Healthcare Payment Reform is Critical to Improving Primary Care

May 18, 2021 - High-quality primary care implementation requires significant healthcare payment reform, expanded telehealth capabilities, and team-based care, according to a recent report from the National Academies of Sciences, Engineering, and Medicine.  

According to the report, 85 deaths per day are associated with the declining workforce in primary care. Compensation in primary care is typically lower than that of specialty care. The study suggests increasing incentives and compensation in order to encourage more medical school graduates to consider primary care as a viable option. 

In addition to a shortage of clinicians, primary care visits have declined significantly, in part due to COVID-19. Primary care practices were not included in the initial COVID-19 relief packages, and a 2020 survey found that half of primary care practices were concerned about having enough cash flow to keep their practices afloat. 

“The strength and quality of primary care need to be a public priority. Primary care serves people throughout their lives, for everything from school-mandated health checkups to managing multiple chronic conditions, but it remains inaccessible to far too many,” said Bob Phillips, director of the Center for Professionalism and Value in Health Care, American Board of Family Medicine, and co-chair of the committee in charge of the report, in a press release. 

“If we increase the supply of primary care, more people and communities will be healthier — and no other part of health care can make this claim. For this reason, similar to public education, primary care should be a common good, not a commodity service that needs to compete in the marketplace.” 

READ MORE: Fewer Primary Care Practices Struggling A Year After COVID-19

The report urges both public and private payers to transition from a fee-for-service payment model to hybrid models that promote better health outcomes, eventually shifting into value-based care as the default payment model. CMS should increase payment rates for primary care physicians by 50 percent, according to the report. Identifying overpriced procedures and services in order to cut costs would make this feasible.  

In addition to healthcare payment reform, the report proposed policy changes and a reallocation of research funds and resources dedicated to primary care. While primary care research currently accounts for less than 0.4 percent of the National Institute of Health’s (NIH) budget, the report proposes creating an Office of Primary Care Research at NIH to study primary care improvements.  

In addition, they recommend that the HHS form a Secretary’s Council on Primary Care, making it the first government agency to oversee primary care. The council would be tasked with defining what high-quality primary care means and locking down metrics that focus holistically on well-being and health equity rather than payment.  

“It’s time we invest in health care as a lifelong relationship, rather than as a series of transactions. Primary care has the potential to improve health and health equity for all of society, and the way we pay for it should reflect that,” said Linda McCauley, co-chair of the committee that wrote the report and dean of the Neil Hodgson Woodruff School of Nursing at Emory University. 

“If we are to recognize high-quality primary care as a common good, it requires accountability structures, which this report clearly outlines.” 

READ MORE: Primary Care Spending Declining Despite Well-Known Health Benefits

Additional recommendations include supporting community-based training programs and encouraging the creation of interprofessional care teams. Increasing HHS support for training programs and opening new health centers in underserved regions would improve overall health equity, the report suggests. Improving the usability of health technology and expanding telehealth will also go a long way toward making primary care practices run smoothly. 

“As the United States contends with the effects of the COVID-19 pandemic, health inequity, and a long-overdue reckoning of institutional racism, transforming primary care is essential to meet the moment,” said Victor J. Dzau, president of the National Academy of Medicine.  

“This report presents an opportunity to reimagine primary care so it reflects people’s needs and values, is supported with the right clinical and financial resources, and remains grounded in equity and social justice.” 

The Primary Care Collaborative (PCC) announced its support for the report in a recent press release, stating that it aligns with their efforts to improve population health through primary care reform.  

In its own 2020 report on primary care spending, PCC found that primary care spending accounted for 4.67 percent of the total national commercial health care spending across all commercial payers in 2019, compared to 4.88 percent in 2017.