Putting the Profits Back in Primary Care

A Wall Street Journal editorial offers a brief history of how Medicare's efforts to control costs and reduce the over-utilization that resulted from its early, straight fee-for-service model:

To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.

Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists—especially those who perform a lot of procedures—do extremely well. Primary-care doctors do not.

The author of the editorial blames Medicare patients for this outcome, contending that "With payment coming directly from Medicare and the federal government, patients who used to pay the bill themselves no longer cared about the cost of services." That's part of the story, but it's also fair to say that most people seeking Medical care under Medicare are doing so because they believe they need it, not because it's free. Yes, but for Medicare many wouldn't be able to afford some, most or all the care they receive, but that's a separate issue from whether their being insured leads to their obtaining services they don't need. But it is also important to recognize the role of doctors in creating this situation - including the Rand Paul types for whom Medicare continues, by all appearances, to be a gravy train.

In fact, Paul — who says 50% of his patients are on Medicare — wants to end cuts to physician payments under a program now in place called the sustained growth rate, or SGR. “Physicians should be allowed to make a comfortable living,” he told a gathering of neighbors in the back yard of Chris and Linda Wakild, just behind the 10th hole of a golf course.

I find it interesting that it is argued that Medicare has come up with what is considered to be the best, and thus near-universally copied, model for cost containment, despite the broad acknowledgment that primary care physicians are (in relative terms) undercompensated as compared to specialist physicians. But outside of the context of Medicare-eligible patients, how is that Medicare's fault? Why isn't that the fault of the private insurance companies who have been unable to devise a superior system for controlling costs and providing compensation that's more fair to primary care doctors?

The author argues,

The solution to the problem is making primary-care physicians the captains of the ship. They must have the time and financial resources necessary to take care of their patients, tailoring care to patients' specific conditions and needs. And they need the data to track their patients' results, so they can guide patient progress. They will then be able to slow (and sometimes reverse) their patients' illnesses, keeping them out of hospital emergency rooms and specialists' offices. The end result: reduced costs and improved quality of care.

Except that's a description of what we want from primary care, not an explanation of how to achieve that outcome. The author's statement is tantamount to saying, "The solution to balancing the budget is for the government to spend no more money than it receives in taxes". Yes, but how do we get there from here.

Finally, when the author laments,

Politicians and mathematicians in ivory towers have placed primary care last in line for respect, resources and prestige—and we all paid an enormous price.

How does he fit in? The editorial was written by Richard M. Hannon of Blue Cross Blue Shield of Arizona. He and his peers aren't politicians, so I guess they must be "mathematicians in ivory towers"? Because if they weren't, surely they never would have adopted Medicare RBRVS, or would at least have revised it while working hard to develop a superior alternative. Wouldn't they?