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In this episode, family physician Jonathan Staloff and internal medicine physician Joseph H. Joo join us to discuss the challenges and opportunities in reshaping health care systems. Drawing from their book, Reshaping Health Systems: What Drives Health Care and How You Can Change It, they delve into the complexities of balancing patient priorities, chronic disease management, and systemic barriers like the fee-for-service model. Together, they share actionable strategies for improving care delivery and fostering meaningful reform.
Jonathan Staloff is a family physician and Joseph H. Joo is an internal medicine physician. They care co-authors of Reshaping Health Systems: What Drives Health Care and How You Can Change It.
They discuss the KevinMD article, “How fee-for-service shapes your doctor’s decisions.”
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Transcript
Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today, we welcome Jonathan Staloff and Joseph Joo. Jonathan is a family physician. Joseph is an internal medicine physician. They are coauthors of the book, Reshaping Health Systems: What Drives Health Care and How You Could Change It. And we’re going to talk about an excerpt from that book, “How Fee for Service Shapes Your Doctor’s Decisions.” Jonathan and Joseph, welcome to the show.
Jonathan Staloff: Thank you so much, Kevin. Really glad to be here.
Kevin Pho: All right, let’s start by briefly sharing each of your stories and journeys. So, Jonathan, why don’t you go first?
Jonathan Staloff: Yeah, really happy to be here. So I started college in 2010, which was a time, of course, where the Affordable Care Act was being debated. And I knew I wanted to become a physician, but I realized I knew absolutely nothing about U.S. health care. So I took a health care course my very first year of college called “Health Care in the U.S.,” which completely changed my career trajectory and helped me appreciate that I knew I wanted to be a practicing clinician who also worked to actively reshape and understand health systems. And so I became a public health major and did a master’s in population medicine during medical school. And since then, I’ve tried to find a way to wed my interest in clinical medicine as a practicing primary care clinician in family medicine, while also actively working to research and advocate for changing the way our health care system is structured. Part of that, of course, has been the writing of this book, which we’re both really excited to share.
Kevin Pho: All right, excellent. Joseph, just briefly share your story journey.
Joseph Joo: Absolutely. Very similar. First of all, thanks for your time this morning. Great to be here. Similar. So I had this dream of wanting to be initially a surgeon, somehow ended up being an internist by training, but along the way, I quickly realized, just like Jonathan and Josh, that learning clinical medicine was only really one aspect of providing the best care to patients and their families. And so, I think throughout my training and throughout my time as a practicing physician, I’ve tried to ask and peel back the layers of what is it that really gets to the core of me doing my best to provide care. And I think that was one of the genesis points of how the three of us kind of bonded together to write the book that we’re excited to share about today.
Kevin Pho: Excellent. We’re going to talk about that excerpt from that book, “How Fee for Service Shapes Your Doctor’s Decisions.” So, Jonathan, for those who didn’t get a chance to read your excerpt on KevinMD, tell us what it’s about.
Jonathan Staloff: First off, thanks so much for sharing the excerpt, and I want to encourage everybody to take a look. This is the excerpt that opens our book. And so part of the inspiration for us to write the book was thinking about how, much like how it’s important to understand the physiology of the cardiovascular system or the pulmonary system to understand the presentation of a patient clinically, it’s important to understand the physiology of our health care system. And so our book is broken into two parts. The first part—”What Drives Health Care”—is really trying to understand the physiology of our health care system.
Of course, I’m a practicing primary care family medicine physician, and one of the most important assets we have that is, of course, most limited is time. And so often, people are trying to understand why your time is so limited, why you need to prioritize the number of things you discuss in a particular visit, and why you can’t address every single thing for every single patient, every single visit. And really, that drives the time. But why is time so limited? It’s because of the way that we’re reimbursed.
So our book, for every single physiology element of the health care system—what we call a “systems factor”—introduces it with a continuous patient narrative throughout the course of the book. And the book opens, as does the excerpt, with this narrative coming for their first primary care visit with a new primary care clinician, and they have to prioritize what to focus on in the particular visit. And we uncover that the systems factor driving that is the way that ambulatory care is reimbursed through fee for service.
Once we land on that take-home point, we really dissect how did the fee for service system come to be. And so we go through the original form of reimbursement in Medicare, which was usual, customary, and reasonable. We uncover some of the challenges that arose from those early days of the Medicare system, then take a deep dive into the research that informed how the fee for service system came to be. And then we outline exactly what fee for service is right now and how relative value units, the driver of fee for service, is calculated.
