CMS Payment Design

The Four Horsemen of the Primary Care Apocalypse

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Payment is easily established as the dominant reason for primary care deficits. Primary care has been to low with too much required for decades. There are indications of worse, not better in the past decade and at the worst possible time in the history of the United States. Lost confidence where primary care practices face the most challenges and the least payments will result in accelerating access deficits.

Unbalanced workforce with too many MD DO NP and PA specialists and subspecialists and too few generalists is entirely about payments too low for the basic services. Since these basic services dominate care where needed where 40 – 50% of Americans most need care, deficits in services and workforce and team members and health care dollars are created by payment design

A nation 23rd worst of 26 developed nations clearly is not investing in generalists, primary care, basic access, care where needed, or the team members to facilitate care delivery and higher primary care functions. Decades of poor primary care payment have shaped deficits of primary care workforce.

The pattern of the deficit reveals payment as the source. Deficits are greatest where payments are lowest – by state, by county, by population, by practice (smaller size 1 – 9 physicians), by lowest physician concentration counties. The special supplementation goes to hospital outpatient departments, largest practices, largest systems that have been able to shape higher payment and annual escalation clauses their way.

Lowest payments go to small, rural, underserved, less organized practices and those most focused upon care and caring, rather than fine details of maximizing revenue. Narrow networks represent another disaster for small practices who want to contract with payers even though the contracts are lesser in payment and large on meaningless tasks.

Few have not seen the map of red counties and blue counties in the last election. With the exception of a few dozen rural counties with substantial minority populations, the blue counties have the highest paid services, specialties, and concentrations. The red counties have the lowest paid services, depend upon lowest paid generalists and general specialties. They have only about 26% of workforce for counties with half of the population of the US. 

A close examination of the counties lowest in physician concentrations indicates the four major players producing the deficits by design – Medicaid, High Deductible Insurance, Veterans Administration, Medicare. The counties lowest in physician concentrations are largely the result of payment design.

Four Horsemen of the Apocalypse Descriptions via Wiki

Medicaid – Famine

Dollars are the food and fuel for health care delivery. Fewer dollars equals fewer to provide care, fewer team members, and greater costs in areas such as turnover (now over $300,000 per lost primary care physician). 

Medicaid is the dominant deficit determinant. Consequently Medicaid offers the most opportunity for impacting needed payment change. Medicaid payments are indeed lacking, creating workforce famine or workforce deserts. 

Medicaid populations are most concentrated where payments are lowest, where workforce is lowest, and where basic access is most impaired. The states paying lowest and the regions paid lowest dictate the shortages. Special Medicaid population criteria even allow Community Health Center funding – except that the Medicaid populations that meet the criteria are not uncommonly within a few zip codes of highest physician concentrations. Yes, the uses and abuses of CHC designations can result in even less remaining for the 40% of Americans in lowest physician concentration counties. Academic and largest systems have learned the value of such dollars used to help decrease costly and low paying Medicaid hospitalizations – especially when a low paying patient might bump a higher paying patient.

Food to Relieve Famine

Increased payments for primary care, mental health, cognitive, basic, least technical, least procedural, and oldest services – this is the best way to improve access, they are the best way to balance workforce, and inject jobs and cash into areas in most need of social determinants – the true route to improving health outcomes. 

Medicaid payment is a major driver of disparities. The only thing less is even less payment through Medicaid to counties with the most disparities already. If Congress does not continue CHIP funding expiring in 10 months, the 47% of children in these 2621 counties with 40% of the population will have even more difficulty along with all in their counties.

Payment below cost of delivering care helps to shrink care for Medicaid patients – and every other patient in the counties where Medicaid patients are concentrated. 

Medicaid payments are so low that many providers fail to accept Medicaid patients. Some places with highest concentrations of physicians have managed to facilitate the flow of  federal dollars to nearby sites in zip codes adjacent to highest physician concentrations – using the fact that few in the area accept Medicaid payment. The solution is better payments – not more dollars abused by those already receiving the most. Federal designations can be part of the problem instead of part of the solution – because of payment design.

