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House Approves Asthma Global Payment Pilot

House Approves Asthma Global Payment Pilot

April 29, 2010

Asthma is the leading cause of emergency room visits and hospitalizations for children covered by Medicaid. The majority of these are preventable and now we are one step closer to a substantial reduction in these incidents. On Tuesday the House approved a budget amendment that will help providers and families better manage pediatric asthma.

The amendment directs the Office of Medicaid to establish a global payment program for high-risk pediatric patients enrolled in MassHealth. This approach will be piloted in communities with high rates of uncontrolled childhood asthma. The program will be specifically designed to prevent unnecessary hospital admissions and emergency room utilization. As stated in the amendment language, the global payment structure will encourage management tools such as “patient education, environmental assessments, mitigation of asthma triggers, and purchase of necessary durable medical equipment.”

The amendment can be seen as pilot of our payment reform proposal. The online magazine Slate asked today, "Why do insurers ignore the most promising way of cutting health costs?" The article describes the experience of Children's Hospital Boston in empowering families to work on controlling asthma:

Last November, researchers from Children's Hospital Boston reported interim results from a community-based asthma program that used case managers, home health aides, and outreach to coordinate the proper steps for children with severe asthma. Within six months, emergency-room visits dropped by 60 percent. Hospitalizations fell by 80 percent and stayed down for a year. And yet, according to a legislative liaison from the hospital, "in the current traditional health care system, these kinds of workers"—such as home-visiting nurses and case managers—"are not providers that have been able to bill or get any payment for their services."

Why don't doctors do a better job of matching the right patients with the right procedures for treatable problems like asthma? Observers tend to blame this mess on our "fee-for-service" payment system. The more doctors do, the more they are paid; rather than rewarding quality, insurers pay for quantity. If a hospital's doctors do a terrible job, necessitating longer and more frequent hospitalizations for a child, they get rewarded with more money. That's why many reformers believe the solution is to "bundle" payments: Insurers would pay a fixed, up-front cost for each particular health problem—like asthma—and let the hospital and caregivers determine the best way to use the money to deliver quality care. Bundling could save money, improve care, and encourage innovation by health providers.

In addition to improvements in prevention and quality of care, the global payment program is expected to reduce costs and pay for itself within two years.
-Criselda Ruiz