The Future of Primary Care Compensation?

May 17, 2010 in Health Care "Reform", Medicine by RangelMD

It’s absurd the way primary care providers are compensated because our involvement with patient care does not end the second we walk out of the exam room.

There are the endless medication refill requests, the phone calls for everything from emergencies, to medication effects, to insurance issues, dealing with pre-authorizations and arranging referrals and imaging tests, coordinating care with specialists and allied health services such as home health and physical therapy, filling out forms for insurance, disability, medical excuse, and durable medical equipment, and review of medical literature for conditions that we are unfamiliar with. We are inundated with more of this “extra-visit” work than specialists and very little of it is reimbursable.

Primary care providers should NOT be reimbursed on a per visit basis. Our duties extend well beyond the exam room but unlike specialists we don’t have many expensive procedures that we can perform in excess and make a lot of money. We have to squeeze in more and more patient visits per day in order to keep up with declining reimbursement and raising overhead costs.

This results in spotty care, patient dissatisfaction, long wait times, physician dissatisfaction in practicing “conveyor belt” medicine, and doctor burn-out. There needs to be a better way. Dr. Fournier of the University of Miami Leonard Miller School of Medicine has suggested one such method.

Why not simply mandate that all payers, public or private, pay a capitation fee or salary designed to assure that primary care doctors can achieve a professional standard of living? In exchange, primary care doctors would provide continuing, comprehensive primary care (including night call and preventive services) for a reasonably sized panel of patients. For the sake of discussion, I would suggest a salary and fringe benefit package of about $300,000 per year (in 2009 dollars) to care for 2000 patients, ($150 per patient), with incentives for special circumstances (e.g., working in underserved communities) or special services (e.g., delivering babies). All other fees, deductibles, and copayments would be waived. The problem of physician-generated demand would be eliminated, which would radically reduce costs to insurers. Billing would disappear. Patients would have open access to their primary care physicians. Freed from the constraints of billing for the traditional encounter, primary care doctors could employ innovative methods to deliver primary care, including the Internet and group encounters.

Dr. Fournier hits the key concepts:

  • End primary care compensation based on patient visits.
  • Base compensation primarily on providing comprehensive care for a set number in the patient panel.
  • Eliminate co-pays and other financial disincentives for patients.
  • End per visit billing and CPT coding which adds lots to expensive paperwork and very little to patient care.
  • Eliminate the need (and greed) of primary care providers to tack on excessive numbers of in office services to make up for poor per visit reimbursement rates.

Yes, insurance companies and Medicare could actually save money by spending more on primary care. What a concept.

But I disagree with Dr. Fournier about the numbers. A patient panel of 2,000 is very large and this requires a sizable office size and office staff to be able to deliver all of this care since 2,000 patients usually generate a lot of daily visits, phone calls, refill requests, etc. The overhead costs for primary care are the largest of any medical specialty and they can consume 50- 60% or more of a physician’s billing. This would mean that a physician who gets paid $300,000 per year to care for 2,000 patients at $150 per patient would actually bring home only $120,000 which is very close to the average pay for family practice and internal medicine docs. In this case, physicians are better off working the 9-5 shift in the “zero-incentive” socialistic VA system.

I’m hoping that Dr. Fournier is talking about a per patient compensation of $300 for a true annual salary closer to $300,000 after overhead costs.¬† Yet even at this seemingly high rate, the fact remains that¬† $300 per year is only about 1/3 of what hundreds of millions of Americans pay per year for cable TV.

The question is how to get the government and private insurance companies to change to this compensation model. What we need is data that this service will actually improve care AND save money!

Please share.