Medicaid expansions were not specific to the local problem facing these counties. The counties with the most access barriers have the least workforce – but do not have higher deficits of uninsured. They have the Four Horsemen instead.  

High Deductible Insurance Plans – Pestilence

High deductible plans are catastrophic plans. They work with high cost services as in emergency care or surgery or critical care. They support primary care less. They represent Pestilence or a torture of local care where needed. The plans also torture those with asthma, high cost medications, and those forced to sign up for insurance.

In the counties lowest in workforce, generalists and general specialists dominate. There are few hospitals and those hospitals cannot handle trauma or major catastrophic illnesses. The catastrophic care plans have always helped to impair payments and workforce to rural counties and other counties where lower income Americans are found. Expansions of High Deductible Insurance Plans support local care where needed least.

High requirement insurance plans should also be considered pestilence. Too much time and effort must be spent by team members attempting to meet patient needs by getting over insurance barriers regarding prescriptions, admissions, referrals, and other cost items limited by payers.

Veterans – War

Veterans also gather around lower cost of living areas and have to bypass local primary care. Over 45% of Veterans are found in the 2621 lowest physician concentration counties. Many argue that veterans need special care. Those that prioritize special care for few in few places are compromising local and accessible care for 45% of Veterans by workforce that already has to address the needs of the most complex populations in the nation. The lack of support from Veteran plans helps to compromise care for all in the local settings where Veterans are concentrated.

Veterans plans that allowed veterans to access local primary care with decent payment for these services would be a great boost to local care. The large segments of the male population from WWII and Korea (80% and 60% respectively) that remain alive could benefit from local care as their mobility and transportability decline.

Cuts to Veteran Benefits also impact local economics where 40% of Americans are most behind just as cuts to Social Security, Food Stamps, and Disability hurt. Decreased dollars to these counties shaped decreases in social and other determinants of health – adversely impacting health outcomes. 

Veterans that live in such settings often do so because of the lower cost of living and lower cost of housing – factors that concentrate the Four Horsemen.

Medicare – Death

Over 30% of Medicare payments are associated with death or near death as this is the proportion of Medicare payments that are paid over the final year of life. This has continued to rise past 30%. Death is a growing business too.

Medicare payments have a chance at break even relative to cost of delivery, but one must also consider the complexity of Medicare and Dual Eligible and oldest Medicare patients. These more to most complex patients are concentrated in lowest physician concentration counties. 

In the lowest physician concentration counties

  • The payments are less
  • The complexity is greater 
  • Recruitment, retention, locums, turnover, and supplies are more costly 
  • The new regulations are crippling physicians that still take Medicare in more ways that can be counted. 

The maps of the voting patterns of recent elections are a reasonable representation of the lowest physician concentration counties. Those in red counties have long known that they were falling behind – but they do not know the specifics.

The Runaway Stampede and More Marginalization of Primary Care Team Members

This brings up one more element – a close associate of these Four Horsemen of the Primary Care Apocalypse. This element is increasingly important – the rapidly increasing cost of delivery. Some would say that non-delivery costs are more like a stampede. 

  • The substantial sum of $40,000 more added this year per physician for quality metrics via MACRA (Health Affairs) or about 8 billion added this year alone – is subtracted from the 150 billion in primary care payments. 
  • Tens of thousands a year per primary care physician have been added for regulatory costs via EHR, hardware, info tech maintenance, certifications, practice consultants, and administrative costs. Studies indicate no savings. Security costs have added to the acceleration. Year after year design changes destabilize primary care, especially smaller and most needed primary care. Note that largest systems and practices already had these expenditures due to their size. They largest can also reduce their costs by demanding discounts. The smallest and most needed lose – by design.
  • Recruitment and retention costs have also accelerated. Without the payment design to support primary care with sufficient payment, primary care is unable to recruit and retain physicians, clinicians, and other team members. Nurse practitioners, physician assistants, nurses, techs, and other personnel can follow the payment design to health care settings with better pay, more personnel, and greater resources. 
  • As situations worsen over time and in places shortest in workforce, even greater costs are encountered. 

