Competition among health systems is heating up. Access to the latest technologies, superstar specialists, prominent advertising campaigns, notoriety on Top 100 lists, an array of retail health services and amenities and, increasingly, ownership of provider-sponsored health plans are table stakes in the ranks of these top-tier systems.
But for these megasystems, as well as for smaller independent and system affiliated hospitals, the key to sustainable success is likely dependent on the scope and strength of primary care services and programs that enable access to patients and contracts with payers. Primary Care 2.0 is the difference-maker: it’s fundamentally different from what we offer today.
Primary Care 1.0: The Past
“Marcus Welby, M.D.” ended its wildly successful seven-year run on ABC Televsion in 1976, beating its prime time competition and establishing Robert Young’s character as the prototype for primary care. His white hair, warm eyes, caring spirit and quiet confidence reinforced the unfettered trust of baby boomers busy building their careers and families and seniors adjusting to the realities of their mortality.
In the 40 years since, primary care has seen its prominence in the health system slip. It’s documented that primary care physicians — general internists, pediatricians, family practitioners and ob-gyns — have lower incomes and higher practice overhead than the majority of their specialist peers. It’s been shown that much of their work involves preventive health and simple diagnoses that advanced practice nurses and nurse practitioners can make safely and effectively. In many medical communities, they’re treated as second-class citizens by their peers and in most, they’re expected to shoulder responsibilities for care coordination and population health without the information technologies that would sharpen the efficiency and effectiveness of their efforts.
So here’s where we are in Primary Care 1.0.
A 2013 article in the Journal of the American Medical Association states that demand for primary care services is soaring: 46 percent of Americans have one or more chronic conditions, representing 84 percent of all medical expenditures. The majority of these are diagnosed and treated in a primary care setting, including initial treatment for mental illnesses representing one-third of their interactions, according to the American Hospital Association's Future Scan 2015.
The supply of traditional primary care providers falls short of the demand. Many physicians are burned out or frustrated, complaining that they have too little time to spend with their patients, and don't expect to see things change. The Bureau of Labor Statistics reports that the number of primary care physicians is 275,000, or roughly one in three practicing clinicians. The projected shortage is 28,000 to 94,000 based on its analysis.
The market — consumers, employers, insurers — is demanding major changes in primary care: At the top of the list are two: a holistic clinical model and connectivity. Consumers and employers, especially millennials and baby boomers, are forcing an approach to their primary care coverage that goes well beyond visits and prescriptions. They expect attention to well-being — physical and mental health, dental services, eye care, and nutrition — and assistance with an individual’s finances when it's related to their health. Employers get it: Consulting firm Oliver Wyman says they lose $90 billion annually due to poor care coordination that an effective primary care system could have addressed. And the online market — which is a large and growing majority — is impatient with providers who do not avail them with access to their health records, connectivity to other parts of the system and the ability to interact with their caregivers online. Regrettably, much of the traditional primary care modus operandi is geared to Medicare enrollees who express lower preference for these two, and less attention to the market that will be their future.
The economics in primary care is problematic. The costs of operating a primary care practice are high and physician take-home pay is low relative to that of their peers. As a result, independent primary care practitioners lag other specialties in IT investments including meaningful use, and, as a result, most are becoming employees of hospitals, larger groups or health insurers.
Let’s face it. The tests and procedures ordered by specialists drive the economics of our health care system. Hospitals cater to surgeons and pay big bucks in high-demand specialties. Drug companies with promising compounds in hard-to-treat conditions count on specialists' endorsement and engage them in clinical trials. In nonurban communities, primary care physicians have more clout; in urban markets and in academic medicine, they haven't received the attention they deserve. In most hospitals, making significant investments in primary care is often subordinated to capital projects that produce immediate revenues, and these usually involve specialty programs.
Primary Care 2.0: The Future
The Affordable Care Act expanded insurance coverage through expansion of state Medicaid enrollment, and tax credits offered eligible enrollees in health exchanges. It defines primary care more broadly than MDs and DOs, including advanced practice nurses and others as part of the mix. And it places a premium on accessible, effective primary care services to reduce inappropriate utilization of hospital emergency rooms and avoidable admissions. In many ways, primary care is the key to health reform. Expanding insurance coverage while improving outcomes and managing costs is a perfect storm unless access to primary care is at the center of these efforts. But it’s a different model with different economics.
