Paying for Primary Care: Fee-for-service has got to go

by David Gimlett, M.D.                                 

While the U.S. has been watching the disappearance of primary medical care, the federal government continues to use a payment system that drives physicians away from primary care.(1) This in spite of the fact that it has been well documented that the quality of medical care is higher and costs are lower in regions that have a high percentage of primary care physicians.

Reimbursement rates for health care services have been established by physicians’ organizations since the 1950s, starting with the relative value scale devised by the California Medical Association. That scale was later refined as the resource-based relative value scale (RBRVS). From the beginning, it has valued surgical and diagnostic procedural services over more time-intensive primary care services. In 1991, the American Medical Association convened its Relative Value Scale Update Committee (RUC), which meets three times a year to recommend valuations for billing codes. That committee is dominated by specialty and subspecialty societies with very little primary care representation.

The problem is that the fee-for-service system (FFS) undervalues the work of the primary care physician, the time consuming office visits needed for health maintenance, complex diagnostic work-ups, care of chronic illnesses and coordination of care. The paperwork and amount of uncompensated work combined with the high office overhead of the generalist’s office, drives the physician to see as many patients as possible in a day’s work. There is very little time to listen to the patient’s narrative, to answer questions, to review previous records, to coordinate with the care being given by other physicians, to formulate and explain a treatment plan, to order necessary tests and treatments, and to update all of the patient’s health maintenance needs.

The result of all this is to lower the satisfaction of both the patient and the physician. Health care becomes less personal, increasingly fragmented and expensive.

While all of this is happening, medical and surgical specialists who perform procedures enjoy high rewards through FFS for doing those procedures. The private insurance industry, as well as Medicare and Medicaid, use the same scheme in their payment policies. It is no wonder that our medical school graduates are turning away from primary care.(2) As Uwe Reinhardt, the Princeton University economist writes, ”Surely there is something absurd when a nation pays a primary care physician poorly relative to other specialists and then wrings its hands over a shortage of primary care physicians.”(3)

It is estimated that by the year 2025 we will need an additional 52,000 primary care doctors. In the past 16 years the number of U.S. medical school graduates choosing family practice residencies has dropped over 50% to 1,500 per year. There is no provision in the present Affordable Care Act  (Obamacare) to significantly reverse this trend.

Today’s  fee-for service payment system in the United States isn’t working and can’t work. What is needed is universal health coverage and all physician salaries negotiated with a single payer, i.e., a judiciously improved Medicare for all.


Suggested Reading:

1) 1. What Every Physician Should Know About the RUC.   AAFP

2) 2. Results and Data 2013 Main Residency Match.   NRMP

3) Uwe E. Reinhardt  The Little-Known Decision-Makers for Medicare Physicians Fees.  N.Y.Times (complete reference