Are Primary Care Physicians (PCPs) Important to ACO Success? Payment Arrangements Say Otherwise

Long ago, the Population Health Blog learned that when it comes to health insurance, capitation or bundled payments brakes, while fee-for service payments are gas. Too many physician office visits?  Use "capitation" brakes. Want to increase physician visits?  Apply a payment for each encounter with some FFS gas. 

Health care organizations can pass this arrangement onto their physicians. They can pay them with a salary (a form of capitation), or a variable "productivity" compensation (seeing more patients is compensated with a form of FFS) or with a combination of both.
 
Simple, right?  To figure out this ying-yang of utilization management, just follow the money.

That's why the PHB was interested in this just-published Annals of Family Medicine paper on how primary care physicians are being paid by Accountable Care Organizations (ACOs). If you believe more primary care visits translate to savings in other parts of the ACO, then you'd want to apply gas. If you believe primary care visits are a cost that doesn't necessarily save money, you'd want to apply the brakes.

The authors used data from the 2012-2013 "National Survey of Physician Organizations" to compare primary care physician (PCP) compensation in ACOs with non-ACOs. 1,398 organizations were in the original database; after excluding solo practitioners and specialist physician organizations, 632 were left. 

Three groups were compared:

1) Medicare ACOs (21.1%) with exposure to some financial risk related to total health care utilization;

2) Non-ACOs (2.8%) with contracted financial risk for primary care costs (2.8%);

3) No ACO and no risk (76.1%).

Results?  PCPs in.....
Medicare ACOs got 49% of their income from a flat salary and 46% tied to productivity. 3.4% was tied to quality;
Non-ACOs at primary care risk got 66% of their compensation from salary, 32% tied to productivity and .8% from quality;

No ACO arrangements with no risk had compensation that was similar to the Medicare ACOs.

The PHB's take-aways?

Based on the non-ACOs, health care organizations are prepared to use salary to influence physician behavior.  If you believe PCP visits are a cost and you are at financial risk for utilization, apply more brakes than gas.  The model is still out there.

But......

The leaders running Medicare ACOs don't know what the right balance of FFS and capitation for PCPs, and are mirroring a status quo that is indistinguishable from business as usual.  Despite the fanfare about the critical role of primary care in health reform, the Medicare ACOs have decided otherwise. If they ultimately succeed or fail, it won't be because of any special innovation involving their PCPs' compensation.

Image from Wikipedia

Health Policy Insights from the Medical Home Summit: Wellness, ACOs

The Opening Ceremony of
The Medical Home Summit

The Population Health Blog is back home after attending the intellectually rewarding Population Health Colloquium and Medical Home Summit.  It was great to reconnect with old colleagues and make new friends.

In no particular order, here are some PHB take-aways:

One representative from household-name health insurer spoke in a lofty plenary session on the merits of keeping patients healthy. While the PHB was inspired by the videos of device-wearing joggers, it all seemed eerily reminiscent of the wacky pharmaceutical company value-propositions from years ago. That's when these companies said that they weren't selling "pills" but "cures."  It remains to be seen if Humana's transition from pooling risk to promoting fitness will lead to a similarly unprofitable ending.

More than one smart policymaker expressed skepticism on-stage about the ability of Accountable Care Organizations to reduce costs or increase quality. Wow. The PHB suspects more ACO shoes are getting ready to drop inside the beltway. If that's correct, it seems the expert-class is not only reducing their exposure to the coming stinkbombs, but is retooling to get in on The Next Big Idea gravy train.

One compelling speaker suggested that truly "patient-centric" primary care medical homes should offer timely access, the ability to talk to the doctor by phone at any time and attentiveness to the social dimensions of their patients' needs while richly rewarding docs to provide high-value care to fewer patients.  When the PHB mused out loud that may be what precisely what Concierge/Direct Primary Care practices are doing, the reaction of the audience prompted momentary concern that it might get lynched. 

