Sunday, October 28, 2018

Saving Primary Care Before It’s Too Late

Talk to almost any primary care physician these days and what you’ll hear should frighten you. Many PCPs are actively looking for ways to get out of primary care, and there’s no one to replace them because medical students don’t want to go into primary care. One well-known reason for this is that PCPs are being forced to spend more time dealing with the administrative burdens of dysfunctional EHRs, measurement programs, and health plan rules than taking care of patients.

But there’s another reason that nobody is talking about, and it may be an even bigger threat to the future of primary care.

The Hidden Flaw in “Value-Based Payment” Programs

Health plans and public programs simply aren’t paying enough to cover the costs of good primary care. Payments to PCPs from both Medicare and private payers have fallen far behind inflation, and so-called “value-based payments” do more harm than good when the payments aren’t enough to keep the lights on. Large health systems can afford to subsidize these losses, but independent primary care physicians can’t. They will simply be forced out of business, and that will be devastating for many small and rural communities.

You know it’s bad when primary care practices have to ask for donations in order to keep treating patients. The residents of Hilo, Hawaii created a fundraising site to try and prevent a young primary care physician and her practice from going bankrupt because of the low payments from the big health insurance company in Hawaii. You can see the plea for support here:

This young physician – Michelle Mitchell – has worked hard to create the kind of primary care practice we need everywhere in America. And she’s trying to do it in a small rural community with many poor people and a severe physician shortage. Hilo is not the wealthy “resort” part of Hawaii; on top of problems of poverty, homelessness, and unemployment, it’s been in the news over the past year because it has an active volcano destroying homes and polluting the air, and it was hit with a severe hurricane. It’s the kind of place where health plans should be doing everything in their power not only to keep primary care practices open but to provide extra support so they can deliver true primary care medical home services to their patients. But unfortunately, that’s not happening. You can read Dr. Mitchell’s story here:

There’s an important lesson here for many current “value-based payment” initiatives. Rather than working with the physicians in the community to figure out what kind of payment system would actually support good primary care in rural communities, the health insurance company in Hawaii hired a group of behavioral economics theorists at a large urban medical center to tell them how PCPs should be paid. They published a journal article touting how they designed incentives to achieve savings for the health plan and incentives to improve quality.

But it’s clear from the article that the consultants and health plan never even tried to answer a very fundamental question – what does it actually cost to deliver good primary care in Hawaii and would the payment system they designed cover those costs? You can’t “incentivize” a PCP to deliver higher-value care if the PCP is no longer practicing at all because they defaulted on their loans or mortgage or failed to make payroll.

How should the payment system have been designed to support small rural practices? Dr. Mitchell gave her recommendations at the National ACO, Bundled Payment, and MACRA Summit in Washington DC in June. She described her experience participating in both the CMS Comprehensive Primary Care Plus program and the payment system in Hawaii, and she showed how those programs increased her costs and failed to provide enough revenue to cover the costs, leaving her practice worse off financially than it was before. You can see her recommendations for what is needed to make high-quality primary care sustainable here.

Saving Primary Care Before It’s Gone

There’s been a lot of talk for many years about the need to improve payment for primary care practices, but there hasn’t been much action, particularly at the federal level. Medicare still doesn’t have a primary care medical home program available for PCPs in most of the country. The CMS Comprehensive Primary Care Plus initiative is only operating in 18 regions of the country, and even in those regions, only a subset of PCPs are able to participate. Primary care practices in Alabama, Alaska, Arizona, California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maine, Massachusetts, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, North Carolina, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and in most of Kansas, Kentucky, Missouri, New York, and Pennsylvania are still stuck in the traditional Medicare fee for service payment system.

In December 2017, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) recommended that the Secretary of Health and Human Services begin testing a new primary care payment model recommended by the American Academy of Family Physicians so that more primary care physicians would have the opportunity to be paid in better ways. PTAC specifically recommended that the AAFP model be tested in a way that would “facilitate rapid implementation on a broad scale,” and it emphasized the urgent need to preserve and strengthen primary care.

Ten months has now passed since PTAC recommended a new primary care payment model, and nothing has happened.

Rather than waiting years for CMS to design the “perfect” payment model and then waiting many more years while it’s tried in a small number of places, it’s time for a different approach. CMS and other payers should:

  • Try multiple payment models so we can learn which approaches work better in which places. It’s unlikely there will ever be a one-size-fits-all model that will work well in every community and every type of practice, so we should stop trying to develop one ideal model.
  • Let the physicians design the payment models in ways they believe will work. The current top-down, payer-driven approach to alternative payment models hasn’t succeeded in improving quality or reducing costs, so it’s time to try a bottom-up approach instead. Physicians have shown they will respond if they are given the opportunity. For example, Jean Antonucci, MD, a solo primary care physician in a rural part of Maine, developed an innovative primary care payment model that is simpler than other approaches and that uses patient-reported outcomes to measure quality and stratify payments. PTAC reviewed her proposal in September and recommended that CMS test it in addition to the proposal developed by the AAFP.
  • Move quickly to try new approaches. Every day that goes by waiting for the ideal model to be developed is a day that a patient may not get the care they need and a day that a primary care practice comes closer to closing.

Although we’re spending too much overall on health care, we’re spending too little on primary care – estimates indicate that primary care represents less than 8% of total healthcare spending. If we don’t invest in better primary care, we’re not likely to be successful in reducing the 92% of spending where the opportunities for savings exist. The net cost of a 25% increase in payments to PCPs is zero if the reductions in avoidable hospitalizations and unnecessary tests and procedures from better primary care reduces other spending by a mere 2%.

The question is not whether we can afford to improve primary care, but whether we can afford not to. Will there be any primary care practices left by the time we finally decide to pay them the right way?



  1. Harold, thank you so much for this. You have filled in blanks and corrected some mistaken impressions that I had personally. The third from last sentence deserves to be at the top in bold: A 25% increase in primary care payment and a 2% decline in cost from allowing the grassroots docs, me and us, to innovate and better coordinate care is doable and smart. FFS is killing us, and value based payments in my Seattle community are tiny to trivial. Will it take a collapse of primary care to bring about a change in the payment model? Probably, but I place my hope that we can move before it’s too late. I’ve been a PCP for 38 years. The system has been broken all that time. We’re simply slow getting to the end game, but we’re here now.

  2. Comment by Paul E Buehrens MD — November 13, 2018 @ 2:06 pm

  3. […] Harold D. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform. In a blog post, Miller says health insurers are not paying enough to cover PCP’s costs and value-based payments […]

  4. Pingback by Primary care physicians find value-based payments fail to cover their costs | Association of Health Care Journalists — December 11, 2018 @ 10:59 am

  5. […] Harold D. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform. In a blog post, Miller says health insurers are not paying enough to cover PCP’s costs and value-based payments […]

  6. Pingback by Primary care physicians find value-based payments fail to cover their costs | Healthy and Happy — December 11, 2018 @ 11:06 am

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