As Massachusetts led the nation in tackling access to health care in 2006, we are leading the way on the cost question, too. Numerous state agencies and The Boston Globe have reported on the record low cost growth that has occurred in Massachusetts since 2009. Nationally, the rate of cost increases has been the lowest since these figures began to be published in the 1960s.
How is Partners doing its share? In 2006, Massachusetts General Hospital (MGH) began what became the most successful test of a new approach to caring for complex, chronically ill Medicare patients. The idea was to improve care and lower costs through better care management, earlier intervention and tracking. For every dollar spent, the program saved $2.65. This became the model for Partners' system-wide population health management initiative. Today, building on this earlier work, Partners is one of just 19 Pioneer Accountable Care Organizations (ACO) in the nation and has successfully lowered health care cost growth among approximately 70,000 Medicare patients. This effort has achieved $39.2 million in savings at Partners. Other Boston-area providers, including Beth Israel, Mt. Auburn, Steward and Atrius have also had success with this approach – statewide, the savings so far are $141 million over three years.
Partners also has entered into alternative payment models – designed to control costs and improve care – with the three major Massachusetts insurers and just became one of the first health systems in the state to take on more responsibility for the cost of care with Blue Cross Blue Shield. In 2011, we renegotiated existing contracts with local insurers and gave back about $400 million to the marketplace to help alleviate pressure on consumers. Since then, our prices have risen at the same rate as inflation.
More remains to be done. Population health management has not yet reached scale and achieved its potential for cost control and care improvement. After the initial investment, the electronic medical record and administrative systems that all providers are implementing have the potential to guide an even more sophisticated cost reduction effort. And there’s more to learn about waste in the health care system – so that practical cost reduction decisions can replace the rhetoric about waste. It’s an ambitious agenda but one Partners is committed to achieving.