Perspective

The Future of Primary Care

Reforming Physician Payment

Allan H. Goroll, M.D.

N Engl J Med 2008; 359:2087-2090November 13, 2008

Article

The editors asked several experts to share their perspectives on the crisis in U.S. primary care. Their articles, which address this crisis from six different angles, follow. We also brought the five U.S. contributors together for a roundtable discussion of the problems and potential solutions for training, practice, compensation, and systemic change. A video of the discussion and reader comments can be seen at www.nejm.org.

At the heart of the decline in primary care lie dysfunctional payment systems, from the “gatekeeper” schemes of the 1990s to the current volume-driven, fee-for-service approaches. These have proved antithetical to the goals of primary care, leaving patients unhappy, physicians demoralized, a generation of U.S. medical students shunning careers in the field, and access to care increasingly problematic — all contributing to an impending national health care crisis.1

Several payment reforms have been proposed. One approach would augment fee for service with a “management fee” to pay for coordination of care extending beyond face-to-face encounters. This evolutionary approach, while recognizing an important need, retains the predominantly piecework payment system that perpetuates our “hamster-wheel” environment. Moreover, it relies on the Relative Value Scale Update Committee (RUC) of the American Medical Association to set values for primary care services, despite the committee's marked overweighting in favor of procedural specialties and the potential conflicts inherent in a fiscally constrained budgeting environment.

Value-based payment has become popular with some payers and purchasers, leading to “pay-for-performance” programs that are incorporated into fee-for-service systems (often as part of a hybrid approach that also includes a management fee, as outlined by the Patient-Centered Primary Care Collaborative, www.pcpcc.net). Clinicians' concerns about the emphasis that pay for performance puts on the processes of care (few outcome goals) and about the clinical wisdom of formulaically performing recommended actions raise questions about the advisability of this approach2; initial outcomes in controlled trials have been disappointing.3 A more comprehensive approach to payment for “doing the right thing” is the Prometheus system (www.prometheuspayment.org), which emphasizes comprehensive payment by episode of illness for the application of evidence-based practices and sharing of the savings achieved by preventing avoidable complications. Current incompleteness, prolonged development time, expensive preparatory work, and complexity of implementation (e.g., when there are concurrent illnesses) limit the present application of an otherwise promising system.

Some large integrated care systems and multispecialty practices offer better-than-average salaries to their primary care physicians, as long as certain “productivity standards” and related performance goals are met. The enhanced salaries depend on the sharing of revenues generated by highly reimbursed procedural specialists. Such revenues are not available to most primary care physicians, who tend to work in solo or small-group practices.

Viewing the current fee-for-service system, its institutional mechanisms, and proposed modifications as structurally flawed, clinically questionable, and inadequate for the delivery of robust primary care, my colleagues and I have proposed fundamental reform of payment for primary care, replacing volume-based payment with risk-adjusted comprehensive payment for the delivery of comprehensive primary care.4 Such payment would consist of a risk-adjusted “base payment” supplemented by a risk-adjusted “bonus” for achieving desired outcomes in the areas of cost, quality, and patient satisfaction.

The base payment would exceed the currently inadequate payments for primary care evaluation and management services. It would provide the additional dollars practices need to establish multilevel teams and implement health information technology — measures deemed essential to giving physicians more time with patients, enhancing access, improving coordination, and ensuring evidence-based care. It would cover all primary care evaluation, management, and coordination services (while tests, procedures, specialty care, hospital expenses, and medications would continue under fee-for-service arrangements, pending complementary payment reforms). The bonus payment (up to 25% of the base amount) would provide the opportunity for a substantial increase in income for physicians (and, if desired, for other team members) but would be commensurate with the value created. Strong risk adjustment of the base and bonus payments would ensure a level playing field and remuneration commensurate with the burden of care assumed.

