Innovation in payment for chronic disease management will have more impact on US health than all other healthcare innovations

When you hear the phrase “healthcare innovation,” what naturally comes to mind is technology. Genomics, analytics, telemedicine and remote monitoring, mobile apps and a dozen other technological advances are improving care in all kinds of ways. But there is another area of innovation that could have an even bigger impact on the health of U.S. residents: new ways of paying for chronic care management.

Historically, U.S. physicians – and especially primary care physicians – have been paid far more for what they do with their hands than what they do with their minds. For a variety of reasons, Medicare and private health plans paid for office visits and procedures, but paid little for medical management, essentially prioritizing procedures and doing things to the patient over care to prevent the illness in the first place. The result of this short-sighted payment environment has been skyrocketing costs, inefficient use of resources and poor health outcomes. As a nation, more than 75% of our healthcare spending is on people with chronic conditions, and seven out of 10 deaths each year are from chronic diseases.

Among the 13 highest income countries, we spend 2.5 times the median per capita expenditure on healthcare, but we have the lowest life expectancy, according to 2013 data from the Organization for Economic Cooperation and Development. Japan, with the highest life expectancy of 83 years, spent $3,713 per capita in 2013, while we spent $9,086 and had a life expectancy of 78.8 years.

As a nation, we’ve been neglectful owners of our own bodies. If we treated our cars the way we treat ourselves — paying nothing for maintenance and high prices for repairs — mechanics would cease changing oil and earn most of their living replacing engines. Clearly, innovation is needed.

Cost growth is slowing, but we have a primary care crisis
Fortunately, things are starting to change. The growth in U.S. health expenditures has slowed — it was only 1.5 percent for the years 2009 through 2013, about half the rate from 2005 to 2009. In fact, we had the slowest growth rate for expenditures among those 13 countries. And life expectancy is going up also, though it still lags that of many other countries. Japan’s life expectancy for 2014 was 86.8 years, ours was 81.2.

While the U.S. has a lot of physicians, the supply is unevenly distributed geographically, with a surplus of specialists and a shortage of primary care physicians. For every 100 specialists in practice, there are only 70 primary care physicians, though 54.6 percent of all office visits are with primary care physicians. In a 2013-2014 physician salary survey, family medicine specialists had a median salary of $122,850. Internists earned more, averaging $212,790. But compare that to cardiovascular surgeons ($408,000) or orthopedic surgeons ($488,500). Clearly, the U.S. health system values fixing over prevention, and specialists can earn far more than primary care physicians. You either have to be debt free from your medical school training and/or be pretty dedicated to the health of your patients to choose primary care when you could become a dermatologist ($367,000).

But here’s the thing: primary care physicians who practice high-value care have the power to knock U.S. health spending back into line with that of other developed countries and improve the overall health of our patients. While the specialists have skills we need, they don’t have the same influence on overall health spending compared to primary care physicians. They can help reduce costs, but it is the primary care physician that is positioned to provide the kind of care that can change the course of chronic diseases in this country. What we clearly need are more primary care physicians and a reimbursement system that prioritizes prevention over repair.

Primary care physicians need resources
It’s no secret that many primary care physicians feel they are under siege, at war with CMS and with private health plans to defend their time, their autonomy and their income. They’ve been forced to adopt EHRs that don’t serve their interests well, and they have to fight to get paid what they are owed. Nearly 40 percent of primary care physicians see between 21 and 30 patients each day. That’s about 16 minutes per patient in an 8-hour work day — and that is if you don’t go to the bathroom or eat lunch. And not all that time is spent focused on the patient – there is documentation, prescription writing, returning phone calls and other tasks. You can’t do competent medical management if each patient gets only about 16 minutes of your time.  In a Commonwealth Fund study of primary care physicians, only 16% of U.S. physicians surveyed said the system works well.

It takes a team of medical professionals – physicians, nurse practitioners, physician assistants, health coaches/educators, nursing assistants – to give the individualized, patient-centered care that can really make a difference in heading off chronic disease and preventing complications. And it takes systems, resources and technology, like telehealth and remote monitoring and analytics, none of which comes cheaply. Though the return on investment in effective technology can be excellent, you still have to buy the technology, integrate it with your workflows and train your staff how to use it. If payers don’t offer adequate reimbursement for the cost outlays, physicians won’t – or can’t afford to – use it.

We need to loosen the purse strings for primary care physicians and provide the staff, resources and technology to maximize their ability to manage chronic disease. That may mean more outlays at the front end, but it will also mean fewer days in the hospital and fewer patients requiring dialysis. It will also mean fewer patients with serious cardiac disease, joint issues and dementia, all of which have been linked to obesity, diabetes and high blood pressure.

I’m not the only one who thinks this. Health plans are beginning to move strongly in this direction, paying more and providing resources to help physicians better manage and prevent chronic disease. Blue Cross Rhode Island launched a new analytics platform this March to help physicians get a 360 degree view of their patients, to better understand where care gaps exist and to better manage their health. That’s a resource that physicians would not be able to provide on their own.

And back in 2012, Anthem (previously named WellPoint) began raising the pay of primary care physicians and offering new resources to help them provide better care management. In 2016, they published an update to the program that they call Enhanced Personal Healthcare. To quote from their publication on the program, it offers:

  • “A redesign of current payment models to align financial incentives and provide compensation for important clinical interventions that occur outside of traditional patient encounters;
  • “Support for risk-stratified care management;
  • “The sharing of meaningful information regarding patients that goes beyond the information captured in the physicians’ medical record; and
  • “Providing physicians with the knowledge, information and tools they need to leverage the benefits of new payment models, along with support services and information exchange to transform the way they deliver care.”

If they follow through, and I have no reason to doubt they will, that’s a big step in the right direction. When it comes to chronic care, we are all in this together. Partnerships between physicians and health plans will be key to reaching the triple aim of better outcomes and better patient experience at lower cost.

More articles on innovation:

20 insurance startups join innovation hub
Mount sinai hosts 5th annual innovation conference, adds digital health challenge
MassChallenge launches digital health innovation lab Pulse

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