It is a bold move and long overdue. Rank-and-file primary-care physicians—not only the limited number who participate in accountable care organizations—need significant financial incentives to coordinate care if we're going to dismantle our wasteful and inefficient fee-for-service payment system.
Even if the program doesn't save money, it's the right thing to do for patients and the healthcare system.
Only primary-care docs, when given time to develop solid ties with patients and local communities, can deliver better health outcomes through prevention and lifestyle intervention.
Given adequate resources, they are well-positioned to give extra attention to people with chronic conditions. When illness strikes, an organized primary-care practice can coordinate care and, given the right incentives, make the most efficient use of specialists.
Yet despite all the talk about giving docs the time to be health coaches and care coordinators instead of being on the seven-minute office-visit treadmill, there hasn't been a big movement in that direction. Some evidence suggests we're going backward. A study in Health Affairs last month found that office visits to physicians receiving capped per-patient fees had fallen between 2007 and 2013, going from 6.6% to 5.3% of all visits.
Private insurers, whom you might expect to pump up primary care, haven't stepped up to the plate. What's poorly understood by the general public is that when the CMS, a state or an employer makes an annual per-beneficiary payment through Medicare Advantage, a Medicaid managed-care organization or an employer plan, insurers' payment style rarely changes. They usually follow traditional Medicare and pay providers through old-fashioned fee-for-service medicine.
Insurers use the same codes as the CMS. They merely change the prices based on who the ultimate payer is or what price they negotiated with the provider. Indeed, many insurers aren't even at risk for a large part of their business. They passively administer claims for large, self-insured employers.
The comprehensive primary-care initiative, launched as a seven-market pilot project in 2012, was designed to alter the volume incentives in fee-for-service by giving each physician a monthly management fee to coordinate care. They were required to risk-stratify their patients, offer a care management plan for those with multiple chronic conditions, and develop plans for patient and caregiver engagement.
It could work only if private insurers got involved, though, because a Medicare-only program wouldn't generate enough fees for the practice to hire outreach workers or provide telehealth and home health—the modern tools of care coordination. To their credit, 38 insurers joined the program, which covered 500 practices, with 2,200 physicians and 2.7 million patients in the seven markets.
Has it saved money? Not yet. An evaluation of the first two years showed the monthly fee of $18 for each high-risk patient lowered overall costs by a comparable amount. Lower-risk patients also saw their costs fall, but that amount recouped only about two-thirds of the management fee.
Still, the CMS expanded the program to 20 regions where they hope to line up 5,000 practices with 20,000 primary-care physicians and 25 million patients. They also added new wrinkles by offering higher fees for meeting quality and utilization targets and a much higher management payment in exchange for taking on some risk. That last part could be problematic in some states where insurers—because of the backlash against HMOs in the 1990s—face legal restrictions.
Those laws shouldn't be allowed to stand in the way. The startup phase of the program essentially broke even, a victory given that community-based primary-care practices operate without major institutional support. It's entirely reasonable to think that, over time, they will only get better at providing the crucial function of care coordination.