Category Archives: P4P

Gatekeepers vs. Quarterbacks: Primary Care Gets Back in the Game

Quarterback (kwôr‘tər-băk‘) n.

1. The backfield player whose position is behind the line of scrimmage and who usually calls the signals for the plays.
2. To lead or direct the operations of an enterprise.

I have been reading with interest all the recent articles (here, here, here, and here) regarding the decline of primary care as a specialty and the rise of practice reform models, such as conceirge, retail clinics, and related variations. The common theme is that through the debauchery of managed care and RUC reimbursement schemes supported by the AMA (24 of 29 representatives represent specialties), we have created a completely skewed, unaccountable, and unsustainable financial model incenting the delivery system to provide a specific type of care. In essence, we are getting exactly what we paid for – dyscoordinated care, excessive procedures, and too many specialists (an excellent treatise on this is provided by Shannon Brownlee’s excellent book, Overtreated).

In reading non-physician commentary about this situation, I am intrigued with some of the insights but have to smile about most of the conclusions. Let me be candid with my experience regarding career choice options while I was in medical school. I attended the University of Utah, well known for its genetics and informatics programs, with a moderate slant toward rural care given the remote expanses which fed into the tertiary care centers of the University and Intermountain Health Care. There was a strong bias to recruit primary care physicians beginning with the free brown bag lunches that started during my first year. Incentive programs, like loan forgiveness or related financial incentives were tossed out as carrots, to attract potential primary care physicians. The problem for me, and most students, was that both the message and the messengers were unconvincing.

We all busted our tails to get into medical school, and despite whatever your higher motivation of choice you relayed during the interview process (I want to help people, I want to do well by doing good, etc), the rigors and demands of 7-12 years of post college training completely beat the altruism out of you. It came down to what specialty can provide the most value to me (outcome/price). This formula is important for non-physicians to understand. Some physicians in training are motivated purely by their love for some aspect of medicine – pediatrics, public health, AIDS, surgery, etc – but most settle on the practice type which helps them attain the outcomes they desire (quality of life, financial security, and career stability) at a price they are willing to pay (years of training, lifestyle, financial considerations, etc). When you sit down with a highly intelligent, highly motivated (remember these folks are gluttons for delayed gratification) person and present Hamburger A or Hamburger B, their decision making process becomes clear:

This data is taken from my personal thumbnail sketch and do not represent actual practice information.

So, please, tell me why as an aspiring medical student, feeling a little entitled by the prospect of the extra two initials looming, would ever go into Primary Care? You can drop the altruism right now because altruism does not put food on the table, children through school, or the finer things in life within reach. This is exacerbated when you have a plateful of specialty choices in front of you that offer everything you are dreaming about and in some cases much more. Remember, I am not disparaging my primary care brethren/sisters in anyway, they are fighting the “good fight” in the trenches and the evidence is clear that primary care is an integral part of improving health care and population health. I am merely acknowledging that the current financial system we have in place creates overwhelming incentives to go into a specialty, or even if you choose primary care (ie, internal medicine) you still choose to specialize (cardiology, pulmonology, infectious disease, etc).

As a result, I have become very interested in redefining health care financing to align incentives in order to obtain better health care outcomes. I believe that primary care needs to be paid in a way that recognizes the value that it creates for improving population health (just as I believe that teachers should be paid for the value they create for society). Notice that I did not say physicians – as I am of the persuasion that primary care physicians are being undone by their own lack of demonstrating value and moving appropriately up the health care delivery value chain. Primary care physicians ARE GOING TO GET REPLACED (appropriately so!) for all the simple stuff that is covered by retail clinics. Anything that can be reduced to a guideline, a template, or treatment algorithm should absolutely be given to someone else in the health care delivery chain. PCP’s should not fight this, they should embrace this, in order to move toward delivery of higher value oversight, complexity, and clinical conundrums where they can uniquely put those years of training and experience to work.

Paying primary care providers more has to be more than just a cost shifting scheme where more payment is given for the same method of delivery. I personally believe payors are willing to pay more for something new, better, and less costly. In order to facilitate this transition, primary care physicians need to move from the failed “Gate Keeper” concept (impotent guardians of health care expenditure) where they were perversely incented to do more and do less simultaneously to the much more enlightened “Quarterback” of a primary care delivery TEAM. Having been a quarterback myself both on the field and in the ER, I know what it is like to deliver great outcomes in a highly effective team environment. Primary Care Physicians should provide the clinical leadership, practice population oversight, care coordination, and overall direction for care teams (nurse practitioner, registered nurses, medical assistants, dietician, etc) that gets paid based on delivering outstanding results. This type of “Quarterback” model has some promise.

