New Payment Models for Primary Care: Band-Aid or Cure?

Kenneth W. Lin, MD, MPH


August 20, 2019

Editorial Collaboration

Medscape &

This transcript has been edited for clarity.

Hi, everyone. I'm Dr Kenny Lin. I am a family physician at Georgetown University Medical Center, and I blog at Common Sense Family Doctor.

Research over the past two decades has strongly suggested that increasing primary care access is essential to improving population health in the United States. In 2019, two key studies further strengthened the case for increasing support for primary care. A study in JAMA Internal Medicine [1] found that for every 10 additional primary care physicians per 100,000 persons, life expectancy increased by 51 days, and cardiovascular, cancer, and respiratory mortality declined by 0.9%-1.4%. Unfortunately, the national per capita supply of primary care physicians declined between 2005 and 2015 by an average of five physicians per 100,000 persons.

Similarly, a state-level analysis of primary care spending, performed for the Patient-Centered Primary Care Collaborative by researchers at the Robert Graham Center, found that higher proportional primary care spending was associated with fewer emergency department visits and hospitalizations. Despite this, the researchers observed that primary care spending in most states constituted only 5%-7% of total healthcare expenditures, less than half of the 14% average among western European countries.

Although these studies indicate that devoting more financial resources to primary care practices could improve health outcomes, dollars are only one part of the reason that too few medical students are choosing family medicine careers. The widely used documentation, coding, and billing rules for primary care evaluation and management services are frustrating, time-consuming, and do not accurately reflect the actual work involved for common clinic visits.[2] For example, my Georgetown and Medscape colleague, Dr Ranit Mishori, recently made a strong case that completing a comprehensive review of systems is "a low-yield activity that is primarily required for billing and reimbursement purposes."

An increasing number of family physicians have responded to declining payments and rising administrative burdens by transitioning to the direct primary care model,[3] which charges patients a monthly membership fee in lieu of accepting insurance payments. For those of us who remain in the traditional system, though, relief may be on the way.

In April, the Centers for Medicare & Medicaid Services (CMS) announced its Primary Cares Initiative, a demonstration program consisting of five new voluntary payment models developed with the assistance of the American Academy of Family Physicians (AAFP) to reduce administrative complexity and reward physicians for keeping patients healthy and out of the hospital. Primary care practices that enroll will receive risk-adjusted, prospective monthly and per-visit — rather than fee-for-service — payments, providing a more predictable revenue stream and flexibility to care for patients outside of office visits.

The Ohio Academy of Family Physicians has posted a slide presentation and a 45-minute webinar with details on the Primary Cares Initiative on its website. CMS hopes that at least 25% of fee-for-service Medicare providers and 25% of traditional Medicare beneficiaries will enroll in the program. Of note, a similar capitation-based primary care payment system introduced by a large private insurer in Hawaii was recently shown to improve quality of care while reducing the average number of office visits per patient.[4]

Although the initiative has supporters, skeptics have pointed out that its Primary Care First models for individual practices focus excessively on reducing hospitalizations and will likely be revenue-neutral for most physicians, with only a few earning significantly more or less than they would have under fee-for-service.[5] How, exactly, is asking family physicians to take on more financial risk for little reward putting primary care first? I also doubt that practices will realize administrative savings early on, as private insurers will continue to require the costly and time-consuming documentation that CMS is trying to eliminate.

As medical students continue to gravitate toward higher-paying subspecialties, and current family physicians retire or flee insurance-based practices in greater numbers, only time will tell whether CMS Primary Cares will achieve the quadruple aim of improving care quality, improving the patient experience, improving clinician and staff work life, and reducing costs.[6] But it's a start, a positive step away from the unsustainable status quo, and will hopefully lead to more ambitious programs that pay primary care physicians commensurate with the value we deliver to the health system and population health.

This has been Dr Kenny Lin for Medscape Family Medicine. Thank you for listening.

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