Tuesday, March 13, 2007

On Disparities Between Reimbursement of Primary Care and Proceduralist Physicians

A recent post inspired some discussion about physicians' reimbursement in the US. Last month, an article in the Annals of Internal Medicine offered a clear explanation about how the disparity in reimbursement between primary care (and other "cognitive") physicians and procedural specialists came to be, and why it is important. [Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306.]

Its main points were:
  • The widening income gap between primary care and other physicians correlates with declining interest in primary care.
  • Medicare's Resource-Based Relative Value Scale (RBRVS) system was advertised as a way to make reimbursement more equitable, and particularly fairer for primary-care, but it has had the opposite effect, for three main reasons
  • Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
  • The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."
  • Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
  • Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The authors concluded that "primary care practice is not viable without a substantial increase in resources available to primary care physicians." Yet primary care is an extremely important, albeit neglected part of the health care system. Most patients value "having a primary care physician who knew their medical problems." Furthermore, "patients with a regular generalist physician have lower overall costs than those without a generalist physician."

This article presents the clearest summary I have seen to date of what has gone wrong with the reimbursement of primary care and cognitive physicians in the US. (Although we have discussed Medicare's generally wooden-headed reimbursement system before, here. See also the Health Affairs article cited in that post for a more general discussion of why the system is wooden-headed.)

What is disturbing, although no reflection on the article's authors, is how long it has taken for someone to write about this problem. The RBRVS system has been going wrong since 1992. Managed care, which was supposed to come up with creative ways to control costs and improve quality, seems to have seen fit to simply ape Medicare's wooden-headed reimbursement for at least a decade. Meanwhile, primary care is slowly being throttled.

Of course, one reason it has taken so long to talk about it is doing so may threaten vested financial interests and settled ideological convictions. The justification for the first part of the assertion is obvious. Furthermore, the article is an indictment of government-run single payer health insurance, which may offend many on the left. After all, Medicare is such a single-payer system. The article also is an indictment of using the "competitive market-place" to control health care costs, which may offend many on the right. After all, managed care is supposed to be such a market-based solution.

Thus, let's see how many choose to continue to ignore the issues raided by Bodenheimer et al.

Instead, we should consider...


1. If you are a primary care or cognitive physician, realize why your financial position is becoming untenable and stop feeling guilty about protesting an unfair system.

2. If you are a procedural specialist, realize that you are in the same boat as the primary care and cognitive physicians. If our part of the boat sinks, yours will not long stay afloat.

3. If you are a health care researcher, think about addressing this elephant in the living room which many of you have so long ignored.

4. All others, tell your political representatives that fair physician reimbursement and a viable primary care system are both worth having.


. said...

This is an enlightened post. I didn't think anyone cared about these issues in this narcissistic blog environments.

The RBRVS is a direct mapping from the CPT codes used for billing. The only data they have is encounter, so this is the best they can do. I have seen Medicare data at the state level, and I can tell you its VERY HARD TO USE AND VERY RAW.

The post is correct, the process used t o update the RBRVS is biased. I do the actual cost studies that are admired based on this type of data.

I have come to a parsimonious answer, and I hope it doesn't offend anyone: The Federal government does NOT want to pay for ANY health care, and the not for profit health care safety net gets the short stick all the time. People who work their butts off trying to help people with brain tumors FOR FREE (charity hospital, no one can be turned away), OBGYN MDs who do surgery are all sued so damn much by MEDICARE and by patients, when believe it or not, everyone is doing the best they can.

Thank you for accepting this rant.


early 60s professional living in Jersey exurbia said...

I have to add that this sort of upside down payment mess is just another reason I am glad I left clinical medicine.

A physician in pharma marketing, I know we have our own evils...

Anonymous said...

A great posting, Roy!

Anonymous said...

This is an outstanding post.

Some are saying it's going to get ugly between cognitive and proceduralists docs as the money keeps drying up. I hope your "we're all in this together" attitude prevails, but I bet ugly is what happens.

