Cutting the Tie Between Primary Care and the Fee-For-Service Model

Have you ever considered the “what ifs” that might lead to better primary care for your employees?

• What if you could sever the tie between the traditional fee-for-service approach and primary care?
• What if you could align the incentives that influence doctors’ decisions with your goals for better health care for your employees?
• What if you paid less for unnecessary specialty care or low-value care and put some of those savings toward advanced primary care?

If these “what ifs” have you saying “sign me up to learn more,” then you might want to look into comprehensive primary care for your enrollees.

Exploring a Movement

The Alliance is exploring comprehensive primary care to learn more about its potential impact on self-funded employers. Our goal is to identify ways to deliver advanced primary care, which improves health care while reducing costs.

Dr. Michael L. Tuggy recently explained key differences between fee-for-service primary care and comprehensive primary care for Alliance staff. Tuggy is a family practice physician who is vice chair of the board for Family Medicine for America’s Health, which is working to improve the health care system and demonstrate the value of “true primary care.”

What is Comprehensive Primary Care?

Tuggy said comprehensive primary care puts the focus on patients by breaking with the fee-for-service model, where delivering more care generates more revenue.  Instead, comprehensive primary care clinics are typically paid on a per-patient, per-month basis to meet all the patient’s primary care needs.

This allows primary care clinics to focus on comprehensively addressing patients’ needs. That might mean managing chronic conditions; conducting alternative visits like email or phone visits; changing how patients are steered to specialists; or simply being available to answer patients’ questions 24 hours a day, seven days a week.

Comparing Incentives between Fee-For-Service and Comprehensive Primary Care

Fee-For-Service

• Each visit generates a fee, so number of “patients seen” matters.
• Only face-to-face interaction counts.
• Doing things to patients – labs, scans, etc. – increases payment.
• Not responsible for care outside of office visit.
• Patient outcomes don’t matter, payment does.

Comprehensive Primary Care

• Practices are paid per patient per month, so the number of total patients under care matters.
• Any type of interaction – face-to-face, telephone, email, etc. – is encouraged.
• Success is measured by creating a positive patient experience; a poor experience means patients leave or get sicker.
• Accountable for patient care 24/7.
• Outcomes matter and significantly impact payment.

Tuggy said comprehensive primary care includes:

• Direct management of common and complex conditions, including routine outpatient procedures that are done at the primary care office instead of being referred to specialists.
• Acute and chronic care management.
• Population health approaches, such as using data to identify high-risk patients and conduct proactive patient outreach.
• Remaining accountable for primary care access for all patients served by the practice.

Patients see the difference because appointments typically last 30 minutes or more, compared to 15 minutes in fee-for-service settings. Patients also get access to same-day care when needed, which helps them avoid using urgent care or emergency services.

Longer appointments lead to high levels of trust, which also helps decrease costs over time.

Switching the Payment Flow to Fee-For-Service

Comprehensive primary care also changes where money flows for care. More funds are spent on advanced primary care, with less money spent on high-cost specialty care.

In a typical fee-for-service model, Tuggy said 4 to 7 percent of the total cost of care is spent on primary care services. But in a comprehensive primary care model, 10 to 15 percent of the total cost of care is allocated to primary care.

As a result, Tuggy said health care costs typically drop 15 to 30 percent when a comprehensive primary care model is used in place of a fee-for-service model. For example, Tuggy worked at a family practice clinic that trained medical residents using a comprehensive primary care approach, resulting in 20 percent savings in health costs.

It may take time to achieve these savings, as employers must invest in a new primary care model to make other costs go down. But over time, generally within 12 to 18 months, savings will add up as more care is provided in a primary care setting; more patients are guided to high-value specialists; and the primary care team oversees more of the patients’ care.

Onsite and Near-Site Clinics Can Do This Too

Some Alliance members with onsite clinics use similar approaches to offer high-value care and reduce costs.

Whether the care is onsite, near-site or provided at a physician clinic, the goal is to add value by delivering the kind of primary care that patients – and employers – need and want.