Can a Payment System Overhaul Save Primary Care?

Everyone seems to agree we need a better way of paying for primary care, but little is being done by most health plans to improve primary care payments. The high administrative burdens, simplistic performance standards, and low payments in current “value-based” payment systems have failed to improve the quality of care for patients and are causing many primary care practices to close. Rather than addressing these problems, Medicare’s new “Primary Care First” demonstration takes a step backward, providing lower payments than the Comprehensive Primary Care Plus (CPC+) demonstration and penalizing practices that care for high-need patients.

We propose a radically different approach: a patient-centered payment system that would pay adequately for each of the three major types of primary care services — wellness care, acute care, and chronic disease management — and assure appropriate, high-quality care for every patient based on their individual needs.

Aligning Payments With Services

Adequate payment for primary care is essential. Health insurance payments to primary care practices must be aligned with the way the services should be delivered. This can be done through a two-part payment approach:

A monthly per-patient payment for wellness care and chronic disease management. Wellness care and chronic disease management should be proactive services designed to prevent problems, rather than reactive care that occurs only when a patient visits the practice. Moreover, many aspects of these services can be delivered by nurses and other staff as well as a clinician. A monthly payment provides the predictable, flexible resources needed to support this. However, the payment must be higher for a patient who has a chronic disease and even higher for a patient with social risk factors, so the practice can spend adequate time addressing each patient’s needs. Patients should voluntarily enroll with a primary care practice if they want to receive the services supported by these payments, rather than a payer “attributing” the patient to a primary care practice without the knowledge or consent of the patient or the primary care provider.

A fee for addressing a new acute problem. When a patient has a new acute problem, the primary care practice should be organized to diagnose and treat it promptly, and the clinician must have adequate time to ensure an accurate diagnosis and plan appropriate treatment. Patients with more frequent acute problems will require more of the clinician’s time, and payment must be adequate to support the extra effort. Since the systems commonly used to “risk adjust” capitation payments do not take account of new acute problems and new chronic conditions, the best way to support this inherently reactive, clinician-driven service is through an acute care fee. The fee should allow flexibility to provide care in whatever way works best for the patient — an office visit, telehealth, or a phone call. The fee would only be paid for new types of acute problems, however; exacerbations of previously diagnosed chronic conditions should be addressed through the services supported by the monthly payments.

This combination of monthly payments and fees is consistent with the recommendation for “hybrid” payment made in a recent National Academies of Science, Engineering, and Medicine report on primary care. However, unlike current hybrid payments that continue paying fees for all types of visits and add a small monthly care management payment on top, our approach rewards the primary care practice for reducing chronic disease exacerbations and for responding promptly to new acute problems.

Making Primary Care Affordable for Patients

In addition to paying the primary care practice adequately and appropriately for its services, health insurance plans must ensure that primary care is affordable for patients. Many patients who have the greatest health needs are the least able to pay more for the extra help they need, and financial barriers to care are one of the causes of current disparities in health outcomes. Ideally, there should be no patient cost-sharing (i.e., co-payments, co-insurance, or deductibles) for the monthly payments for wellness care and chronic condition management, since these services can prevent the need for more expensive care in the future. If cost-sharing is necessary, the cost-sharing amount for acute care services should be set so it is affordable for patients, in order to encourage them to seek early diagnosis and appropriate treatment of problems by the primary care practice.

Assuring the Quality of Care for Patients

We recommend abandoning the use of quality measures and payment incentives like the Merit-Based Incentive Payment System (MIPS) in Medicare and the pay-for-performance (P4P) systems used by other payers. In addition to being administratively burdensome, current quality measures penalize physicians when they customize care for individual patient needs. This can make it more difficult for disadvantaged patients to obtain appropriate services and is likely to worsen inequities in outcomes rather than reduce them. Moreover, there are no quality measures for many aspects of care and many types of patient needs.

Instead, we recommend a more robust, efficient, and patient-centered approach — asking primary care practices to proactively identify patient needs and deliver evidence-based care to address those needs:

Regularly Assess Patient Needs and Outcomes. Good primary care requires knowing whether patients are having problems and whether their treatments are working. Free technologies, like Dartmouth’s HowsYourHealth.org, enable primary care practices to regularly ask each patient a few standard questions about the health problems that are of greatest concern to them. Many small practices have been successfully using these tools to improve patient care, but current payment systems do not reward this.

Use Evidence-Based Clinical Practice Guidelines. Delivering the services recommended by evidence-based clinical practice guidelines is the most appropriate way to achieve a good outcome for most patients. However, the clinician must be able to deviate from the guidelines when the recommended services are either inappropriate or infeasible for a particular patient. If (and only if) primary care practices are being paid adequately, it is reasonable to expect them to utilize evidence-based guidelines developed without commercial influence in diagnosing and treating patients and to document the reasons when deviations from the guidelines are necessary.

The mechanism for quality assurance should be simple and straightforward: When a practice submits a bill to a payer for a monthly payment or an acute care fee for a patient, it would attest that it had been regularly assessing the patient’s needs and outcomes and that it had delivered care recommended by appropriate guidelines (or documented the reasons for deviation). There is no need for the practice to submit written documentation of these things to the payer, just as there is no requirement under current payment systems for a practice to submit documentation that an office visit was delivered or what was done during the visit. The documentation would be kept in the patients’ clinical record so it could be audited if there was a concern about the quality of care.

Creating Higher Value Through a Learning Health System

Documenting the reasons for deviations from guidelines and assessing the outcomes of services not only assures quality care for individual patients, it also provides a mechanism for improving and expanding clinical practice guidelines, particularly for patients with more complex needs. This is essential to create the kind of “learning healthcare system” the Institute of Medicine (now the National Academy of Medicine) called for over a decade ago. Small independent primary care practices have already done this on their own, and they have been able to deliver better care to their patients as a result.

We Need to Stop Talking and Take Action

Primary care is in deep trouble. The U.S. already ranks last among high-income countries in terms of access, affordability, and equity of healthcare. The gap will only grow if we continue to lose primary care practices. We urge payers to begin using a patient-centered approach to paying primary care practices before it is too late.

The views presented in this article are solely the responsibility of the authors and do not necessarily represent the views of the Patient-Centered Outcomes Research Institute, its Board of Governors, or its Methodology Committee.

John H. Wasson, MD, is Emeritus Professor of Medicine at the Geisel School of Medicine at Dartmouth, and previously spent four decades as a practicing internist and geriatrician. Harold C. Sox, MD, is a retired general internist, Editor Emeritus of Annals of Internal Medicine, and Director of Peer Review at The Patient-Centered Outcomes Research Institute (PCORI). He is a co-author of Medical Decision Making. Harold D. Miller, MS, is President and CEO of the Center for Healthcare Quality and Payment Reform, and an Adjunct Professor of Public Policy and Management at Carnegie Mellon University.