Q&A: Lessons on Physician Payment Reform from CDPHP

Thursday, February 9th, 2012
This post was written by Patricia Donovan

CDPHP’s medical home project aims to reform not only the practice of primary care in its network but also the payment to its physicians. We recently spoke with CDPHP’s Dr. Bruce Nash, senior VP of medical affairs and CMO, about motivating physicians for practice and payment reform, positioning for accountable care organizations, and replacing current productivity-only models.

HIN: Are the primary care physicians (PCP) becoming involved in practice reform because they know it is the right direction for healthcare or because of the mandates and the additional funding opportunities?

Response: (Dr. Bruce Nash) In our marketplace, our physicians are doing it because they view it as the only hope for primary care, not only for medical students who chose it as a career. The practice of primary care for many of them has become a drudgery in this hamster wheel of trying to see more and more patients faster and faster. The compensation simply doesn’t support them. We have a great deal of enthusiasm among our physicians.

One of the younger physicians came to me about halfway through the project and said she wanted to thank me. She had stopped taking medical students to precept them some years before because she didn’t know what she should tell them about why to go into primary care medicine. Now her hope is rejuvenated and she has resumed that activity.

HIN: In multi-specialty groups, how do you incorporate the PCMH and quality payments for PCPs into a current productivity-only base formula with specialists?

Response: (Dr. Bruce Nash) One of the real challenges you get with payment models, and one of the undoings of capitation in the ‘90’s, was that, although a global payment would be paid out within a large multi-specialty group, that global payment would be divided up by productivity measures. You never dealt with the overall driving factor of that. It would be important to maintain a form of global budgeting for the overall group.

Whether it is this model or something similar, the PCPs are operating under this, and it is a salary equivalent. A capitation is a fixed amount of money for one person. A salary is a fixed amount of money for a panel of patients. Allowing the physician and charging the physician with the responsibility of managing the patients effectively within that doesn’t mean face-to-face visits on a repeated basis. It means looking at it and saying, “What is the highest quality, most cost-effective approach for the care of that population?”

HIN: How is CDPHP positioning for ACOs?

Response: (Dr. Bruce Nash) The ACOs are conceptually entirely aligned with everything I’ve spoken about. We are discussing the word ‘accountable’ for a population of patients being paid on a global basis. The challenges are numerous, whereas on the West coast, there are delivery systems that are fairly well configured to function as the ACO. However, it is less common throughout most of the country.

We have circumstances where hospitals are taking the lead in trying to develop ACOs, sometimes by buying up physician practices for as much as they did in the ‘90s, although for a different purpose. However, it is unclear how the hospital sector can lead that initiative given that is where the bulk of the savings need to come from to change the reimbursement incentives. We are in an active dialogue because of who we are, our close ties with the physician community and our physicians. In our markets, large would be 85 to 150 physician groups. If they want to enter into the ACO model as being put forward for FFS Medicare, they don’t have the infrastructure to manage it in the way it needs to be managed, because that is what the health plan does. We view ourselves as a Medicare Advantage Plan and an ACO with our providers.

We are having dialogue with our physicians and talking about how the health plan can partner with them to make them successful. Not only for our members, but for all their members.

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