Primary Care Emphasis Relies on Payment Reform Measures

The nation's reliance on a fee-for-service payment system has resulted in an "atomized and uncoordinated system of care that rewards expensive procedure-based services while undervaluing primary care services," according to a recent report (22-page PDF; More about PDFs) by the U.S. Government Accountability Office, or GAO.

Fee-for-service, the predominant method of paying physicians in the United States, gives physicians a fee for each service they provide, creating a financial incentive for physicians to provide as many services as possible with "little accountability for quality or outcomes," the report says. In the process, this type of payment model "encourages growth in specialty services," at the expense of primary care services.

"We are really trying to make the point that fee-for-service undervalues primary care," said Bruce Steinwald, director of health care for the GAO, in an interview with AAFP News Now. "As long as our current fee-for-service system is in place, it is going to be like swimming upstream to try and accomplish a greater emphasis on primary care services in this country."

Only part of the solution to payment reform lies in increased fees for primary care services, Steinwald said. Payment system reform must include a "recalibration" of payments that "appropriately value all services," including subspecialty and primary care services.

"Resource-based payment systems like those of most payers today do not factor in health outcomes or quality metrics," says the report. "As a consequence, payments for services and their value to the patient are misaligned. Ideally, new payment models would be designed that consider the relative costs and benefits of a health care service in comparison with all others so that methods of paying for health services are consistent with society's desired goals for health care system quality and efficiency."

Steinwald is convinced that "there is strong sentiment in Congress to try and reform fee-for-service in Medicare."

"If those efforts are successful, then there will be some benefits to primary care, and the undervaluing of primary care services relative to (sub)specialty care could be mitigated somewhat," Steinwald said.

Not surprisingly, the report identifies primary care as a highly effective means of improving both quality and efficiency. "Ample research in recent years concludes that the nation's overreliance on (sub)specialty services at the expense of primary care leads to a health care system that is less efficient," says the report. "At the same time, research shows that preventive care, care coordination for the chronically ill and continuity of care -- all hallmarks of primary care medicine -- can achieve better health outcomes and cost savings."

The report touts the advantages of the patient-centered medical home in producing better health outcomes and cost savings by allowing a primary care provider to serve as the "central coordinator" of the patient's care.

"The AAFP has proposed a medical home model designed to provide patients with a basket of acute, chronic and preventive medical care services that are, among other things, accessible, comprehensive, patient-centered, safe and scientifically valid," the report says.

The report also advocates payment modification. "Proposals for the medical home model include a key modification to conventional physician payment systems -- namely, that physicians receive payment for the time spent coordinating care. These care coordination payments could be added to existing fee schedule payments or they could be included in a comprehensive, per-patient monthly fee" says the report.

The GAO report also examines the current and future supply of primary care physicians and the effect of the fee-for-service payment system on that supply. For example, the GAO found that from 1995 to 2006, the number of medical residents in primary care training programs increased by only 6 percent, while the number of residents in subspecialty training programs increased by 8 percent. During the same time period, the number of primary care residency programs dropped from 1,184 to 1,145.

The AAFP and the Health Resources and Services Administration project a shortage of primary care physicians by 2020 as a result of several factors, including a payment system that favors subspecialty services over primary care services, notes the report.

Few organizations provide projections on the current and future demand for primary care physicians, a symptom of an "ongoing decline in the nation's financial support for primary care medicine," the report notes. "As evidence, health policy experts cite a growing income gap between primary care physicians and (sub)specialists and a declining number of U.S. medical students entering primary care specialties."