This proposal may sound like “capitation” revisited, supplemented by a bonus system, and indeed it does borrow the logic of comprehensive payment for comprehensive care. But unlike previous iterations of capitation, it seeks to avoid the pitfalls of inadequate payment, excessive financial risk, shunning of complex patients, withholding of care, and cost reduction as the only rewarded outcome.

Back-of-the-envelope estimation indicates that our reform could increase payment to primary care practices by as much as 40%, but total personal health care expenditures by only 3%. This amount approximates the net investment needed to implement and sustain high-performing primary care practices, which, according to analyses by Starfield and colleagues, have the potential to significantly reduce costs, improve health status, and minimize disparities in care.5 The dollars needed to pay for the net investment will come from reducing currently wasteful expenditures (estimated at nearly 30% of total spending) through enhanced application of evidence-based, coordinated care.

For payment reform to achieve its objectives, it must be accompanied by complementary practice reform. Willingness to reorganize and commit to a high standard of primary care delivery (for example, to meet the criteria for a “patient-centered medical home” outlined by the National Committee for Quality Assurance; www.ncqa.org) might be a prerequisite for practices to qualify for payment under our model. If we are to realize the promise of primary care and avert an impending health care crisis, we need to proceed vigorously to fundamental reform of both practice and payment of primary care.

Dr. Goroll reports receiving consulting fees from Capital District Physicians' Health Plan for work related to payment reform. No other potential conflict of interest relevant to this article was reported.

Source Information

Dr. Goroll is a professor of medicine at Harvard Medical School and Massachusetts General Hospital, both in Boston, and chair of the Massachusetts Coalition for Primary Care Reform.

References

References

1. 1

   American College of Physicians. The impending collapse of primary care medicine and its implications for the state of the nation's health care: a public policy report of the American College of Physicians. January 30, 2006. (Accessed October 24, 2008, at http://www.acponline.org/advocacy/events/state_of_healthcare/statehc06_1.pdf.)
   

2. 2

   Boyd CM, Darer J, Boult C, Fried LP, Boult L, Wu AW. Clinical practice guidelines and quality of care for older patients with multiple comorbid diseases: implications for pay for performance. JAMA 2005;294:716-724
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   Pearson SD, Schneider EC, Kleinman KP, Coltin KL, Singer JA. The impact of pay-for-performance on health care quality in Massachusetts, 2001-2003. Health Aff (Millwood) 2008;27:1167-1176
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4. 4

   Goroll AH, Berenson RA, Schoenbaum SC, Gardner LB. Fundamental reform of payment for adult primary care: comprehensive payment for comprehensive care. J Gen Intern Med 2007;22:410-415
   CrossRef | Web of Science | Medline

5. 5

   Starfield B, Shi L, Macinko J. Contribution of primary care to health systems and health. Milbank Q 2005;83:457-502
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   Kurt C. Stange, Paul A. Nutting, William L. Miller, Carlos R. Jaén, Benjamin F. Crabtree, Susan A. Flocke, James M. Gill. (2010) Defining and Measuring the Patient-Centered Medical Home. Journal of General Internal Medicine 25:6, 601-612
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   L. Nekhlyudov, S. Latosinsky. (2010) The Interface of Primary and Oncology Specialty Care: From Symptoms to Diagnosis. JNCI Monographs 2010:40, 11-17
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   Mary Ann McColl, Samuel Shortt, Marshall Godwin, Karen Smith, Kirby Rowe, Patti O'Brien, Catherine Donnelly. (2009) Models for Integrating Rehabilitation and Primary Care: A Scoping Study. Archives of Physical Medicine and Rehabilitation 90:9, 1523-1531
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   Imre Rurik. (2009) Gondok és útkeresés a háziorvoslásban. Orvosi Hetilap 150:34, 1615-1622
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   Lee, Thomas H., Bodenheimer, Thomas, Goroll, Allan H., Starfield, Barbara, Treadway, Katharine, . (2008) Redesigning Primary Care. New England Journal of Medicine 359:20,
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