Can Primary Care End the Pay-for-Service Model?
- According to a new report, the role primary care physicians play in the payment side of the health care landscape is becoming more important. The Affordable Care Act is expected to add 25 million primary care appointments annually, all of which will be looking for quality care at a lower cost. This gives primary care a unique power to put an end to fee-for-service practices.
Released by the UnitedHealth Center for Health Reform & Modernization and Optum Labs, the report focuses on solutions to help phase out fee-for-service models that will be enhanced by incorporating multiple health care teams, diverse pay models and technology. This is needed because nearly half of wasteful health care spending results from failures of care delivery and care coordination, as well as overtreatment. These can all be improved by moving away from the fee-for-service reimbursement model.
Primary care represents an estimated 6 percent to 8 percent on national health care spending which equates to $200 to $250 billion annually. Furthermore, it represents 55 percent of the 1 billion physician office visits each year. With an increase in insurance coverage, requirements for coverage of certain essential health benefits and the elimination of copayments for preventive services, more patients are seeking out primary care for medical issues instead of heading to the emergency room for unnecessary care. According to the report, an estimated 70 percent of emergency department visits by commercially insured patients in the U.S. are for non-emergencies.
With more patients relying on primary care, the payment method used has a bigger impact. There are several solutions making headway in replacing fee-for-service. These include medical homes, accountable care organizations and paying for value. These approaches challenge longstanding assumptions about the scale, pace, and intensity of change that are both possible and necessary.
“There is no single set of clinical, organizational, and financial models that successfully expands primary care capacity and improves service delivery,” the report reads. “Championing, deploying, and implementing these approaches — effectively and at scale — ultimately will require sustained efforts from policymakers, regulators, health plans, providers, and consumers.”
All of these systems do require an investment of time or resources to be successful. Value-based approaches rely on group practices and integrated delivery systems. This is important because scale is an important criterion for spreading the fixed costs of building care management and health care IT infrastructure, as well as spreading risk.
“While there is increasing participation in value-based payment models among primary care physicians, many practices continue to rely on a volume-based model for a substantial share of their revenue,” the report reads. “Some smaller practices may need financial support and technical assistance to acquire and implement the HIT infrastructure and practice protocols necessary to transition successfully away from a fee-for-service model.”