The Clinical Model in Primary Care 2.0: Primary care services will be offered through teams of primary care providers in which an MD/DO is the team leader. Pharmacists, nurse practitioners, nutritionists, dentists, psychologists, optometrists, health coaches, alternative health providers and others will be teammates serving a panel of 5,000 to 10,000 or more individuals on an ongoing basis. Referral networks in post-acute care will be monitored closely and connected via patient-management registries. Patient adherence and medication management will be measured and improvements pursued. Prescription foods will be as important as prescription drugs, and the individual’s well-being, including his or her social circumstances, central to the team’s planning. A 2014 PwC Health Research Institute report shows that two-thirds of the U.S. population say they’re comfortable seeing a nurse practitioner or midlevel provider for their primary health needs, and polls suggest pharmacists in the 56,000 retail settings are trusted for primary care counsel. So, access to the physician per se is not the issue; it’s access to primary care services.
The economics in Primary Care 2.0: The average costs for a hospital emergency departmente visit is $1,354 vs. a primary care visit averaging less than $150 nationwide. According to the Department of Commerce, the average household spends 20 percent of its discretionary spending on health care, with high-deductible plans becoming the dominant form for employee benefits. The 2015 Milliman Medical Index puts the total costs for a family of four at $24,671 last year. The average co-pay for a primary care visit to a traditional practice is $23 vs. $36 for a specialist. But in a high-deductible plan, individuals are generally out-of-pocket the entire amount, prompting many to delay preventive care altogether. And acceptance of primary care services in alternative sites (6,400 urgent care centers, 1,840 retail clinics), expansion of online primary care services vis a vis telemedicine and self-monitoring devices in the digital health domain is driving efficiencies and access up and costs down.
Since passage of the ACA in March 2010, the Centers for Medicare & Medicaid Services has been relentless in expanding the significance of primary care in its programs: CMS’ Medicare Shared Savings Program (begun January 2012), readmission penalty (October 2012), and hospital value-based purchasing programs (October 2012), depend heavily on well-orchestrated primary care management. In its MSSP (accountable care organizations), of the 97 that achieved savings bonuses in the second year of the program, 46 percent of the bonuses went to primary care physicians, 20 percent to specialists and 27 percent to the hospitals. And earlier this month, it announced its Comprehensive Primary Care Plus initiative which will pay PCPs a monthly fee to manage populations in 20 regions. Primary Care 2.0 is clearly the focus of Medicare’s attention going forward.
Following Medicare’s lead, insurers and employers are putting intense pressure on the health system to re-engineer its primary care offerings with a goal of reducing avoidable demand for acute and specialty services where effective primary care coordination is essential.
For hospitals and health systems, navigating the transition from volume to value requires a clinically integrated network of connected providers that’s differentiated by the strength, capabilities, depth and the scope of its primary care services program. Primary Care 2.0 is the front door to a health system’s widening array of programs and services and necessary to its survival. But the distinction between Primary Care 1.0 and 2.0 must be understood and investments made to accommodate the change saee table].
Primary care 2.0 is not a re-run of Marcus Welby. It’s arguably the most urgent market imperative for the health systems intent on preparing for the future.
Primary care 1.0 vs. 2.0, a comparison
1.0: Access to patient
2.0: Guided self-care
1.0: Physicians, NPs, APNs and PAs
2.0: Physicians, NPs, APNs and PAs plus psychologists/counselors, dentists, optometrists, pharmacists, nutritionists, health coaches and financial counselors
2.0: Office, retail, employer clinic, virtual
2.0: Clinically integrated network, hospital/health plan partner
1.0: 1,000 to 2,000 per physician full-time equivalent
2.0: 5,000 to 10,000-plus per team
1.0: Contracts with plans/employers on discounted fee for service/limited capitation basis
2.0: Contracts with plans or employers based on full/partial capitation and/or concierge services paid directly by individuals and/or contracts with health systems and/or retail elective health services
1.0: Productivity (visits) plus patient satisfaction
2.0: Productivity (access online and visits) plus user experience, efficiency, outcomes
The path from Primary 1.0 to 2.0 is inevitable. The investments necessary to make the transition will provide a negligible return unless the fundamental transition from “patient” to “individual” is recognized across the primary care organization.
Paul H. Keckley, Ph.D., does independent health research and policy analysis and is managing editor of The Keckley Report, a weekly blog free to subscribers at www.paulkeckley.com. He is a member of Health Forum’s Speakers Express. For speaking opportunities, please contact Laura Woodburn.