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A Tilt Toward Primary Care?

by Katherine Hempstead, PhD, MA

Recently released data on payments received by a large cohort of physicians provide some insight into how carrier strategies with respect to network composition and plan design may be evolving. The data came from ACAView, a collaborative project between athenahealth and the Robert Wood Johnson Foundation (RWJF) that provides researchers, policymakers and the public with regular updates on how the Affordable Care Act (ACA) is affecting physician provider practices. The data show trends in insurance payments and patient obligations – also known as “allowed amounts”– for primary care and a number of specialties for the first nine months of 2013 versus 2014 for visits by commercially insured non-elderly adults. A few things in particular stand out:   

First of all, despite the increase in coverage and therefore overall health care utilization, primary payments from insurance companies to these providers rose quite modestly – only 2 percent overall. While primary care providers received a bump of 3.5 percent on average, for surgeons and orthopedists, primary payments from carriers actually declined. The relatively better trend for primary care physicians may reflect more investment in care management and prevention, which is a key component of most delivery reform strategies. When adjusted for relative value units (RVU), the differences are still present, although lessened a bit, perhaps reflecting the fact that primary care providers may be doing more services to earn these extra payments. In particular, these differences may also reflect the fact that there are now a number of preventive services for which there is no patient cost-sharing. For established patients, total allowed amounts for surgeons and orthopedists are still approximately twice as high as for primary care providers. Another point worth remembering is that since most surgeons and orthopedists also do procedures, income for these specialists is by no means limited to office visits.

These payment differences may reflect carrier strategies to shift resources to primary care in the hope of encouraging more prevention and reducing use of more expensive specialists. The patient obligation data show another way that plan design may discourage use of specialty care, by requiring significantly more cost sharing. For example, the average patient obligation for orthopedics is approximately $60, roughly twice the average payment for primary care. More broadly, there seemed to be a trend in plan design toward subjecting more health services to the deductible. Across all provider specialties, there was a marked trend away from co-payment and co-insurance and toward the deductible as the source of the patient obligation. Overall, average payments from the deductible rose about 9 percent among established patients.

One thing common to all specialty types included in this study is the importance of patient payments. Even for primary care providers, patient obligations were more than 20 percent of total allowed amounts. For specialists the share was slightly higher, although the differences were not great. The ability to collect the patient share is increasingly important to providers, hence a growing focus on provider collections policies and the growing potential for bad debt from insured patients, a topic once relegated almost exclusively to hospitals. 

This snapshot of timely data reveals a few important utilization management strategies at work. The tilt toward more prevention and care management by primary care providers may be seen in the higher payments and the elimination of patient cost-sharing for some services. At the same time, the high levels of cost-sharing levied for specialty care visits and the growing use of the deductible reflect the use of plan design to discourage utilization of all types, but particularly of specialty care. Both strategies are designed to reduce spending–the former indirectly through the pathway of prevention and improved health, while the latter straightforwardly by raising prices to consumers, which may affect both utilization and provider prices. By now, we all have learned that high deductible plans lead consumers to forgo needed as well as unneeded care, but we know little about how this may affect health outcomes. We know even less about how use of preventive services and associated health outcomes may be changing. So while the implementation of these strategies is easy to see, an increasingly important task is to learn more about how they may be affecting health.

Katherine Hempstead, PhD, MA, is the director and senior program officer, leads RWJF's work on health insurance coverage.

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Submitted by gary butka MD - Saturday, July 18, 2015

Primary care needs a huge shot in the arm soon. 3% increases are not enough. Many hidden costs are not being factored into the expenses.

Submitted by Christine Harter - Saturday, July 11, 2015

PCP's are definitely having to do more for these minute increases, and there is an accompanying article that I saw that says that internists are still the ones who burn out the most likely. The paperwork burden on PCP is still the greatest. Yes we are sometimes paid for the paperwork, but it still steals your soul and makes you want to quit medicine, so if you think that 3.5% increase is going to make it worth all that paperwork that numbs your mind, forget it!

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