Last week, CMS unveiled its new Primary Cares Initiative (PCI) program that aims to enlist participation by a fourth of providers and engage many of the 44 million Medicare beneficiaries who are not enrolled in a Medicare Advantage plan. It immediately drew cautionary support from the American Medical Association, the American Academy of Family Physicians, Physician-Focused Payment Model Technical Advisory Committee and a wait-and-see from the American Hospital Association and other groups.
PCI has two versions: Primary Care First for small or individual practices with two models and Direct Contracting for larger practices or health systems. Each features monthly payments to providers with a range of risk sharing and incentives. Both closely resemble legacy programs: Primary Care First is akin to CMS’ Comprehensive Primary Care model launched in 2012 and its second iteration, CPC+, started in 2016; and Direct Contracting will replace CMS’ Next Generation ACO model. Both are voluntary programs for providers. But caution is justified.
Results for CPC+, the five-year program that launched in 14 regions in January 2017 are mixed: participation levels are high (only 4% of the 3,000 initial practices dropped out in year one) but savings are unknown: In its first annual report, released this month “it is too early to determine the ultimate effects of CPC+.”
The Next Generation ACOs, that began with 53 participants in 2016 showed reduced spending per beneficiary and lower hospital utilization, but 12 dropped out because their costs and risks did not justify continuing with the program.
Federal officials tout the potential for physicians to as much as 50% more by participating in the program slated to start next year. And they believe it will play a major role in lowering Medicare costs. Major. But like so many policy changes in healthcare, the devil is in the detail. The potential impact of PCI to reduce Medicare spending and improve primary care physician take home pay is speculative.
PCI makes sense conceptually but questions about how it will work, how much participating practices will be paid and on what basis, how the growth of Medicare Advantage plans might be impacted, how CMS might modify the program over time and whether it might become mandatory at some point need answers. And perhaps the biggest question is this: Will PCI become the platform for a fundamental shift of attention and resources to primary and preventive health? Will PCI be the bridge from primary care 2.0 to primary care 3.0? Primary Care 3.0: The Front Door to Health System Transformation
PCI is a step in the right direction. It is widely acknowledged that access to primary care that’s continuous, accessible, personalized and holistic is vital to reducing health costs in every population, especially Medicare where unattended chronic conditions become hospital events and high costs. But it’s also problematic: in a cost-containment driven environment, each sector in healthcare will protect its own financial self-interests. Thus, PCI will inevitably lead to intensified conflicts in the system:
Specialists v Primary Care: as Bob Margolis, the iconic CEO Emeritus of Healthcare Partners told the annual gathering of the America’s Physician Groups that the solution is “to export 50% of America’s specialists to Africa and thus improve health on two continents.” It’s a longstanding conflict that PCI might inflame.
Private v public primary care: PCI will likely spark intramural conflicts in the primary care community between private practitioners and primary care providers that serve the poor and most vulnerable. Those who serve vulnerable Medicare enrollees in community health centers, Indian and veterans’ health clinics, free clinics and other settings are often overlooked as federal programs like PCI roll out. And their funding has been systematically cut in recent budgets, adding to financial burdens in many states and communities.
Insurers v hospitals: Insurers have the upper hand in primary care. They contract with almost all 230,000 U.S. clinicians and direct their enrollees to those who avoid non-evidence-based treatments, unnecessary specialty referrals and avoidable hospital admissions. In some markets, they employ primary care physicians directly but, in most, leverage their analytics, relationships with employers and government payers and scale to impact how primary care is delivered. By contrast, hospitals employ 43% of the physicians in the country but depend on specialists for the bulk of their revenues. With possible changes to the Stark law, implementation of site-neutral payments that limit their reimbursement in hospital-owned outpatient settings and the 3.2% Medicare inpatient reimbursement (IPPS) increase for FY2020 proposed last week, hospitals are caught between a rock and hard place. Insurers have the upper hand in most communities.
