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Harvard Pilgrim seeks ’global payments’

Boston Business Journal, August 12, 2010

Harvard Pilgrim Health Care will move towards “global payment” contracts with hospitals and doctors, CEO Eric Schultz said in an interview. Global or “bundled” payments reimburse healthcare providers per patient, or per medical episode, rather than per service. Proponents of global payments say that it discourages unnecessary tests and puts the focus on preventive care and healthy outcomes, rather than on expensive hospital stays. “We have contacted our 25 largest provider groups to open up contracts (to negotiate for lower rates), Schultz said. “We’ve started a conversation about moving away from fee-for-service payments to global payments,” Schultz said. This payment system was recommended by Gov. Deval Patrick’s Health Care Payment Reform Commission last year. However, there has been little movement on the issue since then.