This blog is my perspective from Chapter 9 of the remarkable National Academy of Engineering, Science, and Medicine Consensus Study Report on Implementing High-Quality Primary Care (“IHQPC”). References are to specific pages within the document. It’s a big report, but well worth the read if you care about supporting our country’s primary care foundation. I have quoted liberally from the report given the clarity and conviction of its writing.
At Crossover, we’re privileged to work with some of the most innovative companies in the world, primarily partnering with the benefits leaders who are operating and running global health programs that swing hundreds of millions of dollars. They can have a big impact—not just on their own company’s healthcare spending, but also as an influential collaborator with other employers and payers. As employers seek to change the costs and outcomes of the care they pay for, a hot button over the last several years has been “value-based care” and the associated impact of putting more risk onto the providers who are delivering that care. Again and again we hear about the move to value-based payments being a good thing for the industry and the country but I don’t believe most people “really” understand what this means, neither by definition nor in practice.
From the payer side, value-based care is typically interpreted to mean putting forward a fixed fee per attributed member and then expecting the medical group to be able to deliver both a set of services as well as a specified set of outcomes. Unfortunately, industry practice still dictates that “many health systems providing primary care services through employed or contracted models have accepted global capitated payments but continue to operate and compensate primary care on an fee for service model, blunting the effects of payment models intended to strengthen primary care.” (IHQPC, pg 9) In my view, trying to move toward value-based payments but using a fee-for-service “unit of account” is self-defeating. The ENTIRE POINT of shifting to value-based payment is to pay for care in a different way in order to get a different result.
“Any effort to implement high-quality primary care must begin with a commitment to pay primary care more and differently because of its demonstrated and superior capacity among healthcare services to improve population health and health equity for all society, not because of any ability to achieve short-term return on investment for a specific payer. High-quality primary care is not a commodity service whose value needs to be demonstrated in a competitive marketplace but rather a common good to be promoted by responsible public policy and supported by private sector action.” (IHQPC, pg 373)
But what justifies paying primary care “more and differently”?
Simply put, the shift toward value-based care is the recognition that the existing system has failed and the existing “unit of account” (fee for service) is a major driver of that failure. Value-based care is founded on the premise that we need a payment model that values a “sustained relationship” with a primary care team—one that provides comprehensive services, is integrated across disciplines, and is accountable for outcomes. Bottom line: A more capable and different outcome requires a “more and different” payment model.
“Because primary care makes up a small proportion of overall healthcare spending, the reduction in other [speciality] service prices will be minimal and will help to equilibrate compensation between primary care and other specialties . . .” (IHQPC, pg 374)
Further, this can be accomplished through the Centers for Medicare & Medicaid increasing “… the overall portion of spending going to primary care by . . . identifying overpriced [specialty] services, with the goal of increasing payment rates for primary care evaluation and management services by 50 percent and reducing other [specialty] service rates to maintain budget neutrality.” (IHQPC, pg 372-3)
This “reallocation” from specialty care back to primary care is something that we have discussed for years. It is both a necessary and appropriate methodology to pay for primary care fairly and fully, given that value-based care requires additional care model capabilities to achieve value-based objectives. We have been using variations of the chart below to highlight the return on investment and clearly lay out how it is achieved: Increase payment to an accountable and foundational Primary Health service and simultaneously decrease the cost to “secondary care” services. This is the right way to literally self-fund your own innovation.
Despite the evidence that new payment models can be the catalyst to spark primary care innovation, two major stumbling blocks remain:
- High-quality primary care requires additional resources. Payment reform innovations have been evaluated against the wrong standard (short-term savings), rather than promoting high-quality primary care, which is a value in and of itself. The focus on repeatedly testing new primary care payment models with a few clinicians, in search of “a better mousetrap” to achieve these short-term savings, has left most primary care clinicians languishing in underpaying FFS arrangements with the wrong incentives. Attention should be focused on moving more clinicians to existing models rather than testing new ones.
- Budget neutrality or premium stability requirements mean increasing the investments in primary care, redistributing funds, and prioritizing it over other healthcare services, which is the reason to designate primary care as a common good. Achieving this rebalancing requires leadership, particularly in the public sector. The COVID-19 pandemic further weakened primary care and opened both the policy window and leadership opportunity for the Centers for Medicare & Medicaid Services (CMS), state officials, and more employers to act without delay.
That said, stumbling blocks can become stepping stones if we apply a different perspective.
With the right payment model, we can imagine a way to pay for care navigation, for the phone call to make sure medications were received, for the followup message to make sure a community-based appointment was kept, or for the development of technology that enables and ensures proactive, team-based care in the first place. In the future, payers (including our innovative employer partners) will both recognize and choose to pay “more and differently” for high-quality primary care. Untethering from fee for service as the base layer of the payment model and reallocating funds away from high-cost specialty care to higher value primary care creates a path forward to both pay for and provide high-quality Primary Health. The price signal alone would spin up another generation of care delivery companies willing to “enter the arena” and innovate under a true value-based budget construct.
And that is a foundation from which we can build sustainable “health as it should be.”