Innovations in Primary Care: Moving Beyond Fee-For-Service

The American medical system has long operated under a fee-for-service model in which only specific, narrowly-defined medical services qualify for reimbursement from insurance companies. This system is reasonably well-suited for procedure-oriented specialties in which services with clear indications, processes, and outcomes such as colonoscopy or knee replacement can be appropriately paid for.

In America’s fee-for-service system, reimbursement for primary care services is limited to short office visits and certain outpatient procedures (such as a joint injection). Many primary care doctors have felt that they could offer better care for their patients if the payment structure allowed for more flexibility in services offered, but opportunities to test this hypothesis have been limited.

Today, three groups in the Seattle area – Landmark, Concerto, and Iora – are independently demonstrating the value of flexibility in primary care to improve patient outcomes at overall lower cost. They’ve accomplished this by arranging for alternative payment models with local Medicare Advantage plans (private insurance plans who contract with Medicare to provide health insurance to seniors). Rather than operating under fee-for-service, these companies get a per-member, per-month payment. This payment structure provides a flexible budget with which they can offer services that don’t necessarily fit into the established fee-for-service structure.  

While there are some differences between these three companies, their value proposition is similar: If you give us flexibility to move away from procedure-oriented reimbursement, we can deliver higher quality health care to your customers in ways that maintain or improve quality while reducing costs. So far, all three have made good on that promise and through shared-savings agreements, have profited along the way. In short, they’ve accomplished (in part) the transition from process-based to value-based health care delivery that has been a major goal of the health care system for years.

Three examples of effective interventions in these groups are:

1) Redesigned electronic health record (EHR) systems.

This often comes as a surprise to those who do not work in medicine, but the primary purpose of most EHR systems is to facilitate billing in a fee-for-service reimbursement model. Companies such as EPIC and Cerner can charge hospitals and medical practices exorbitant sums for their products because they in turn allow these practices to bill insurance companies at high rates based on “improved” documentation (this is their value proposition). The secondary goal of these systems is to bring medical systems into alignment with Meaningful Use legislation which offers providers higher federal reimbursements in exchange for certain EHR targets. Patient-care oriented functionality of these systems is only of tertiary concern.

Landmark, Concerto, and Iora, on the other hand, have designed their own EHR systems from the ground up which allow care teams to fluidly coordinate the preventive and therapeutic services that a client needs at any given time. For example, in one of these systems a single dashboard shows what all the screenings or tests a patient is due for and how long it has been since a person on the medical team has checked in on the patient. This functionality effectively systematizes and de-skills much of the work of preventive care rather than relying on MDs to use up valuable time doing this by hand.

2) High quality medical assistants

Traditionally, medical assistants perform basic tasks necessary to the workflow of a primary care practice including bringing patients from the waiting room to their exam room, checking vital signs, and giving vaccinations. Because only provider-based service can be billed to insurance, fee-for-service incentivizes medical practices to limit utilization of medical assistants to services that make providers more efficient at billable services.

Training medical assistants (referred to as health coaches at some sites) to a higher level allows them in turn to assume more responsibilities including reviewing patient’s records to find which preventative health measures they were due for, performing screening tests, coordinating follow-up appointments, and completing paperwork. This of course is facilitated by more advanced EHR systems which allow medical assistants to safely and effectively accomplish these tasks without the advanced training of an doctor.

3) Strong focus on social determinants of health

Social determinants of health are those factors that effect patients’ health, but do not strictly fit into a disease model of health. These include factors such as food insecurity, housing instability, or social isolation. Although the medical establishment is increasingly recognizing that addressing social determinants of health is crucial to improving health outcomes, interventions based on this knowledge are extremely limited in general practice. This is in part because these interventions are not reimbursed by insurance companies and so medical practices must absorb the cost of implementing these interventions. Landmark, Concerto, and Iora, however, each integrate social worker into their care model to proactively address social determinants of health, recognizing that such interventions are generally cost-effective.

Beyond demonstrating the potential of moving past fee-for-service payment for medical care, these practices show what is possible when we transition from a health insurance system (which primarily exists to limit the financial harms of illness) to a health care system (which primarily exists to prevent and treat illness).

I personally would love to see this more broadly applied (for example, a universal, state-funded program that offers per-member, per-month, risk-adjusted reimbursement for primary care services) which is one of many reasons I am a strong advocate for true universal health care (likely through reform and expansion of Medicare and/or Medicaid). Until we get to that political moment, however, it is good to continue these experiments to improve primary care within our flawed health insurance system.

Author: Harrison Kalodimos

I'm a family medicine resident at Swedish Medical Center in Seattle.

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