Its still pregame, in fact, the players are just wrapping up the final instructions prior to taking the field for final run throughs and warm-ups. However, the money boys are starting to place their bets. Everyone is looking for quarterbacks who can take lead the team.



Filed under Consumerism, Health 2.0, P4P, Transparency, Value

Microcapitation: A Closer Look and New Perspective on Capitation

Microcapitation (mīkrə kăp’ĭ-tāshən) n

1. A healthcare delivery mechanisms wherein a service provider contracts with an administrator to provide health care services on a per capita basis.
2. A financing mechanism wherein a service providers assumes financial risk, is compensated at a fixed per capita rate, usually for predetermined services as appropriate for subscribers to the service.

I have taken my sons on occasion to the Science Discovery Center located in Santa Ana, California. It is a wonderful play land of hands on scientific exhibits designed to entertain while they inform young minds about the physical world around us. My boys love going to explore and roughly handle the well worn exhibits. One of my favorite exhibits is the one that starts way, way . . .way out – “in a galaxy far, far away” and through successive frames brings you back into our galaxy, into our solar system, into our atmosphere, into our continent, into our country, into a state, into a city, into a neighborhood, into a backyard, into the pool area, into a person, into their hand, into their skin, into their tissue, into their cell, into their nucleus, into their genes, into . . .” You get the idea.

I guess the point is one of perspective, and your perspective can change dramatically depending on where you sit relative to the thing being “perspected(Hoodwinked is one of my favorite studies in perspective!). I have always had a natural aversion to capitation, as it has always been associated with the worst of managed care, hurried office visits, and soul-less physicians who in my mind had sold out. I am not sure where I picked up on this attitude, it was probably along my apprenticeship trail wherein I spoke to, interacted with, and was mentored by jaded physician after jaded physician coping with the difficult adaption to “modern” medicine.

I have always thought it incredulous that physicians would accept a set pre-payment for an unknown commitment to provide an unknown amount of services. It seemed to create an unnatural and difficult set of incentives where the less you see your patients and the less you do for them the more money you make. Funny that the Stark laws were created to eliminate the concern about self-referrals leading to excessive provision of care, but that these types of physician enriching paradigms by providing less care are perfectly acceptable. I also never understood how physicians could make these commitments with absolutely no information like:

  • How much health care services do your current patients actually consume each year?
  • How much do these services “cost” you as the physician to provide?
  • What patients can you provide preventative (healthcare) services in order to avoid treatment (disease care) services?
  • What other activities can you engage in that would appropriately lower the consumption of services or shift services to most appropriate care activities?

This information has never been available to physicians in the past, and therefore all the capitation schemes that I have seen have appeared to me to be just an absolute crapshoot. Sign on the dotted line and start crossing the fingers. Well, this just does not cut it, man. No wondered the capitated doc’s would be busting their chops at the end of each year as they got financially decapitated. There is nothing worse than a beaten doctor who succumbs to the incessant financial pummeling. You can see it in their eyes and hear the weariness in their voice when they give in and the dream to provide world-class care, to help their patients attain their healthcare goals, and provide comfortably for their families is broken down in 12-15 minute sound bite sessions with their “subscribers”. Hence the anger and bitterness that were part of my training experience and initial exposure to capitation. It was not a pretty site or a positive training experience.

It doesn’t have to be this way.

Capitation definitely has some advantages as I have since learned. It can create and align some incentives that help both the patients, providers and of course the payors. But lets look at capitation in a new way. How about we set up the capitation around discrete medical conditions, or subsets of clinical activities, that would be amenable to deliver in “care packages”. As mentioned in my previous post, these care packages have a lot of intelligence built into them in terms of their specifications, their ability to self-organize care, and their ability to create a true health care marketplace wherein price, quality, and outcomes can be compared side by side, provider by provider.

