Reforming Health Delivery System is Only Solution to Improving Quality, Restraining Costs, AAFP Tells Senate HELP Committee

Thursday, November 10, 2011


LEAWOOD, Kan. — Depending only on a fee-for-service system to pay for health care undermines Congressional efforts to improve the quality of care and constrain the cost of that care. In fact, such a system discourages the very primary care services on which transformation of the U.S. health care system depends.

That was the message taken by the American Academy of Family Physicians to the Senate Health, Education, Labor and Pensions Committee hearing, “Improving Quality, Lowering Costs: The Role of Health Care Delivery System Reform,” today.

The current health care system creates perverse incentives, according to the AAFP. Fee-for-service pays for procedures provided to patients, thereby encouraging a higher volume of care and failing to value the cognitive expertise, preventive services, and chronic care management provided by primary care physicians. As the volume of services exceed spending targets, physician payment reductions — mandated by the sustainable growth rate formula — kick in.

“As payment rates decline, (subspecialty) physicians have made the logical, economic decision to increase the number of services provided,” the AAFP testimony says. “However, non-procedure-based providers, like primary care physicians, cannot physically increase the volume of services. Their alternative is to stop providing services because payments simply are not covering the fixed costs.”

Congress can eliminate these unintended consequences by rebalancing the health care system on primary care.

Central to the AAFP’s position are:

  • Repealing the SGR: Preventing Medicare payment cuts from occurring and ending the practice of applying short-term patches to the SGR.
  • Enacting permanent payment reform that includes the patient-centered medical home that blends fee-for-service with a per-patient, per-month fee to cover care coordination, along with payment for quality improvement.
  • Implementing a positive payment differential of at least 3 percent for primary care physicians who are providing primary care services.

“The current flawed approach does not serve Medicare patients well and must be changed to reflect the value of primary care and family physicians,” the testimony says. “Primary care enhances the performance of health care systems. It is not the solution to every health-related problem, but few, if any, health-related problems can be adequately addressed absent excellent primary care.”

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Founded in 1947, the AAFP represents 136,700 physicians and medical students nationwide. It is the largest medical society devoted solely to primary care. Family physicians conduct approximately one in five office visits -- that’s 192 million visits annually or 48 percent more than the next most visited medical specialty. Today, family physicians provide more care for America’s underserved and rural populations than any other medical specialty. Family medicine’s cornerstone is an ongoing, personal patient-physician relationship focused on integrated care.  To learn more about the specialty of family medicine, the AAFP's positions on issues and clinical care, and for downloadable multi-media highlighting family medicine, visit For information about health care, health conditions and wellness, please visit the AAFP’s award-winning consumer website,