Many health experts say that U.S. primary care is in crisis, with demand for appointments rising and doctors scarce. A new five-year experiment might prove part of the solution.
Set in motion by Affordable Care Act provisions intended to boost financing innovations, the program, ACO PC Flex, will increase primary care spending while incentivizing doctors to use the funds to head off serious illness and expensive hospital visits. The goal, proponents say, is a healthy cycle of better, broader primary care options.
Soleil Shah, a policy researcher and physician at Harvard-affiliated Brigham and Women’s Hospital, co-authored a recent opinion piece on the new initiative in the Journal of the American Medical Association. In this edited conversation with the Gazette, Shah outlines some of the barriers to primary care and details the potential benefits of ACO PC Flex.
What’s wrong with U.S. primary care?
There are a few different factors at play. First is the burden placed on clinicians to see a lot of patients in a short time. This is getting worse. More often than not, primary care practices are owned by large corporate entities like health systems and insurance companies. These corporate entities want clinicians to see as many patients as they can because more volume means more people can be charged.
Second is that reimbursement is quite low for primary care relative to other providers. Our healthcare system prioritizes specialist care and overweights quick office procedures — dermatologists who perform procedures in the office, ophthalmologists who perform cataract surgery — over primary care, whose doctors do annual exams, provide preventative care, and work up acute medical complaints.
Another issue is the volume of medical information that exists today. It’s a lot for anyone to handle, and as data and knowledge grow exponentially, the scope of primary care is expanding rapidly.
“[This model] creates incentives for doctors to spend more time counseling patients and doing other things, outside of traditional clinic appointments, to try to keep them healthy.”
If primary care was valued properly, would practitioners make as much as brain surgeons? ER physicians?
I can’t say what the right number is, but they’d be paid much more than they currently are. Some advocate redoing the fee schedule so that specialists aren’t paid as much and primary care gets paid more. I don’t think that’s likely. For many decades, political societies that represent different specialties have advocated in Congress to keep rates high. Those societies have bargaining power, and primary care has historically not been able to get their rates up in the way that cardiologists and other specialists have.
So to improve primary care in a different way, we’ve created accountable care organizations?
Accountable care organizations are a different model for paying doctors. Their goal is to incentivize doctors to provide high-quality care at lower cost to patients. Under an ACO, doctors get paid as they normally would, which is fee for service. But in an ACO, if they’re able to keep their expenses under a certain threshold — let’s say that threshold is $100,000 and they end up spending $80,000 — then the remainder is considered shared savings. A portion gets paid to providers as an incentive while another portion is retained by government as savings.
The idea of shared savings has become popular and ACOs are a promising area of payment innovation in healthcare. They incentivize doctors to keep patients out of the hospital, where they incur high medical costs. ACOs are a decade old, and the next iteration — a new form of ACO — started in January: ACO PC Flex.
And this new plan increases payment for primary care?
In the typical ACO model, doctors get paid after they provide services. Here, the payment comes before any services are given. This is called “prospective payment,” where the ACO gets a large payment before any care is delivered. That payment is based on the average payment within the county where the ACO is located, with some adjustment if the patients seen by that ACO are medically complex. The amount that they’re planning on paying these groups up front is a huge increase compared to historical levels of payment for primary care doctors. We hope this is going to help these ACOs build more infrastructure around primary care and create special programs focused on keeping patients out of the hospital. It creates incentives for doctors to spend more time counseling patients and doing other things, outside of traditional clinic appointments, to try to keep them healthy.
Also, in typical ACOs, when you administer a service like ordering labs for a primary care patient, that expense counts against your expenditure goal — $100,000 in our prior example — and cuts into your potential shared savings. That might create a disincentive to invest heavily in primary care. The ACO PC Flex model handles it differently, and the upfront payment does not count as an expenditure.
These are design elements that we think will encourage more primary care, that will bring primary care providers’ payments closer to those of other specialties, and, hopefully, incentivize more upstream preventative care.
If it works well, could we see it replacing other primary care reimbursement models?
That is the classic question. These models apply to Medicare enrollees, but, if this is successful, to what extent will it trickle down to people who aren’t on Medicare? If this is good for Medicare beneficiaries, that’s welcome. But we also need more money for primary care providers in Medicaid, especially, because those are lower-income patients and reimbursement rates are lower. Plus, they’re often the patients with the highest need and who would benefit the most from more and better primary care.
Commercial insurance will be incentivized if ACOs see savings through this plan. If this is a successful program, keeping patients out of the hospital and saving money on the total cost of care, then private insurance companies could be interested in implementing something similar.
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