Primary Care Strategies for 3 Market Types

Primary care physicians are beginning to play a critical role in healthcare markets' transition to value-based reimbursement payment models and accountable care organizations, according to a recent white paper by Peter Shorett, a senior consultant at The Chartis Group.

More than 40 percent of all primary care physicians are employed by large delivery systems, with many markets at 70 to 80 percent primary care employment, as opposed to 2004, when only approximately 20 percent of physicians were employed by hospitals and health systems. However, primary care physicians' strategic roles differ depending on the market, and providers need to look at the strategic value of primary care physicians differently in different markets.

Fee-for-service markets

Developing a large primary care network is important in order to secure referral channels and position providers for future negotiations with payors. Organizations should support a practice model with high visit productivity and patient throughput in order to generate the broadest number of referrals. Physician compensation should be geared toward volume generation and cost efficiency.

The author stresses that the number of markets where this approach will remain viable will dwindle under healthcare reform.

Advanced markets

Providers in advanced, global budget markets should surrounded their primary care base with four elements:

1.    Infrastructure for care management and care coordination.
2.    New primary care delivery models that leverage greater direct support staff.
3.    Enhanced IT connectivity between the physician office, hospitals and ambulatory sites of care.
4.    New finance, budgeting and risk management capabilities.

These elements require a major investment, so hospitals must be clear on the benefits the investments will bring.

Mixed markets

For markets with a mixture of fee-for-service and alternative payment models, providers should pursue a strategy that will be effective currently and be well-positioned for the growth of population-based reimbursement. Providers need to take a thorough assessment of market dynamics, investment opportunities and alternatives, and also look at the broader system goals in order to identify the right primary care strategy for an individual health system, according to Mr. Shorett.

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