A promising alternative payment structure

Felice J. Freyer’s article hit the nail on the head by citing the huge income disparity in annual earnings between primary care physicians and specialists. This disparity has existed for decades, and until it is eliminated, the shortage of PCPs will continue.

The underlying cause of this disparity is a payment methodology used by Medicare and most insurers since 1992, the resource-based relative value scale system (RBRVS). It assigns payment level to services and procedures based on three components: physician work (time and skill), practice expense, and professional liability insurance cost. Unfortunately, this system unfairly values procedures done by specialists more than the cognitive expertise used by primary care physicians in managing a patient’s overall health.

But there is hope. A transition well underway across health care reimbursement is a shift to accountable care organizations and value-based payment — in other words, paying physicians (and hospitals) based on the quality indicators and total medical cost they influence rather than basing reimbursement primarily on the volume of services or procedures performed. Many primary care physicians are recognizing the benefits of accountable and value-based care and are joining or affiliating with ACOs.

However, the only way to fundamentally alter physician reimbursement such that primary care physicians are paid commensurate with the value they provide is to replace the RBRVS system with a different methodology — one that recognizes the value of comprehensive primary care and the influence of primary care physicians on total medical cost. In a recent study of patients in the Veterans Health Administration system, the average annual total cost of those who have a primary care physician relationship was 27 percent lower than the cost of patients without a PCP.

ERNIE BOURASSA

Yarmouth Port

The writer, now retired from the health care industry, worked for 24 years for UnitedHealthcare following 11 years at Prudential Insurance Company.