So now let's figure out how we get more cognitive physicians on the RUC.


Rebecca Stob said...

As someone who works directly with provider reimbursement from a commercial perspective this strikes me as a huge structural problem that we are most likely just seeing the start of the problems with devaluing primary care. My personal opinion is that the backlash against managed care tend to throw the baby out with the bathwater in that the concept of having everyone assigned to a PCP who was actually theoretically responsible for coordinating their care seems incredibly logical to me. I think that their was a dual failure of the HMO organizations to put into place the sophisticated information systems that would allow fair comparison and compensation for different types of patients and also evaluating the PCPs on fair measurable cost, quality and efficiency metrics. In a PPO situation the lack of care coordination and ability to assign responsibility to specific physicians for quality of care standards is a significant obstacle to rewarding high performers and quality primary care.

Unknown said...

Thanks for this post (and the heads up about the article) --it's
all too true.

The only thing I would add is that this is not necessarily evidence that a single-payer (or
Medicare-for-all) system wouldn't work--if Medicare stood up to the
special interests that tend to
skew payment priorities.

And this is exactly what Medicare's independent advisory panel on reimbursements (MedPac) suggested in its March 1 report. (See www.Medpac.gov and click on
report to the Congress, March 1, 2007.)

In chapter 3 of the report, "Using Medicare's physician and other payment systems to improve value," the panel noted that when setting physician fees, the Centers for Medicare and Medicaid (CMS0) "rely too heavily on physican specialty societies .. . that have a financial stake in the process and therefore have little incentive to identify overvalued services. . .

"To maintain the integrity of the physician fee schedule" the panel recommended that CMS "establish a group of experts . . .who do not benefit from changes to Medicare's payment rates . . ." to help identify over-valued specialty services.

Some of the money saved could then be used to raise reimubursments for primary care physicians--which is what MedPac
recommends in a section of the report titled "Promoting the Use of Primary Care."

Here the panel
notes that "Medicare's payment policies . . . need to be
realigned to encourage the use of
primary care. , ,

At present, the panel pointed out, physician reimbursement is based on an an estimate of the "time, mental effort, technical effort and skill" needed to perform the service as well as "psychological stress, and risk" to the physician.

On that basis, a specialist performing an invasive procedure is always going to be paid more than a primary care physician who is practicing what some call "thinking medicine"--listening to and talking to the patient, taking a case history,
prescribing medication, physical therapy, weight loss, etc.

And here Medicare's advisory panel suggests a change, noting that "Some Commissioners [on the panel] have argued that the relative value units of the physician fee schedule should be
at least partly based on a service's value to Medicare. Such an approach would focus on primary care services as well as other
valuable services. For example, if analysis of clinical effectiveness for a given condition
were to show that one service were superior to an alternative service for a given condition, then Medicare's prcess of setting relative values might reflect that."

In other words if a primary care physician is able to manage a heart patient's condition with
medication changes in diet and exercise--avoiding the need for surgery-- he should be paid more since he is giving Medicare (and the patient) greater value for the dollar . . .

This seems to me a very interesting suggestion as to how we might raise reimbursements for
primary care physicians, family docs, etc. by paying them more based on the clnical effectiveness of the services they are providing when compared to traditionally more expensive invasive services.

And that's the direction that Medicare is heading. The report is all about how "fee-for-service"
reimbursement is not working--and how, ultimately, Medicare needs to
pay for outcomes and efficiency.

Robin said...

[...]Roy M. Poses, MD, writes for Health Care Renewal, and in his article "On Disparities Between Reimbursement of Primary Care and Proceduralist Physicians" he neatly outlines the problems and what PCPs, specialists, researchers and patients can do to improve health care...

...While Number 3 is somewhat pertinent and I'm trying to do that here, Number 4 definitely applies to me. And to you.

I can do that. Can you? Actions do speak louder than words, even when the word is an "ouch".[...]