Primary care faces financial challenges. This could provide assistance.

Numerous health authorities assert that U.S. primary care is in turmoil, with a surge in appointment demands and a deficit of physicians. A novel five-year trial could represent part of the solution.

Initiated by provisions of the Affordable Care Act aimed at enhancing funding innovations, the program, ACO PC Flex, aims to augment primary care financing while motivating doctors to allocate the resources towards preventing severe illnesses and costly hospitalizations. Advocates assert that this will create a healthy cycle of superior, more comprehensive primary care opportunities.

Soleil Shah, a policy researcher and medical professional at Harvard-associated Brigham and Women’s Hospital, co-wrote a recent editorial regarding the new undertaking in the Journal of the American Medical Association. In this modified dialogue with the Gazette, Shah discusses some of the hurdles facing primary care and elaborates on the possible advantages of ACO PC Flex.

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What is the issue with U.S. primary care?

Several factors contribute to the current situation. Firstly, there’s the pressure on clinicians to manage a large number of patients within a limited timeframe. This situation is worsening. More frequently, primary care practices are managed by large corporate entities such as health networks and insurance companies. These corporations aim for clinicians to see as many patients as possible since increased volume translates into greater charges.

Secondly, reimbursement rates for primary care are quite low in comparison to other providers. Our healthcare system emphasizes specialty care and places disproportionate value on rapid office procedures — such as surgeries performed by dermatologists and ophthalmologists — over primary care, where doctors conduct annual assessments, offer preventative care, and address acute medical issues.

Another complication is the enormous amount of medical information available today. It is overwhelming for anyone to manage, and as data and understanding expand at a rapid pace, the scope of primary care is increasing swiftly.

If primary care were properly valued, would practitioners earn as much as neurosurgeons? Emergency room doctors?

I can’t specify the exact figure, but they would be compensated significantly more than they are now. Some suggest revising the fee structure so that specialists earn less and primary care receives a higher rate. However, I believe this is unlikely. For decades, political groups representing different specialties have advocated in Congress to uphold high rates. These organizations wield significant bargaining power, while primary care has historically struggled to elevate its rates in comparison to cardiologists and other specialists.

To enhance primary care through a different approach, have we established accountable care organizations?

Accountable care organizations present an alternate model for compensating doctors. Their purpose is to motivate physicians to deliver high-quality care at a lower cost for patients. Within an ACO, physicians receive payment as they typically would, which is fee for service. However, in an ACO, if they manage to keep their expenses below a specific threshold — for instance, if the limit is $100,000 and they end up spending $80,000 — the leftover funds are recognized as shared savings. A portion is given to providers as an incentive while another portion is retained by the government as savings.

The concept of shared savings has gained traction, and ACOs are a promising avenue for payment innovation within healthcare. They encourage doctors to prevent hospitalizations, which come with substantial medical costs. ACOs have been in existence for a decade, and the latest iteration — a new modality of ACO — commenced in January: ACO PC Flex.

Does this new initiative increase compensation for primary care?

In a standard ACO model, doctors receive payment after delivering services. However, here, the payment is issued prior to any services being provided. This is referred to as “prospective payment,” where the ACO receives a sizable sum before any care is rendered. This payment is based on the average compensation within the county where the ACO operates, with adjustments made for patients who are medically complex. The anticipated upfront payments to these groups represent a substantial increase compared to historical compensation rates for primary care physicians. We are optimistic that this will assist these ACOs in developing stronger infrastructure surrounding primary care and generating special programs aimed at preventing hospitalizations. It creates motivations for doctors to engage more in patient counseling and other non-traditional clinic activities to promote their health.

Additionally, in regular ACOs, when a service such as ordering labs for a primary care patient is conducted, that cost counts against your spending limit — $100,000 in our previous example — ultimately impacting the potential shared savings. This could deter investment in primary care. The ACO PC Flex model addresses this differently, and the initial payment does not count as an expense.

These design elements are intended to promote increased primary care, align the compensation of primary care providers more closely with other specialties, and, ideally, motivate greater preventative care initiatives.

If successful, could we witness its replacement of other primary care reimbursement structures?

This is indeed the fundamental question. These models apply to Medicare beneficiaries, but, if successful, to what degree will it extend to those not enrolled in Medicare? While benefits for Medicare recipients are welcome, there is also a pressing need for more funding for primary care providers in Medicaid, particularly because those are low-income patients with lower reimbursement rates. Moreover, they often represent the patients with the highest needs and would derive the most advantage from enhanced primary care services.

If this program proves successful, commercial insurance will likely be motivated to follow suit with similar endeavors, especially if ACOs achieve savings through this arrangement. If savings are realized by keeping patients out of hospitals and cutting down on the overall care costs, private insurance companies may take an interest in implementing analogous practices.