The discrete services provided by vertically or virtually integrated teams would enable a new level and degree of expertise. High volume providers would develop additional experience, which would enable them to introduce innovations and efficiencies in a classic virtuous cycle. With the additional delivery and outcomes experience, providers would be much more willing to put out a set fee for a set grouping of clinical services, because for the first time, they could have some confidence in their ability to deliver for that price. This is capitation, but it is “microcapitation” at the medical condition level (which should be the lowest common unit of care delivery that we should measure).

To emphasize the point, Microcapitation (which I have never seen used and a google search on 12/21 produced ZERO results) makes a lot more sense to me because it is for a definable, controllable, and limited set of clinical activities in which providers can, with confidence, provide services for a set fee. Microcapitation, as delivered in discrete “Care Packages”, will be a critical new product feature as we transition to a true marketplace. Microcapitation around specific medical conditions also provides a manageable unit of health care delivery in which we can develop the appropriate care linkages across all the providers who form the team to deliver the full episode of care. It is also an appropriately sized clinical bite in which the appropriate healthcare infrastructure that allows for appropriate outcomes measurement, monitoring, and healthcare outcomes to be reported, compared, and ultimately consumed in a healthcare marketplace (more on this later).

So, to my physician brothers (and sisters!) slogging it out in the capitated trenches, you need to go micro! Take a fresh look at your exposure, and control it by moving to discrete microcapitated “care package” bundles, that you can control, measure, and market.

The fresh perspective should help things look a lot more rosie . . .


Filed under Health Plan 2.0, P4P, Value

Pay for Confusion: Current State of P4P

Confusion (kən-fyūzhən) n.
  1. Impaired orientation with respect to time, place, or person;
  2. The act of confusing or the state of being confused; an instance of being confused
  3. A disturbed mental state.

There have been several recent articles over the past week regarding Pay for Performance (P4P). I have previously been critical of the current incantation of P4P as it is more reflective of “Pay for Process”. While many programs fall short of tracking measures that matter, I am pleased to see that they are tracking, and more importantly reporting, something. Forward progress is forward progress!

Modern Healthcare recently had an article which highlighted some recent studies regarding the plethora of new programs being introduced nationwide. Since 2003, there has been a steady annual increase in P4P programs growing from 39 to 84 to 107 to approximately 148 in 2007. A noted challenge with this exponential growth is the to determine exactly what all these programs are tracking. Turns out that many use standard measures from AQA, NCQA, NQF, the Joint Commission, and groups like Leapfrog. However, there is quite a bit of homebrew in there as well, which I support in the short term, but that will need to be codified at some point into measures that matter (That is a catchy phrase that someone should pick up on).

A couple of relevant quotes:

  • Price Waterhouse Cooper Report: “Pay-for-performance programs can be an important tool to link payment to quality, but the wide variation in program structures, performance metrics and rewards structures mutes their potential impact.”
  • Susan DelBanco, CEO LeapFrog Group: “The P4P and Consumer Incentive Survey demonstrates clear evolution in P4P programs. They are assessing hospital and physician quality more broadly and beginning to emphasize measures of efficiency. The programs also directly lead to greater availability of publicly reported information that is useful to employers and consumers.”
  • Francois de Brantes, National Coordinator for the Bridges to Excellence physician-reward program: ”Most of the employers and the plans we work with are increasingly cognizant of the fact that this [variability of P4P measures] just creates a lot of noise, and that we need to strengthen the signal by having very clear standardized measures used by multiple plans and employers in a single community.”

So I am stoked to see the progress, but concerned about the confusion created with all the current programs. The auditory dissonance in the experimentation phase is more than appropriate, and with appropriate encouragement and steerage the current cacophony can become a high performance chorus singing a perfectly-pitched, unified aria of quality. I think what can get us there is the thought leader groups to continue to press forward with scientific methodology that can be widely applied to get us to some reasonable measures that really matter.

I hope to see ongoing, and continued physician involvement, in the shaping, development, and promotion of these programs as part of a wider movement toward a more transparent health care delivery system. Physicians, like no other players in the system, have a vested interest in differentiating themselves based on the objective outcomes of their patients. I would like to see them turn this P4P movement into a weapon of promotion and differentiation for them versus the tool of the adversary against them. And to be fair, health plans and other types of health providers need to be put to held to the same transparency fire as well.

So while the current state remains one of confusion, I believe the “din and roar” is from the buzz of a burgeoning healthcare market getting in tune with the new healthcare harmonics

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Filed under Innovation, P4P, Quality, Transparency