selected News Articles @ 4:15 PM :: 6547 Views :: Energy, Environment

Private shared-savings deal puts half of future raises at hospital system at risk

The Hawaii agreement, which will affect physician compensation, is considered a significant shift away from fee-for-service payment.

by Emily Berry,  American Medical Association,  July 31, 2012

A contract between Hawaii’s largest insurer and its biggest health system could prove a bellwether for contracting in other states, significant because so much of the health system’s payment — and compensation for its physicians — will depend on its clinical quality scores and the degree to which it can cut costs.

The shared-savings agreement between Hawaii Medical Service Assn. and Hawaii Pacific Health puts 50% the hospital’s annual pay increases over the five-year contract term dependent on achieving both quality improvement and cost savings thresholds.

HMSA President and Chief Operating Officer Mike Gold said he sees the arrangement as a model for payers and hospitals outside Hawaii that are dealing with the same dilemma: how to improve quality while cutting costs.

“The whole health care system and country will need to find a way out of this problem we’re in,” he said. “We think we have a good solution.”

Hospitals and payers across the country are moving to adopt shared-risk or shared-savings contracts like those authorized for Medicare under the Affordable Care Act. When large payers and hospitals adopt them, everyone is watching, said Carol Grelecki, a member of the New Jersey law firm Brach Eichler.

“The pressures are there to get involved in these,” she said. Adoption “is going to turn on what the experiences are with these original ones.”

The scale of the at-risk pay under the Hawaii agreement is steep compared with private shared-savings models adopted in Massachusetts, another bellwether state in shared-savings agreements. The Alternative Quality Contracts that BlueCross BlueShield of Massachusetts introduced in 2008 included guaranteed pay increases to account for inflation, and a potential 10% bonus payment in recognition of clinical quality scores.

The Hawaii agreement will cover Hawaii Pacific’s four hospitals, 49 outpatient sites and care provided by its 1,300 affiliated physicians. The arrangement takes effect in 2014.

Gold said the intervening time will give Hawaii Pacific a chance to ramp up some of the changes it will have to undergo to make the new shared-savings model work. Meanwhile, Gold said the two sides will finalize similar contracts that will cover Medicare and Medicaid patients.

The two sides’ current contract includes “pay for quality” as part of HMSA’s transition away from fee-for-service payment. The new contract will keep those elements but will include shared savings so the more money Hawaii Pacific saves, the more HMSA will pay.

“It’s a step on the road toward a full ACO, although I’m not sure what a full ACO is anymore,” Gold said. “It’s been defined so many ways.”

HMSA’s payments to physicians already are partly dependent on HEDIS scores and other quality measures, but physicians’ compensation is likely to become even more dependent on quality scores and cost savings, Ken Robbins, MD, Hawaii Pacific’s chief medical officer and executive vice president, wrote in an e-mailed statement. Hawaii Pacific employs 350 physicians.

Gold said the health insurer and hospital system were able to work out the agreement because of a shared intention. “Support for the physician-patient relationship is the key to making the health care system work,” he said. “Our goal is to do everything we can to support that relationship.” He said he expects that all of HMSA’s contracts will eventually include pay-for-quality and shared-savings elements.

If the contract does not work as planned, HMSA and Hawaii Pacific would share in the financial losses. Gold said patients will at least not be any worse off than they are today in terms of cost and quality of care.

Both sides have every incentive to make sure the shared-savings model works, he said. “There is no contingency plan, except to go back to the way we were, and no one wants to do that.”

 

 

 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT