providing more with less: primary care bright spots

© 2015 A. Milstein/Stanford Univ

Providing More with Less: Primary Care Bright Spots

Melora Simon MPH Stanford Clinical Excellence Research Center

Family Medicine Congressional Conference May 12, 2015

The Value of Primary Care

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Copyright 2014 American Medical Association. All rights reserved.

Health Reform and Physician-Led Accountable CareThe Paradox of Primary Care Physician Leadership

Even though most adult primary care physicians maynot realize it, they each can be seen as a chief executiveofficer (CEO) in charge of approximately $10 million ofannual revenue. Consider that a typical primary care phy-sician has approximately 2000 patients, each of whomannually accounts for about $5000 for health carespending. Although primary care today accounts for only5% of that spending, the decisions made in the primarycare setting have important implications for down-stream medical care, such as subspecialty referrals,imaging and other medical testing, invasive proce-dures, and hospitalizations. A group of 100 adult pri-mary care physicians could potentially influence al-most $1 billion in health care spending.

Yet for most physicians, practicing today certainlydoes not feel like being a CEO. Physicians see opportu-nities every day to improve quality and lower costs, butin a recent survey, the vast majority of physicians re-ported that they should not be expected to play a cen-tral role in controlling costs.1 They expressed this vieweven though most also reported that the best ways tocontrol health care costs are through promoting conti-nuity of care, using cost-effective treatments, chronic dis-ease care coordination, prevention and adhering to clini-cal guidelines—all of which are controlled or influencedby physicians.

Primary care physicians understand that the cur-rent fee-for-service model does not provide adequatesupport for these interventions, and oppose cost-cutting approaches within that model, such as across-the-board payment cuts, limits on coverage, or in-creased administrative barriers such as prior approvalsand contested payments that will further reduce theirincome. Despite this, only 7% of physicians enthusias-tically supported moving away from the familiarity af-forded by fee-for-service.1

This disconnect and the resulting frustration indi-cate that primary care physicians have been under-used in leading health care reform. Typically, value-based purchasing schemes and pay-for-reportingmeasures have made only modest adjustments in phy-sician reimbursement as incentives to improve qualityand efficiency.

Primary care medical home payments have sup-ported the implementation of structural capabilities be-lieved to improve quality of care. But without direct in-centives to control costs, implementing medical homecapabilities alone may not be sufficient to reduce emer-gency department use, influence specialty and hospi-tal care, or affect other major determinants of totalcosts.2

Moving beyond the typical medical home frame-work, physician-led accountable care organizations

(ACOs) in Medicare, Medicaid, and private insuranceplans could make primary care physicians more likeCEOs, with accountability for the overall quality and costresults of their patients. In the Medicare SharedSavings Program, primary care services are the basis forassigning patients to the ACO, and 75% of the gover-nance board seats must be held by ACO physicians. IfACOs demonstrate savings in the total cost of care whilemaintaining or improving quality and patient experi-ence measures, those ACOs will be able to receive up tohalf of the savings without taking on downside finan-cial risk.3 In many private insurance plans and multi-payer collaboratives, primary care physicians receivesome of their payments on a case basis (like a medicalhome) and also receive a share of the savings for reduc-ing overall spending growth.

A key difference between physician-led ACOscompared with other ACOs, such as those organizedby hospitals, is that physician-led ACOs have clearerfinancial benefits from reducing health care costs out-side the physician group, which are much larger thanphysician costs. In contrast, hospital-based ACOs alsoreceive shared savings for avoiding hospitalizations orshifting care to a less costly ambulatory setting, butthose cost reductions are lost revenue for the hospital.The interests and incentives of physicians in physician-led ACOs are not similarly conflicted, and the benefitsare more concentrated.

Because almost 40% of emergency department vis-its and roughly 10% to 17% of inpatient hospitalizationcosts are estimated to be preventable,4 primary care hasopportunities to help reduce spending. Physician-ledACOs could also create efficient networks through theirreferral patterns, by partnering more closely with spe-cialists, hospitals, diagnostic, and postacute services thatprovide evidence-based high-value care and that com-municate and coordinate effectively. These models ofcare could also be more satisfying professionally be-cause they require more intense patient engagement,align finances with a quality improvement mindset, andprovide for greater autonomy.

A total of 5.3 million Medicare beneficiaries arenow in Medicare ACOs, and physician-led ACOs haveaccounted for most of the recent growth in the Medi-care ACO program. With an additional 57 organiza-tions added in the fourth quarter of 2013, these enti-ties have become the most common type of ACO inthe United States (in numbers if not population), with260 physician-led ACOs compared with 238 hospital-sponsored entities.5

One example is the Palm Beach ACO, which is self-funded by physicians in independent practices and hasa service base of 30 000 Medicare beneficiaries. The

VIEWPOINT

Farzad Mostashari,MD, MPHThe BrookingsInstitution,Washington, DC.

Darshak Sanghavi, MDThe BrookingsInstitution,Washington, DC.

Mark McClellan, MD,PhDThe BrookingsInstitution,Washington, DC.

Author Reading atjama.com

CorrespondingAuthor: MarkMcClellan, MD, PhD,The BrookingsInstitution, 1775Massachusetts Ave NW,Washington, DC 20036([email protected]).

Opinion

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Every primary care physician can be viewed as a CEO with $10 million in annual budget responsibility.

JAMA: May 14, 2014: Primary Care Physicians as CEOS

•  Attribution and risk adjustment •  Members a?ributed to group having maximum number of claims •  Member-‐level risk-‐adjustment using 3M’s Clinical Risk Group soIware (CRG)

•  Cost basis •  Allowed amounts •  Standardized costs using a fee schedule

•  Composite of > 40 HEDIS, NQF endorsed, or Medicare Star measures •  Balanced across process of care, prevention/wellness, and medication

management domains and specific conditions •  Weighted to reflect a hybrid of clinical and empirical importance

•  Clinical -‐ medicaOon management, prevenOon-‐wellness, and diseases such as diabetes, asthma, CVD, etc.

•  Empirical -‐ Determines measures, weighOng to maximize discriminaOon between providers, idenOfies measures to remove as same in discriminaOng providers

Total cost of care

Identifying Bright Spots: Double Top-Quartile National Ranking

Quality

Approach informed by consultation with diverse panel of experts in clinical performance assessment.


Rare But Powerful

<5%

10,000 scorable sites

In top quarOle on both quality and cost

•  Risk-‐adjusted per capita total cost of care > 20% lower than average

•  >10% higher on quality composite


Bright Spots found in both high and low cost labor markets

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Bright Spot Sites are Diverse

Fee-for-service (FFS) reimbursement •  Greater Minneapolis,

MN •  Greater Rochester, NY Capitated •  Greater Orlando, FL

Capitated •  Greater Tampa, FL

Fee-for-service •  Phoenix, AZ •  Memphis, TN •  Greater Dayton, OH •  Greater Cincinatti, OH Capitated •  Orange County, CA

Independent, primary care only

Independent, multispecialty

Part of a health system

Other •  Workplace clinic: San Antonio, TX •  Federally Qualified Health Center: Greater Boston, MA

Shared Features of Idol Sites

Deeper patient

relationships

Wider scope of

responsibility

Team-based practice

organization

Deeper Patient Relationships

•  Always on •  Conscientiousness and

conservation ü  Adherence to guidelines ü  Moderately adjustable care

intensity ü  Informal shared decision-‐making,

advanced care planning, & other forms of choosing wisely

•  Complaints are gold

Wider scope of responsibility

•  Responsible in-sourcing •  Staying close •  Closing the loop

Team-Based Practice Organization

•  Upshifted staff roles •  “Hived” workstations or rules-based

decision making/standard work •  Balanced compensation •  Investments in people, not space &

equipment

Next steps: Validation and Spread

•  Builds on Patient Centered Medical Home and Choosing Wisely (both are necessary, but not sufficient)

Also need: •  Payment models that support and incentivize

this way of practice

•  Transparency for primary care physicians about their performance on quality and total cost of care, as well as their available referral options

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To learn more…

More detail, including profiles of the highlighted providers at http://petersonhealthcare.org/most-valuable-care If you are interested in learning more or getting involved in spreading this model of care, email [email protected]

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providing more with less: primary care bright spots

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