Extensive changes are needed in the payment systems for physicians and
other clinicians as part of health care reform, say physician leaders who met
with members of the Obama administration at a physician forum in March.
"We need major change in the payment system," said APA Medical
Director James H. Scully Jr., M.D., who attended a White House physician
health care reform meeting in March. "Physicians want to be paid for
doing the right thing for their patients" (Psychiatric News,
Under current reimbursement approaches, physicians are frequently caught
between efforts to control costs and improve quality, with little attention
given to long-term health care outcomes on which clinicians are focused.
"You don't have to pay us for everything we do," said AMA
President Nancy Nielsen, M.D., at a forum sponsored by the Alliance for Health
Care Reform in March. "On the other hand, when you deliberately don't
pay us for some things, it does send a pretty powerful message."
Numerous options have been proposed to reinforce the goal of many reformers
that physicians should be focused on long-term health.
Among prominent payment reform approaches that have been proposed by
physician advocates and health policy experts are increasing the compensation
for primary care, using bundled payments to cover care over a specified period
of time, and offering clinicians financial incentives to serve as"
medical homes" for patients and coordinate care among all the
clinicians treating a particular
With regard to increased compensation, much of the payment reform debate
has been focused on what many experts view as the powerful disincentives that
current payment systems create for physicians to provide primary care. The
long-standing, low reimbursement for primary care has been linked to the
shrinkage of that area of medicine as a percentage of medical fields and to
declining numbers of medical students going into primary care, according to
The current payment structure impacts psychiatrists in a similar manner,
Scully said, because their health care services—like those of primary
care physicians—are relatively low cost and do not drive increases in
overall health care costs "but are not well paid."
Another prominent approach to payment reform is to extend physician use of"
bundled payments" that already are given to hospitals as a
per-patient "case rate." Such bundled payments are given as lump
sums to clinicians for care they provide to a patient over a set period of
A report on health care payment reform released in February by the
nonpartisan Commonwealth Fund suggested revising the Medicare fee schedule to
boost primary care payments and add annual increases. The Commonwealth Fund
report and other reform studies also have advocated broad adoption of the
medical-home model to encourage more accessible, coordinated, patient-centered
care that focuses on long-term health promotion and disease prevention.
Medicare's medical-home pilot projects improved communication with patients
through phone calls and secure e-mail and offered benefits such as improved
patient self-management skills, said Robert Berenson, M.D., a senior fellow at
the Urban Institute and former director of Medicare payment policy and private
health plan contracting at the Centers for Medicare and Medicaid Services
(CMS). Medical homes also have improved communication with other physicians
and community-based services that provide care for their patients, he said.
However, such care-coordination services are difficult to track and are
unlikely to work in fee-for-service payment systems, which generally do not
reimburse for that work, Berenson noted.
"We need to move from the fee-for-service system that dominates our
health care now to payment systems that reward taking broader accountability
for patient outcomes and care and also for high performance in terms of
efficiency as well," said Stuart Guterman, assistant vice president of
the Commonwealth Fund's Program on Medicare's Future and former director of
the Office of Research, Development, and Information at CMS.
The benefits of a medical-home approach are expected to especially benefit
people with serious mental illness, who often have co-occurring nonpsychiatric
illness and require long-term, chronic disease care. APA has urged CMS to
expand its medical-home project to include psychiatrists as the coordinating
physician of patients with serious mental illness and co-occurring
nonpsychiatric health problems. Pilot programs by CMS explicitly bar
psychiatrists serving patients as their medical homes.
The greatest benefits for both clinicians and patients ultimately may come
from a combination of the various payment reforms under consideration,
according to physician leaders and reform advocates.
"In the end, we need to consider doing hybrids of all of these
approaches," said Berenson, a leading Medicare expert. "Each has
its strengths and weaknesses."
For instance, Berenson said medical homes that improve care coordination
for patients with chronic conditions could be reimbursed as a monthly
per-patient fee, while individual office visits could still be based on
Implementing such a hybrid approach nationwide could be problematic, said
Bruce Hamory, M.D., executive vice president and chief medical officer
emeritus at Geisinger Health System in Pennsylvania.
"Whether you can in fact do that with a piece of legislation for the
country as a whole is a different matter," Hamory said. He urged that
physician groups or "other accountable organizations" decide
specific reimbursement combinations based on the economics of specific regions
Hybrid reimbursement systems also could use pay-for-performance approaches,
which are popular with many health reform leaders in Congress, to try to avoid
unintended side effects, such as undertreatment.
Regardless of whether a hybrid or a new single-payment system is devised,
the AMA's Nielsen urged caution in any changes undertaken in health care
"We think that there may be a problem if it's a one-size-fits-all,
immediate shift in payment," she said.
The Commonwealth Fund study "Reforming Provider Payment:
Essential Building Block for Health Care Reform" is posted at<www.allhealth.org/briefingmaterials/CMWFreformingproviderpayment-1423.pdf>.▪