Payment mechanisms and the Culture of medicine

A Primary Care Perspective – Allan H. Goroll

Payment Reform for Achieving Reduction in Unnecessary Care
The Primary Care Perspective – Key Issues

 Allan H. Goroll, MD, MACP
Massachusetts General Hospital, Harvard Medical School

The predominant system for physician payment in the U.S., Medicare’s fee-for-service (FFS) RBRVS model as interpreted for CMS by the AMA’s RBRVS Update Committee [RUC], has had several adverse, counterproductive effects on primary care:

• Incented high volumes of short visits by paying only for face-to-face care and assigning a very low rate for evaluation and management services

• Compromised time for proper diagnosis, patient education, counseling, and care management/shared decision making (Ludmerer: “No Time to Heal”)

• Reduced the diagnostic confidence of primary physicians, who feel too rushed to make a firm diagnosis and who compensate by resorting to excessive test ordering and low thresholds for specialty referral both for patient safety and for reducing liability risk

• Discouraged prospective new medical graduates from going into primary care due to financial penalty ($3.5M lifetime pay disparity) and poor work environment (the “hamster wheel”), leading to a national work force crisis in primary care

• Depleted primary care practices of the capital needed to implement the teams and technology necessary to achieve current high-performance standards

Needed: Fundamental reform of payment for primary care, including

• Elimination of the “volume imperative,” (i.e., eliminating the predominance of FFS)

• Realignment of payment to support desired outcomes (e.g., achievement of desired Triple Aim goals); if comprehensive care is desired, pay should be comprehensive rather than piecemeal.

• Assuring sufficient financial resources for the necessary teams and technology essential to high-performance practice

• Paying for work that creates value beyond the face-to-face encounter, including payment for care management and population management

• Powerful, validated risk adjustment that protects against cherry-picking patients.

• Incentives for collaborative care with other providers

• Ability to negotiate payment within integrated systems of care to assure payment is proportional to risk and responsibility undertaken and consistent with overall goals

Managing Costs by Keeping Patients Healthy

HMOs–a bad word in health reform circles–flourished and then declined 20 years ago.  But were they entirely worthless?  Often they were bullies that took no patient or provider input into their decisions, and their cost control strategies could be brutal.  Their payment schemes to providers could cause unscrupulous doctors to skimp on care, but they did bend the cost curve for a few years.

Their best feature was that their payment schemes did address overutilization.  This had the potential to save lives and reduce morbidity.  Nothing good can come to a patient who is subjected to a test or procedure that he doesn’t really need, and a great deal of risk comes with every medical intervention.  I see countless instances of overutilization every day: repair of fractures that don’t really need it, shoulder and knee scopes for vague or non-existent indications, MRIs ordered for pain without any physical findings.  Our current reimbursement schemes reward all of this.

If we knew then what we know now regarding patient satisfaction, physician strategies to improve patient outcomes, the importance of good communication and physician empathy, would the HMO payment model have had more success?  Could we have kept patients satisfied, feeling well cared for, and been given good care while eliminating the financial incentives for dangerous overutilization?  What if HMOs had understood the precepts of patient centered medicine as we currently understand it.  Could primary care doctors have told their patients “no” without causing a backlash?

Now, I’m not suggesting that we return to HMOs, but alternative payment strategies that deliver just the care that patients really need can succeed so long as they are coupled with doctors practicing patient centered care.  Office visits, especially to primary care docs, will need to be better reimbursed to make this model attractive to general practitioners, but HMOs floundered primarily due to poor patient satisfaction rates, and we know enough now to manage costs better and keep our patients healthy and happy with their care.

Commentary on Payment Mechanisms – Dolores Mitchell


Dolores Mitchell, Executive Director, Group Insurance Commission

Purchasers are under enormous pressure to reduce health care costs that increase the cost of their products and services, making companies non competitive and wages stagnant. Purchasers also lack the ability to affect overuse except with tools that often just pass the rising costs to consumers. Utilization review mechanisms breed resentment from employees as well as providers and are only marginally effective. Criticizing doctors or hospitals sis considered taboo,particularly in areas where the medical/pharmaceutical/medical device industries create jobs, even if they have a negative effect on job growth in other sectors of the economy. Purchasers welcome leadership in addressing issues of overuse by physician organizations such as the IOM, THE ABIM and the Lown Foundation.

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