American College of Physicians: Internal Medicine — Doctors for Adults ®


Redesigning federal policies to support patient-centered care

From the March ACP Observer, copyright 2007 by the American College of Physicians.

After years of neglect, health care reform is resurfacing as a major issue for federal policymakers. Prompted in large part by the efforts of state governors to design and implement measures to expand health insurance coverage and lower the cost of care, Washington is beginning to take a fresh look at the issue.

The College is a leading voice for reform. At a Jan. 19 press conference, ACP released two new policy statements on expanding health insurance coverage, reducing costs and increasing health care quality:

  • A Report from America's Internists on the State of America's Health Care, which presents the College's vision for reforming federal programs to achieve a patient-centered health care system for all Americans; and
  • A System in Need of Change: Restructuring Payment Policies to Support Patient-Centered Care, which proposes an entirely new way of paying physicians to deliver patient-centered care.

The state of national health care

Numerous studies show that the U.S. spends more on health care than any other industrialized nation, yet this increased spending does not result in better outcomes. By some measures—higher mortality rates and inconsistent access to recommended preventive services—Americans have poorer outcomes than those in other industrialized countries. The U.S. is also the only industrialized nation that does not provide universal access to affordable coverage.

A solution to such inadequacies is to redesign the health system to support patient-centered care.

Patient-centered care starts with the premise that the foundation of good health is the relationship between a patient and a personal physician. It provides patients with a single point of comprehensive and longitudinal care for the whole person. This model-also called the patient-centered medical home—provides physicians with the tools they need to manage and coordinate care effectively. It revamps payment policies to recognize the work associated with care coordination and the costs of acquiring necessary information technology.

A patient-centered health care system also would assure that that all Americans have access to affordable health insurance coverage, since by definition, a health care system that leaves 47 million Americans without coverage is not patient-centered.

The College has put forth several proposals:

  • Enact legislation to provide states with a dedicated source of federal funding to expand health insurance coverage and to design their own health programs around the patient-centered medical home.
  • Allow states the option of enrolling Medicaid and S-CHIP recipients in a patient-centered medical home without having to obtain permission from the federal government. State governments are more likely than the federal government to take action to expand coverage and make the patient-centered medical home available to all residents. Two states–Missouri and Louisiana–have already proposed to make the medical home a centerpiece of efforts to revamp their health programs.
  • Expand federal entitlement programs and provide tax subsidies for lower-income persons to buy into the Federal Employees Health Program.
  • Revamp federal and private sector payment systems to support the value of patient-centered care.

Reforming physician payments

The College advocates that Medicare no longer pay physicians based solely on how many procedures or visits are billed. Instead, physicians who adopt the medical home system would be eligible for an alternative payment model by going through a voluntary process to demonstrate that they have the systems in place to deliver patient-centered care, such as:

  • ability to access evidence-based clinical decision support guidelines at the point of care;
  • capacity to generate reminders to patients on self-management and treatment recommendations;
  • use of patient registries to track patients by disease condition;
  • secured e-mail and telephone consultations that provide patients with enhanced access to care; and
  • ability to measure and report on the quality of care provided.

Physicians in qualified practices would then be eligible to receive a bundled, prospective fee for the physician work involved in managing and coordinating care that falls outside of the face-to-face encounter.

"Bundled" means doctors would be paid for a defined package of services rather than on a piecemeal basis. This bundled fee would also include an allowance to offset a substantial portion of the costs associated with acquiring the systems needed to deliver better care.

The bundled payments would be risk-adjusted to account for the additional physician work and practice expenses involved in caring for patients with multiple chronic diseases and severe acute illnesses.

"Prospective" means that physicians would be paid a defined and guaranteed amount per patient per month for the services included in the bundled package.

The prospective payment would be combined with fee-for-service billing for face-to-face office visits. Maintaining a fee-for-service component for visits reduces the possibility that prospective and bundled payments could have the unintended consequence of creating incentives for physicians to avoid seeing patients face-to-face. Finally, the alternative payment structure would include a performance-based component for reporting on evidence-based quality, cost and patient experience measures.

For physician practices that do not qualify as a medical home, the College proposes revisions in Medicare fee-for-service payment policies to allow for separate payments for specific services associated with care coordination.

The College also proposes to eliminate Medicare's sustainable growth rate, which triggers annual cuts in payments to physicians whenever spending exceeds growth in the economy. The SGR should be replaced by a fairer and more accurate system to stabilize payments to physicians and create strong incentives and rewards for physician engagement in programs to improve quality and lower costs.

Impact of the College's proposals

Patient-centered primary care is not just a theoretical model. Other countries have implemented it successfully and achieved higher quality and more efficient use of resources. Within the U.S., states that rely more on primary care physicians consistently have lower Medicare expenditures, lower utilization, fewer ICU deaths, fewer hospital admissions and better composite overall quality scores. Patient-centered primary care has also been effectively implemented within the U.S. by the VA and other health programs that are getting far better results than the national norm.

The College's proposals would result in better care for all Americans. At the same time, they address internists' frustration with a fragmented system that systematically undervalues the importance of their relationships with patients and at times makes it impossible for them to provide patients with the care they need and deserve.


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