That’s a lot of dry material, and we don’t want to just be a textbook that provides dry material; we want to make it real for people. So we explain how this system—though very good intentions might have created the incentive to have as many visits as possible rather than cover as much as you can in a given visit. In this article, in this excerpt, we focus on that content as well as the implications.
Kevin Pho: And Jonathan, just to follow up, like yourself, I’m a primary care physician. But through that patient example, just give us a sense of how those time pressures from that fee for service system infiltrate a typical patient visit. Just give us an example.
Jonathan Staloff: Oh, sure. So I think it infiltrates a particular patient visit the moment you open your electronic health record and see that you have 30 patients to see that day, and you know some of those patients might be quite simple and some of them are quite complex. But the amount of time you have for a simple patient and the amount of time you have for a complex patient might be, gosh darn, the same. And so you are incredibly limited in what you’ll be able to accomplish for any particular patient.
For this patient, this is a complex patient whose journey we follow throughout the book. She wants to talk about possible new developing dementia, knee pain that could be arthritis-related, and uncontrolled diabetes. And you don’t even have the patient’s medical records. You would love to cover all those very, very important things, but on a visit where maybe the patient didn’t arrive on time and your next patient, the clock is ticking, and they’re waiting and will be upset if they don’t see you, and then you’re getting messages in your inbox and phone calls to the clinic that you need to address independent of your schedule, the fee for service system needs you to keep chugging along to see every single patient because that’s how the doors stay open.
Kevin Pho: And Joseph, I’m an internal medicine primary care physician, and what Jonathan mentioned was completely reflective of what I do every day. Talk a little bit about how fee for service came to be or evolved to be what it is today, knowing that it really focuses more on production sometimes to the detriment of patients. How did we get to this point?
Joseph Joo: Yeah, great question. I think at the core of how fee for service came about was an incentive to try to make sure that people were adequately being reimbursed for the work that they were doing. Now, I think there’s a difference over time in valuing the work that was being done versus the outcome of the work that was being done. And I think we focused maybe, perhaps, a lot on the former, more than the latter. Gradually, there became this chasm of let’s do more, do more, do more, do more. And clinicians, including ourselves, were always trained to work extremely hard at what we do. If we’re trained to, let’s say, provide a certain procedure or a certain diagnosis and treatment plan, I think over time it just becomes naturally ingrained to do more, do more, do more. And I think the intrinsic motivation and the personalities of really, really hardworking physicians, the way we were trained, and the way we were, quite frankly, rewarded for our work, had the unintended consequence of maybe putting less emphasis on valuing the outcome more than the work itself. That, I think, is one of the things we try to point to in this chapter.
Kevin Pho: And Joseph, have you heard stories where that focus on relative value units and productivity has influenced physicians’ decision-making process?
Joseph Joo: Great question. I think in my day to day, when I think about practicing in the ambulatory setting, as well as the acute care setting, one of the things that I think about is, what is the quickest way to get the job done, provide the care for the patient? Sometimes that is taking a step back and kind of reopening the can of worms to say, this patient presents with a number of symptoms, let’s try to go through, individually, one through five, what makes the most sense—ask a ton of questions and try to do maybe not the most efficient or the treatment plan that I’m most comfortable with, but to try to uncover everything along the way.
Versus, as Jonathan alluded to, under the time pressure, knowing the things that I know and the things that I don’t, and knowing that in the back of my mind it kind of lurks: “Oh, this is the quickest way to treat this patient through the highest RVU that I’m familiar with, that the system incentivizes me to do.” I think I often, speaking for myself here, sometimes jump to a higher RVU treatment plan or a treatment plan that I know the hospital system or the health care organization that I’m a part of may value, that I do as part of the work and that, quite frankly, I’m measured on as part of the metrics with the system I’m a part of. So I think that’s in subtle ways, indirect and direct, how the RVU system influences the way I approach care.
Kevin Pho: And, Joseph, just for those who aren’t familiar with how physicians are compensated, talk to us about that influence of RVUs on compensation. Are physicians compensated in general for the more they do and the more patients they see?
Joseph Joo: Absolutely. For sure, depending on the health care system and the health care organization, there are variations throughout, but I will say for the most part a physician is reimbursed through multiple ways. There is what we might consider a base salary, and then a portion—sometimes a significant portion—of that work is integrated into how many procedures or how many patients, as Jonathan alluded to, how many visits he or she provides. If you’re a surgeon, I can assure you that someone doing 100 surgeries throughout the course of a period of time is going to get reimbursed or paid more than someone who does 10. So, for example, when it comes to knees, I have colleagues who tell me all the time that they get paid more to do 10 knee procedures or knee replacements rather than perhaps providing conservative treatment plans for chronic osteoarthritis in the knees over time. And so not only does the RVU system perhaps incentivize surgeons to operate more than provide conservative care, but in addition it incentivizes doing more procedures rather than fewer procedures, as well. So it is kind of a slippery slope that can occur over time.