Is it Aggressive Family Medicine Advocacy for the Families of Family Medicine to support substantially higher cost of delivery? Is there any evidence basis for a Future of Family Medicine with crippling higher costs of delivery?

The increasing costs of delivery are staggering. There is an estimated 400 or 500 million added overall each year due to costs for recruitment and retention and locums. This could tally to 700 million due to higher turnover. 

This is small change compared to $40,000 more per physician for quality metrics (Health Affairs) or 8 billion more for 200,000 in primary care. Then you can add $105,000 per primary care physician per year for those with a primary care medical home. Punishing Primary Care with Medical Homes

Each of these only subtracts from the 150 billion ceiling for primary care resulting in a steady erosion of primary care delivery capacity just when the demand and complexity are increasing fastest and in the places lowest in primary care.

I would estimate that perhaps a few billion are added to primary care revenue and about 10 – 12 billion is lost to additional costs.

There is little doubt that the deficits must be made up by caregivers, families, community, and primary care team members. The donated time, the volunteered time, the underpaid time, add up to as much as 1 trillion contributed by those outside of formally paid health care. Americans Stand in the Gaps

Why Are Lowest Physician Concentration Counties Lowest?

What concentrates the Four Horsemen plans in certain counties? Lower cost of living and lower cost of housing are important – even if health care is more difficult to find. Veterans in particular are found in these counties with 75% of the rural population and 32% of the urban population. 

These counties have concentrations that are lower to lowest income, or have fixed incomes, or have chronic illnesses. About 40 – 43% of Disability, Social Security, and Food Stamp spending is sent to these counties with 40% of the US.

Lower property values also help shape lower support for schools and education. The states with counties furthest behind also tend not to make up the low property value inequities. 

Lower health care payments and lower education payments result in lesser economic impact – and health and education are a substantial economic impact in these counties – usually in the top 3 or 4 employers and first and second in many counties. 

The Least Healthy Counties or the Most Americans Left Behind with the Least

Slash and burn in health care, education, Social Security, Food Stamps, and other spending that distributes equitably will most impact economic and other outcomes in the 2621 lowest physician concentration counties, the Red Counties, rural settings, or other populations already most left behind. Disparities will continue to worsen health, education, and other outcomes. 

Highest Complexity Shapes Lesser Outcomes – and Lower Payments

Over 47% of poor children are found in the 2621 lowest physician concentration counties – a large concentration for places with just 40% of Americans. The population demographics reveal higher concentrations of poor, rural, disabled, Social Security, Dual Medicare/Medicaid, fixed income, least mobile, lowest transportation, least healthy populations. Diabetics, smokers, and obese people are more concentrated. In other nations, greater complexity results in greater levels of payment. In the United States the hospitals and practices caring for the most complex are paid less – and are paid even less by ACA to MACRA designs paying even less where outcomes are less – because of the local population demographics.

Readmission penalties are more likely for hospitals in these counties, three times as likely. The demographics of the counties insure lower payments for those stuck with MACRA or other pay for performance designs. Once again those who have the better locations will do better by payment designs and those who have lesser payment will be paid even less. 

The designs shape consequences that cycle into future generations. Highest levels of smoking, diabetes, obesity,  and health status issues are found in these counties. There is greater potential to address the higher levels of preventable illness, but this is about far more than clinical interventions and requires far more than a decade of effort.

Recovery of Primary Care

Shortages are seen across the nation in primary care because of lowest payments overall and lowest local primary care support where there are higher concentrations of Medicaid, high deductible, Veteran, and Medicare populations. Not only does this impact the patients that are uninsured or lowly insured, it also impacts those who are insured who live in these cities, counties, zip codes… 

Demographics and payment designs make matters even worse. Lowest concentration county hospitals and practices face the lowest payments care for populations that have the most complexity and the least resources. These are counties growing fastest in numbers, in age, in complexity, and in demand. Payment prevents the generalists and general specialties needed for 75% of local workforce. Recovery of primary care, mental health, general surgery, general orthopedics, and other general specialists cannot occur for MD DO NP or PA without true payment reform.