The looming repeal of the SGR was mentioned only in passing, suggesting that few believe that this latest legislative fix portends a renewed commitment to health care reform.  As the PHB understands it, the current proposal commits Medicare to a .5% increase in physician fees per year over the next five years. This reminds the PHB of a compromise it made when the Spouse countered that a loaded SUV was a better option than a loaded sedan.  We got the loaded SUV.

And the EHR wasn't mentioned at all, which kept the PHB from offering its novel twist on Ms. Clinton's Emailgate tempest. It's clear that the Secretary reasonably concluded that her State Department's email system was unable to meet her personal workflow electronic communication and documentation needs. Our nation's EHR-using physicians feel her pain and salute her for her approach to finding a workable solution. After the American Medical Association gives her a suitable award, they should ask her if they can expect that same commitment to innovative health information technology solutions when she wins the White House.

Image from Wikipedia
         

The End of Power Health Care?

Corporate titans enjoying
the good old days.

While Moses Naim's The End of Power devotes only a few pages to medicine, it's still provocative and worthwhile reading for anyone involved in the delivery of health care.

As the Population Health Blog understands it, the book's central thesis is that traditional "power" is being disrupted by the three modern trends of "more," "mobility" and "mentality."

We live in an unprecedented era of more (relative) widespread wealth, have an astonishing ability to move goods, services, information and ourselves around the globe (mobility) and are far less likely to adopt the cultural and intellectual assumptions and norms of established society (mentality).

Despite the depressing narrative of the "elite 1%," the irony is that governments and corporations have far less ability to command and control the 99%. This has big implications for world affairs, democracy and U.S. power.

Wow.

Big themes like this naturally prompt the excitable Population Health Blog to speculate about the implications of Naim's more-mobility-mentality for health reform in the United States.

It should be no wonder that policymakers, politicians, academics and regulators are promoting a large and concentrated i.e. powerful version of healthcare delivery.  These cognoscenti argue that huge integrated delivery systems, accountable care organizations and regional providers can "rationalize" health care with standardized protocols, less variation, efficient service lines, alignmment of incentives, optimum capital deployment and assumption of insurance risk.

Mr. Naim cautions that the power-play may not succeed. The PHB extrapolates:

1. While pundits can argue whether the Affordable Care Act's insurance options are as good as they should be, we're devoting a lot of wealth toward health care. More individuals have higher levels of resources to put into their care than they've ever had before. And they know it.

2. While that wealth is being tempered by out-of-pocket expenses, network exclusions, service limitations and other trade-offs, consumers still have relatively abundant choices on not only when, but where to see that doctor, have that surgery or take that pill.  By the way, information is not only cheaper (thanks to the internet) but no longer monopolized by the health professions. 

3. Whether it's a one-on-one recommendation to have a procedure or a proposal to build a new hospital wing, gone are the days when a professional expert's opinion was automatically accepted. Stakeholders are demanding evidence, seeking justification, asking for alternatives and are relishing the "gotcha" moments.

Where do these healthcare versions of more-mobility-mentality take us? Greater access to resources means higher expectations. Mobility means consumers will use exercise choice to cross country, state or even national borders to access care when they choose to do so.  And mentality translates into higher levels of individual consumerism.

Instead of protocols with less variation, patients will want the care to be personalized. Service lines will be judged less on efficiency than on local notions of value. Provider incentives based on "outcomes" and "upside risk" will have zero value proposition for their wealthy, mobile and skeptical customers.  Capital won't necessarily flow toward non-performing assets and year-end savings won't materialize just because policymakers wish it so.

Accountable care organizations and integrated delivery systems will still have huge competitive advantages. That being said, their chances competing successly against smaller competitors and access to capital will be increased if

1) their protocols are flexible,

2) variation is not only welcome but warranted,

3) patients have a good reason to choose their service lines,

4) incentives are broadened, and

5) this new and different level of complicated risk is realistically priced.

And that's assuming that the health provider policymakers, politicians, academics, regulators and CEOs realize that they're not quite in charge anymore.