While healthcare futurists proclaim that it is within the reach of the physician to influence and control the current trajectory of healthcare delivery reform, the average private physician is too busy participating in the fee-for-volume healthcare payment program (i.e., see more, make more) to electively move to the new emerging fee-for-value healthcare financing schemes (i.e., accountable care).
Some have responded to this challenge through health system employment (about 40 percent), while others have aggregated into large single- or multispecialty groups. About 60 percent have continued in the private practice of medicine, contracting directly or through IPAs, in an attempt to hold on to traditions that have helped make the profession so attractive and successful.
“Accountable Payment Models are the future,” says Harold Miller, MD, president and CEO of the Center for Healthcare Quality and Payment Reform, a national healthcare reform nonprofit based in Pittsburgh. In a recent report, Miller notes that physicians would need to slow the growth in Medicare spending by only 0.5 percent per year over the next decade to achieve the necessary savings for SGR repeal.
He goes on to say that slowing growth by an additional 0.5 percent would keep Medicare spending growth in line with GDP. But “slowing” isn’t necessarily something North Texas’ independent physicians can afford to do. To be entirely honest, most physicians find it difficult to incorporate changes into their current practice model due to over-booked schedules and overflowing inboxes.
What once was possible only through employment with large healthcare systems has evolved into a new business model for the independent physician looking to transform his or her practice — without having to do it alone. Now, Accountable Payment Models are under development across the Dallas physician landscape.
In one local example, a large group of independent physicians (solo, small and large group practices) are pooling resources to launch a physician-directed clinically integrated network. The resulting CIN, with approximately 400 primary care physicians and specialists, already has contracted with both government and commercial payers, and is caring for more than 20,000 patients in new Accountable Payment Models. This CIN model allows physicians to continue to hold traditional fee-for-service payer contracts, while moving in the direction of ACO contracting within the same organization. This strategy provides a smoother transition, along with important support through the challenges of clinical integration.
As Miller highlights, our current FFS payment business model poses a key barrier to clinical integration. Most physicians experience penalties for the delivery of value-based care (i.e., reducing unnecessary services and improving quality). For example, if a physician slows down to perform fewer or lower-cost procedures, he or she loses money, even if the patient benefits. Additionally, physicians who endeavor to reduce unnecessary utilization and costs are not currently compensated in traditional FFS payer contracts. Efforts such as making patient phone calls to prevent expensive emergency room visits or coordinating care with a specialist to reduce duplicate testing or medication side effects cost time — and are not rewarded.
To make matters worse, over the last 18 months, DFW’s commercial payers have reduced FFS rates to independent physicians, while placing new financial reward opportunities “at risk” and asking physicians to work collaboratively in CINs to earn those rewards. Unfortunately, only a few insurance providers have offered any financial support, such as higher FFS rates or reasonable care coordination fees, to entice physicians to transition into these new contracts.
This contracting behavior occurs at the same time that contracts with higher FFS reimbursement rates are offered to health system-employed physicians. These conflicting health insurance contracting practices may suggest that the payer community is intent on driving the DFW physician market toward consolidation. All CIN efforts require a high degree of initial financial support. Because payers have been hesitant to provide adequate financial incentives, independent physician-led CINs have had to lean on their own financial reserves or create new partnerships to help fund their infrastructure-building efforts while supporting physicians during the transition.
Another business model challenge is a misconception that CINs are designed only to benefit primary care physicians. Although there are a few models where PCPs are the only physicians invited to join, the most compelling CIN models see primary care physicians working closely with specialists, hospitals and post-acute care organizations to achieve mutual benefit from Accountable Payment Models. Examples of new physician payment models under development for the more advanced CIN models are:
- Bundled Payments — Physicians and hospitals work together to redesign care for particular disease processes in ways that reduce cost without rationing, and earn financial rewards for all parties.
- Warrantied Payments — Physicians and hospitals work together and are reimbursed for preventing complications instead of paying more for treating complications.
- Condition-based Payments — Physicians are paid to address patients’ expressed need to have their health problems addressed without regard to the methods utilized. If physicians and hospitals can achieve equally effective high-quality results at less expense, financial rewards are shared.
The efforts of independent physicians working together in CINs are producing results, despite the early challenges of working with payers and the costs of building the necessary infrastructure. The improvement in patient care quality, satisfaction and cost efficiency is proving that physician-led and physician-managed CINs can succeed in the new payment models, helping members restore and improve their practice revenues. I suspect this success soon will lead these CINs to negotiate directly with employers, without the mediator of traditional health insurers. When this happens, physicians may well experience an improvement in the practice of medicine — and an increase in the most valuable resource they have: time.
Dr. Jim Walton is the president of the Dallas County Medical Society and the CEO of the Genesis Physicians Group, which offers independent physicians help with group purchasing, contracting, negotiations, and other services.