Kevin Pho: So, Jonathan, we clearly articulated some of the detriments of the RVU system, not only on physicians, but on patient care. I know that there is a movement away from fee for service. We have value-based care, focus on metrics. Talk about some of the potential paths out of our fee for service morass.
Jonathan Staloff: Thank you so much for mentioning that, and that’s actually also a very big focus of our book, as well, where we take a deeper dive into understanding what even is value-based care, because that’s a term that means a lot of things to different people. And it’s important to at least have a primer so that we can have a shared vocabulary and understanding of what it means to do value-based care.
Broadly speaking, value-based care is, I would say, a movement to transition away from a fee for service—or volume-focused—infrastructure toward an infrastructure that rewards clinicians and health systems for achieving health outcomes at an affordable cost. And so the way that clinicians or health systems are paid can be different depending on the nature of the value-based payment model they’re participating in. One way might just be getting a bonus for achieving a particular type of health outcome—reduce people’s blood pressure, you get a bonus.
Another way of having a value-based payment model might be holding a health system accountable for the total cost of care, either for an episode of care, like a hospitalization or a procedure, or holding them accountable for the total cost of care over an extended period of time, like a year or two years, etc. If you reduce the total cost of care for that population in the episode or over the course of the year, you might get a bonus check where you share in some of those savings. Some consider that a shared savings payment. Another term for that is a reconciliation payment. Of course, in those models, if there’s an incentive to reduce the total cost of care, one might say there’s a potential unintended consequence of cutting needed care or giving lower quality care. Often, in these models, there’s a gateway where you have to achieve certain quality outcomes to even be eligible for these bonus payments.
Lastly, there’s completely shifting the pendulum away from fee for service: the notion of population-based payments—another term for that is capitation—where you give an organization just a per-member-per-month or per-patient-per-month or per-patient-per-year payment and say, “Here are the resources that you have to take care of this population. Have at it.” You don’t have to be based off a visit-based infrastructure but rather entirely based off, “Here are the resources you have for the year to take care of them. Go for it.”
Some of the tweaks there can be, “Let’s say I get 20 dollars to take care of a patient for a month.” Taking care of a 19-year-old with no medical problems might be very different than taking care of a 62-year-old who has multiple medical problems and social drivers of health challenges such as housing insecurity. In some of these models, that payment is adjusted based on their clinical and social complexity. This is an area that’s pretty new. Our health care system’s been experimenting with it over the last decade or so, but it’s still a pretty nascent science, I would say. There are a lot of different models out there, and this is really an exciting period to think about what is the best way to pay for health care, appreciating that there is no single best way, but maybe a combination of ways that meet the types of organizations and the types of geographies to better serve patients and communities.
Kevin Pho: And Jonathan, what do you think it’s going to take to make a meaningful move away from fee for service toward one of those other models you described?
Jonathan Staloff: Yeah, so I think it’s going to take a lot. For starters, one is I think there needs to be, on the part of clinicians, a sense of sincerity on the part of insurers—that insurers are actually trying to reshape the way we pay for health care to better support population health, rather than just holding clinicians and health systems accountable for another thing for the same amount of resources. We’ve iterated on different ways of paying for health care that often come with no more resources or maybe a penalty or more responsibility. And so I think there needs to be a sense of partnership where clinicians feel that payers and governmental organizations are authentically trying to help them deliver better care and give them the resources to do it. That’s number one.
Number two, the United States health care system is not one health care system; it’s a million different health care systems with a million different payers. In a given clinical day, I see patients from a number of different insurers, each with different incentives. So there needs to be multi-payer alignment, where everyone is singing the same or a similar tune. If 90 percent of my patients incentivize me to see more, more, more, more, but for 10 percent of the patients I’m in the world’s best, most population-health-aligned payment model, the incentives are just not there economically to care about that 10 percent enough to reshape the way we deliver health care. So there needs to be multi-payer alignment and a sense of true, authentic partnership between clinician health systems and payers.
Kevin Pho: And Joseph, just to jump on that, I was actually going to ask that same question. So do you think in order to get that multi-payer alignment, it’s going to take some federal policy movement in order for that to happen? Because independent of some type of federal regulation, do you see something like that happening where payers can get aligned on an agreed-upon payment system?
