Senate Hearing Links Physician Payment Rates to Primary Care Shortages

The nation's health care system continues to undervalue primary care services, leading to a skewed physician payment structure that has created a shortage of primary care physicians, according to witnesses who testified before a Senate committee on Feb. 12.

"When I say primary care services are undervalued, that does not mean that just increasing the prices paid to primary care is the solution," said Bruce Steinwald, director of health care for the U. S. Government Accountability Office, during testimony before the Senate Health Education, Labor and Pensions Committee. "As you are well aware, we face unsustainable trends in the Medicare program and in the health care system as a whole. And, just as payment incentives are misaligned in primary care, they are misaligned in specialty medicine as well."

Medicare operates under a fee-for-service system, rewarding providers based on the volume of provided services. And it serves as a prime example of "how the system undervalues primary care services," helping to discourage medical school students from pursuing careers in the primary care field, Steinwald said.

There are wide variations between Medicare payments for primary care and those for subspecialty services, said Steinwald. In Boston, for example, Medicare pays primary care physicians $103.42 for a 25- to 30-minute visit with an established patient who has a complex medical condition; that's compared with $449.44 paid for a diagnostic colonoscopy, a procedural service of a similar duration.

These payment disparities are exacerbated by technological improvements that enhance the ability of subspecialists to provide more complex services in a shorter period of time, leading to an increase in payments and making these specialties more attractive career options for medical students. In contrast, primary care physicians rely primarily on office visits for their income and, thus, are limited in their ability to reduce time with their patients without compromising the quality of patient care, Steinwald said.

"This undervaluing of primary care services appears to be counter-productive, given the vast literature describing the relationship between health care costs and quality," Steinwald said.

AAFP member Kevin Grumbach, M.D., professor and chair of the Department of Family and Community Medicine at the University of California, San Francisco, also told the Senate committee that Medicare's payment policy "pulls people away from primary care." Without addressing the "distorted incentives in the Medicare program," it will be impossible to compensate for primary care shortages, said Grumbach.

The Senate committee hearing, which was held as a roundtable discussion focusing on workforce issues, included seven witnesses representing various facets of primary care.

Bruce Auerbach, M.D., president-elect of the Massachusetts Medical Society and an emergency medicine physician, warned the committee that "unless we take the necessary steps to increase the number of primary care physicians," attempts to improve health care quality and reduce costs will fail.

Massachusetts enacted a law two years ago mandating health care coverage for all residents, a measure that has dramatically increased the number of insured residents in the state. But, at the same time, it has worsened the state's primary care shortage. There are not enough primary care physicians to take care of the growing number of residents who are now insured and accessing services, Auerbach said.

"The Massachusetts Medical Society has chronicled for several years the deterioration of the workforce in Massachusetts," said Auerbach. "During the past two years, we experienced, for the first time, critical and severe shortages in primary care."

Auerbach, like other witnesses, described Section 747 of Title VII under the Public Health Service Act as providing the only federal grants for training family physicians and for "increasing the number of primary care providers in underserved areas."

"Our experience in Massachusetts -- confirmed by national data -- shows (Title VII) dollars have been very effective in training physicians who continue to practice in community health centers and in underserved areas," said Auerbach. "It is essential that Title VII be reauthorized."