True Payment Reform

The four horsemen of the primary care apocalypse could be different across Medicaid, highdeductible, Medicare, VA – Designs for Medicaid could add dollars. Incentives could shift patients away from high deductible plans or include primary care benefits. Medicare could revise payment for basics up and subspecialized down (required to have any balance or increasing in the primary care ceiling). 

The VA did not choose to support local care where 50% of Veterans are found in lowest concentration counties. No, it sent 200 million down their pipeline leaving less to go for care – and instead of spending this via local established primary care offices that are demonstrated to be the most efficient – the VA will be spending on bricks and mortar and establishing new personnel and office equipment and trying to recruit and retain.

Think Local, Plan Local, Act Local

When the Southeast Rural Physician Alliance (SERPA) in Nebraska was starting out – they did not know the payers or those designing the local health insurance plans. They soon figured out who was setting up the plans and they helped benefit managers and employers to revise the plans such that local primary care and local hospitals were supported. Employers benefit when using less costly local services and employees also benefit as they save time and dollars due to less transportation. This also results in fewer dollars leaving the county as those leaving the county shop in more concentrated counties as they go to health care in more concentrated counties.

This basic lesson seems lost upon national leaders, state leaders, and leaders in primary care and in family medicine. Family medicine needs to promote what is good for family physicians and the patients of family physicians.

Is Lean Primary Care the Next Bandwagon?

The Primary Care Finances Fight is THE FIGHT for Vulnerable Populations and Health Access

Punishing Primary Care and Team Members with Medical Homes

Match Hype Hinders Health Access Solutions

Can Primary Care Survive Devaluation by CEOs and Government?

How Can CMS Improve Value in Front Line Practices Already the Most Valuable (than CMS can count)?

Please No More So Called Primary Care Solutions – No Training Intervention or Practice Rearrangement Can Work without Payment Reform

What Is Stunning in Primary Care Is No Change By Design – Numerous failed attempts to recover primary care all point to insufficient payment made worse by accelerating cost of care. 

Oregon Primary Care Medical Home Supposedly Saved 240 Million But Spent Over 250 Million – A minimum additional cost of 250 million dollars was required to save 240 million and the actual cost of delivery increases should be much higher.

Primary Care Must Rise from the Ashes of the Last 20 Years of Policy

Recovering General Surgery Is Impossible

Six Degrees of Discrimination By Health Care Payment Design – Medicare payment transparency exposes Medicare as paying less for primary care, less in the states in most need of workforce, less in counties in most need of workforce, and even less with Pay for Performance designs. Also places with concentrations of patients with plans least supportive of local care receive the fewest lines of revenue and have deficits of workforce by design.

Seeds of Health Improvement Fail on Barren US Soil – Any number of interventions can work in a nation that invests in children and improved environments, situations, and social determinants. In nations with little or failing support, health interventions can be expensive and fail to work 

Managed Care to Dartmouth to ACA to MACRA innovators have failed to focus on the patient factor changes that could improve outcomes but the innovators have managed to change physician behavior –  the wrong way to turnover, retirement, closures of practices, larger practices, avoidance of complex patients, disengagement, lower productivity  

Value Failure By Those Who Promote Value – Rapid change, confusing changes, costly change without outcome improvement, adverse impacts of quality measures, forced decisions for mergers or closures, failure to support most needed generalists and general surgical specialties to meet demographic changes, and greater challenges due to declining health and social resources where most Americans need care 

Does Anyone Understand that High Cost High Need Patients Drive Consumption?

Medicaid As Savior or Betrayer of Access – Higher payments from Medicaid can increase access for patients with all types of insurance or lack thereof. Medicaid expansion with low payment compromises the workforce to care for Medicaid patients and other patients with or without insurance

Selling and Swelling a Bigger HITECH Bubble

Of all the forms of inequality, injustice in health care is the most shocking and inhumane.

Martin Luther King, Jr. 

Robert C. Bowman, M.D.

The blogs represent the opinion of the blogger alone.

Basic Health Access Web   Basic Health Access Blog   World of Rural Medical Education

Copyright 2016

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