Doctors wary of value-based models

A key component to making value-based payment models work is getting physicians on board. But while physicians are supportive of the improved care coordination of such models, they are wary of how the payment structure will work.

“We have a situation where to reduce healthcare costs, which is through better management of patients, those same individuals who hold the key to better management of patients say ‘not me,’” said Farzad Mostashari, MD, during a physician payment forum sponsored by the Brookings Institution. Mostashari, the former national health IT coordinator, is now a visiting fellow in economic studies at Brookings’ Engelberg Center for Health Care Reform.

[See also: Physicians lead on new payment models]

He cited a survey in which only 7 percent of physicians reported favoring eliminating fee-for-service.

But if given the financial capability, countered Mark Wagar, president of Heritage Medical Systems, a physician-led healthcare solutions organization that is an affiliate of the Heritage Provider Network, physicians “will go there. You can enable them to do extraordinary things.”

As an example, Wagar pointed to Heritage Provider Network and its partners. Operating in California, New York and Arizona, the physician-led integrated health system provides care to about 800,000 individuals.

HPN’s physicians are prepaid a fixed amount of money per patient per month. (Some also still receive a fee-for-service component.)

“We have the luxury – when you’re paid that way ­– that physicians are essentially controlling the resources to pay physicians differently,” said Wagar.

Because they have payment control, physicians care for their patients differently, which results in better outcomes for the patients and lesser costs to the healthcare system.

For example, he said that Heritage’s independent practices in New York, consisting of about 1,400 primary care physicians, have 100 fewer admissions per 1,000 in their Medicare population than the general New York market.

A small FFS practice currently is driven by either “wait-or-create” events to bill for so they can pay to operate their practice ­– front desk staff, a nurse and phone system. A system like Heritage can pay these independent practices upfront monthly for the care management plus a FFS component.

While it is essential that payment reform models include some part that is prepaid, that’s only one part of making it work well, Wagar said.

HPN, for instance, partners with hospitals and works with “sophisticated payers” who participate in their partnership with better data, better expectations and shared risk.

“The common thread is that these are physician organizations that are driving the change,” he said. “You won’t get the combination of quality and cost change that is sustainable unless they are in a position to drive it.”