These conflicts are not new in U.S. healthcare, but they might be intensified by PCI. Aside from these, the bigger question is this: is the U.S. health system prepared to deliver primary care effectively?
It is under-resourced, under-appreciated and inadequately considered by policymakers and legislators at the federal and state levels. Employers get it: they’re investing in on-site/near-site primary clinics for their employees and dependents. Private investors get it: they’re investing in novel primary care models that are holistic, digital and comprehensive. Insurers get it: they’re acquiring primary care practices and enabling narrow networks. Retail pharmacy chains get it: they’re equipping their walk-in clinics to be one stop shops for primary care services. And the public gets it: access to primary care is viewed as key to their health, though only two of three enjoy that relationship today.
PCI is premised on a belief that primary care clinicians and their mid-level associates will willingly take on a custodial relationship with Medicare enrollees in exchange for a few dollars per month for each one.
My bet: PCI will become mandatory and its per enrollee per month custodial fee will morph to a professional capitated payment eventually. It will be the vehicle whereby social determinants of health, physical and behavioral health are synchronized to improve health and reduce costs. But getting from here to there will be messy.
Senior Housing: Health Affairs study finds housing options for seniors are out of reach for 8 million middle income seniors 75+ years of age.’ Private seniors housing industry has generally focused on higher-income people instead. We project that by 2029 there will be 14.4 million middle-income seniors, 60% of whom will have mobility limitations and 20% of whom will have high health care and functional needs…and 54% of seniors will not have enough financial resources to pay for it. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05233 Medicare is not a safety net for older seniors. Its long-term solvency faces huge demographic headwind in a toxic political environment.
Millennial’ Health: 6 of the 10 most prevalent health conditions for Millennials (those between 23 and 38 years of age today) relate to their mental health: hypertension, depression et al per the Blue Cross Blue Shield Health Index. The race to be the trusted source for health and wellbeing is being fought by insurers, retail pharmacy chains, independent investor-backed start-ups aimed at employers and health systems venturing into retail health. The jury’s out on who will win. https://www.bcbs.com/the-health-of-america/reports/the-health-of-millennials?
Related: Sedentary behavior increasing: The JAMA study analyzed behaviors from 2001-2016 finding “the estimated prevalence of sitting watching television or videos for at least 2 hours per day generally remained high and stable. The estimated prevalence of computer use during leisure-time increased among all age groups, and the estimated total sitting time increased among adolescents and adults.” https://jamanetwork.com/journals/jama/fullarticle/2731178?guestAccessKey=f0cbfd72-78c7-4e1a-8d44-384702608406&utm_source=silverchair&utm_medium=email&utm_campaign=article_alert-jamanetwork&utm_content=weekly_highlights&utm_term=042719 The role exercise plays in healthiness is under-appreciated. Is PCI an answer or are other public policies more effective?
The Week Ahead
Medicare for All: This Tuesday, the Democratic-led House Committee on Rules will hear testimony on HR 1394 “Medicare for All for 2019”. https://rules.house.gov The four majority witnesses will challenge the fairness of the current system and its profitability; the two minority witnesses will challenge the notion that a publicly-run system is more efficient and effective than the status quo. Differences between various M4A models will get scant attention and media coverage will be minimal in deference to AG William Barr’s scheduled testimony to Senate and House committees
Comprehensive Primary Care Initiative https://innovation.cms.gov/initiatives/comprehensive-primary-care-initiative/
“The State of Primary Care in the United States A Chartbook of Facts and Statistics” Robert Graham Center January 2018 https://www.graham-center.org/content/dam/rgc/documents/publications-reports/reports/PrimaryCareChartbook.pdf
“Physicians and Hospitals in the U.S. System 2016” Agency for Healthcare Research and Qualityhttps://www.ahrq.gov/data/infographics/physicians-hospitals.html
“Updated Data on Physician Practice Arrangements: Physician Ownership Drops Below 50 Percent” American Medical Association 2017 https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/health-policy/PRP-2016-physician-benchmark-survey.pdf