Joseph Joo: I believe so. It surely won’t be a panacea to have the federal government provide a one-size-fits-all or one-size-cure-all solution, but I think one of the themes that we actually highlight in the book is that often Medicare ends up being the trendsetter that commercial payers and other payers follow and adjust over time. And so I think, as Jonathan alluded to, a lot of the nascent programs and the payment models that have come out over the last decade-plus—since the Affordable Care Act—much of that, if not almost all of that, has been through the Centers for Medicare and Medicaid. And with the growing number of, I think, Medicare beneficiaries, and perhaps more importantly Medicare Advantage beneficiaries, I believe in the coming decades—I recently read that it’s projected to surpass traditional Medicare beneficiaries over the next several years and over the decades to come—there’s another emphasis on having Medicare really trial, study rigorously, implement, and set a really good example so that, as Jonathan mentioned, all the multi payers can look at the respective health care systems, the states that we all live in, and the settings that differ by region, and try to come up with an alignment that is specific to the region at hand. But I think a lot of that work, quite frankly, has to be done or set by the federal government, in my opinion.
Kevin Pho: We’re talking to Jonathan Staloff and Joseph Joo. Jonathan is a family physician. Joseph is an internal medicine physician. They are coauthors of the book, Reshaping Health Systems: What Drives Health Care and How You Could Change It. The KevinMD article is “How Fee for Service Shapes Your Doctor’s Decisions.” Now, I’m going to ask each of you just to give us your take-home messages to the KevinMD audience. Joseph, why don’t we start with you?
Joseph Joo: Absolutely. I am so thankful for the work that I’ve been able to do with Jonathan and Josh on this book. This book was a labor of love for all of us. It came together as a genesis for us as we really peeled back layers and learned things along the way that one may consider the hidden curriculum in medical education: “Why does something happen the way it does? Why are we so pressured to provide medical care in a certain way?” And we really wanted to provide or design a book that was serviceable to trainees and medical professionals at all levels, realizing that when we were coming through training not that long ago, a lot of these resources were scattered and not really consolidated at hand. So it was a passion of ours to try not to have one book cover all the topics, obviously, but to try to do it as comprehensively as possible throughout the specific settings of care.
Then secondly, we try to bring this out in a way that is most practical and easily approachable for clinicians at all levels, which is, again, as a byproduct of our training—we are so inclined or in tune with vignette-style learning, practice-based learning. So we open every single chapter with a clinical vignette to set the stage for how this applies to every clinician at hand during their day to day. And we really hope—and we provide at the very end of the book, part two—a lot of practical solutions or ways or interventions that clinicians can use in their respective health care settings. So we’re really excited to share this knowledge base, and it’s been a labor of love. We hope that many of you will enjoy it and be able to use it in your own ways.
Kevin Pho: And Jonathan, we’ll end with you. Your take-home messages.
Jonathan Staloff: First off, thank you so much for having us. It’s really a privilege to be here with you. So much of what Joseph said resonates with me. I would say that going through all of my medical education and training, for so many of my colleagues, we all appreciate that understanding the health care system is important. However, gaining that health systems knowledge so often feels unapproachable, and the fine details sometimes can feel removed from relevance to day-to-day practice. We try to address both of those things in this book.
One, we want to make health systems knowledge approachable and achievable for clinicians and trainees at all levels. And second, for any health systems lesson we try to teach, we tie it directly to a clinical vignette so people realize, “Oh, this thing that I’ve experienced so many times, this is the way it is because of this thing—or at least this thing contributes to why I experience what I do now.”
So much of what we discuss in part one of the book, “What Drives Health Care,” covers really macro-level health systems factors that can feel daunting, like, “Can I actually change those things?” But in the second part of the book, “How You Could Change Health Care,” we focus on empowering clinicians to appreciate that they can make change in their own clinical environments at the micro level, but it’s important to have tools to guide you through making those changes. So I also really want to encourage any clinician or trainee who feels helpless about changing their own universe that there are tools to guide you through how to make change in your own clinical environment. I hope this educates people and makes them feel inspired to engage more with health systems at the macro level, as well as where they go to work every day.
Kevin Pho: The book is called Reshaping Health Systems: What Drives Health Care and How You Could Change It. Jonathan and Joseph, thank you so much for sharing your perspective and insight, and thanks again for coming on the show.
Jonathan Staloff: Thanks so much, Kevin.
Joseph Joo: Thanks so much.
