Over the past decade there has been a meaningful effort to shift how we pay physicians. Under the status-quo, fee-for-service (FFS) payment model, which reimburses clinicians based on the number and types of services delivered, physicians may be motivated to focus on providing more care regardless of medical necessity or outcomes for patients. FFS also fails to incentivize and adequately reimburse for the types of services that are important for delivering high-quality care to combat chronic disease and improve patients’ health.
Evidence suggests that population-based payment models, like accountable care organizations (ACOs) and capitated payments for primary care, are among the most promising ways to improve efficiency within the health care system and promote the delivery of personalized, high-quality care.
Arnold Ventures has long supported the shift away from FFS reimbursement, through work aimed at increasing the share of patients in population-based payment models that hold providers accountable for the cost and quality of care. This week, health leaders are coming together for Health Care Value Week to explore new ways to improve physician reimbursement and continue the move toward alternative payment models. We spoke with Natalie Davis, CEO of United States of Care; Ann Greiner, president & CEO of the Primary Care Collaborative; and Sophia Tripoli, senior director of health policy at Families USA to hear their thoughts and insights on where payment reform is heading, and what it could mean for patients, physicians, and the health care system as a whole.
*Answers edited for length and clarity.
Arnold Ventures
Population-based payment models, like accountable care organizations, are one of the most promising ways to improve efficiency within the health care system and promote personalized, high-quality care for patients. Can you elaborate on their value?
Sophia Tripoli
Population-based payments pay providers for what they do best – preventing illnesses, treating and managing disease, and ensuring their patients get the health care they need to get and stay healthy. Coupled with strong quality metrics that hold providers accountable for delivering high-quality care, population-based payments also promote the delivery of well-coordinated care and enable providers to more effectively manage individual and population health outcomes.
Natalie Davis
When we asked people across the country what they want their health care experience to be, they often described an approach in which their provider genuinely cares, treats them as a whole person rather than a series of symptoms, listens attentively, and addresses their issues directly, rather than over-relying on medication.
Ann Greiner
When designed and executed well, population-based models give clinicians the support and tools they need to help people manage all aspects of their health. And the evidence has shown that this approach – especially when it’s led by primary care – leads to better outcomes and generates savings.
Sophia Tripoli
By paying one health care provider, typically a primary care organization or health system, a monthly capitated payment for most or all of the health costs of a population, providers have the financial resources they need to meet the diverse health care and health-related needs of their patients to improve overall health. This type of payment doesn’t incentivize providers to just order more unnecessary tests and procedures that only address physical health and that drive wasteful spending, but instead financially incentivizes providers to deliver more person-centered, whole person care.
Natalie Davis
The promise of population-based payment models is coming into closer focus, demonstrating cost savings and improving health care outcomes. Moreover, and perhaps most importantly, the shift into these models allows patients to receive the comprehensive, coordinated, and personalized care that they tell us they desire.
Arnold Ventures
The U.S. spends more per capita on health care than any other high-income country, yet our nation is plagued by chronic disease and ranks lower on population health outcomes. Does FFS reimbursement contribute to our health system’s poor performance?
Sophia Tripoli
Absolutely. FFS payments incentivize health care providers to make money by performing more high-profit or high-margin procedures, rather than allowing providers to generate a profit based on keeping people healthy and reducing disparities. As a result, people across the US are paying more and more for health care without getting healthier.
Ann Greiner
Pure fee-for-service encourages more services, particularly those that are higher priced, but not always better patient care. As a result, health care dollars have been systematically shifted away from what works to keep us healthy – primary care – and toward a conveyor belt of higher-cost, more acute care.
Natalie Davis
There is little coordination between providers, and patients spend more time waiting to see their doctors versus time spent with their doctors. Moreover, fee-for-service payment tends to devalue primary care, which has proven to lower costs and improve outcomes, and often prioritizes less effective, high-cost, and low-value care methods instead.
Ann Greiner
By moving to appropriate hybrid payments providing upfront payment, primary care practices can grow the teams and infrastructure they need to help people prevent and better manage chronic conditions. That is how we start improving Americans’ health while also curbing costs.
Sophia Tripoli
Shifting away from fee-for-service reimbursement towards payment models that directly hold providers accountable for the cost and quality of care, and health outcomes of patients, would better align the health and financial security of the American people –including the 129 million people living with chronic disease — with the business model of the health care sector.
Arnold Ventures
Why is now the right time to talk about the move away from FFS and toward patient-first care?
Natalie Davis
People deserve a system that delivers on the basic promise of affordable, accessible, quality health care. By more than a 4:1 margin, people prefer a health care system that pays for results rather than volume. This support is consistent across demographics, with people preferring patient-first care over FFS regardless of their political party.
Ann Greiner
We can’t afford not to — and there is interest on the part of the new administration and Congress for payment reform. The American sick care system is broken – despite spending significantly more per person on health care, chronic conditions are on the rise and life expectancy is lagging other industrialized countries. If we continue down this path, the cost – rising health care bills and declining health outcomes – will be too much to bear. We are getting close to that point.
Sophia Tripoli
The new administration, including recently confirmed HHS Secretary Kennedy, continues to express interest in a policy agenda focused on addressing waste and inefficiency in the health care system. Fee-for-service reimbursement is one of the biggest drivers of wasteful spending across the U.S. health care system.
