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Can Changing How Doctors Are Paid Lower Healthcare Costs In Montana?

Governor Steve Bullock announcing a new healthcare reform initiative in Missoula Monday at Western Montana Clinic.
Eric Whitney
Governor Steve Bullock announcing a new healthcare reform initiative in Missoula Monday at Western Montana Clinic.

Montana has been invited to participate in a new phase of health care reform that some big players in the healthcare industry here say should save significant money. Governor Bullock made the announcement at St. Patrick Hospital in Missoula Monday morning.
Montanans are still paying too much and getting too little in return when it comes to healthcare.

The reform program Bullock announced is supposed to help fix that by changing the way primary care doctors get paid.

Dr. Pam Cutler is in charge of a lot of primary care doctors, as president of Western Montana Clinic in Missoula.

"We really believe that programs like this are the innovative things that are going to make a difference in improving healthcare."

They’re going to do it, Cutler says, by paying clinics like hers based on how healthy they can keep their patients. Right now, doctors mostly get paid on a fee-for-service basis. That means the more tests and procedures they order, the more they get paid. This new system, Cutler says, rewards them for efficiency in helping people feel well.

"Our risk that we’re willing to do is to say, we’re betting that we can take better care of these patients, and we’re willing to say we’ll get paid less if we don’t."

The new payment system is a collaboration between big government programs and private insurance companies. On the government side, Medicare and Medicaid  are offering the new payment model, along with private insurers Blue Cross Blue Shield of Montana and PacificSource. The willingness of private insurance companies to try the new payment system here is a reason that Montana is one of 14 states where the partnership with Medicare and Medicaid is being offered.

"The idea is that you’re incentivizing the right behaviors," said Dr. John Griffin, who works for Blue Cross Blue Shield of Montana. "Instead of doing more, more, more you’re incentivizing doing the right thing, at the right time at the right price."

Health insurance companies like that idea – not paying for unnecessary medical care is a money-saver for them. And the new payment system is supposed to protect patients from being denied necessary healthcare by having a set of measurements to indicate whether an overall patient population’s health is going up or down.

There’s evidence that it works, says Jessica Rhoades, with the state health department.

"Some of the outcome measures include reducing emergency room visits, reducing unnecessary hospitalizations. We know those are key cost drivers as well," said Rhoades.

Rhoades says a pilot of the new payment system in Oklahoma shows real, significant savings.

But Benjamin Miller, Director of the Farley Health Policy Center at the University of Colorado medical school says it’s not automatic.

"There’s preliminary evidence that indicates that it looks like it does save some money," Miller said in a phone interview. "However, I think with any primary care transformation effort, the devil is in the details, and we know that changing practice is hard. It takes a substantial period of time."

And that means, Miller says, if Montana’s partnership with the federal government to try to reduce healthcare spending does work, and does save money, it’s hard to say how that might translate into lower prices for healthcare or health insurance for the average Montanan.

"Well, that’s the goal, right?" said Miller, "Healthcare has grown uncontrollably, its cost, and how much we spend. We know the United States spends more than any other country in the world on healthcare, and if you look at the bottom line for why that is, it's how much we price particular procedures, particular payments for clinicians; it's all about price. So does this touch on price? The answer to that is really going to depend on each individual market, and how they negotiate what they're going to be doing with their payers."

At the announcement of the availability of the new healthcare payment system in Montana, neither the state government nor Blue Cross Blue Shield representatives would predict exactly how cost savings from the system would filter down to the consumer level. Nor did the executives of Western Montana Clinic or St. Patrick Hospital. Miller says that’s hard to do because of the complexity of the American healthcare system, and that no one should expect any one change in it to be the cure for high prices.

Miller agrees that the new payment system looks like a step in the right direction for Montana.

Now that it’s available, hospitals, clinics and doctors offices can apply to be part of it. More than a hundred have already indicated at least some interest in doing so. The health plans willing to participate here cover more than half of all Montanans who have health coverage.

Eric Whitney is NPR's Mountain West/Great Plains Bureau Chief, and was the former news director for Montana Public Radio.
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