4.1.3 How is Primary Care Paid?

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Do curso por University of Minnesota

Healthcare Delivery Providers

116 ratings

University of Minnesota

Healthcare Delivery Providers

116 ratings

Curso 2 de 5 em Specialization Healthcare Marketplace

Welcome to the exciting world of Healthcare Delivery Providers! This second course in the Healthcare Marketplace Specialization will help you understand the various providers of healthcare across the U.S. delivery continuum. We will explore the unique value proposition of the various providers- from hospitals and clinics to physicians to community based providers. We will dissect this important value chain using various lenses such as- site of care delivery, people who provide the care and payers who pay for care. You will also learn about the challenges facing these providers and the innovations they are creating in order to help transform this important industry. I will use readings such as a case study and videos to make this learning more experiential for you, so that you can see and feel the world of healthcare delivery. I will also explain the various acronyms and specialized terms used in healthcare, so that you become more proficient and familiar with the language. Given the fact that Healthcare is one of the largest industries in the U.S. and growing at an rapid pace, it is critical that current and future leaders understand the internal and external drivers that are shaping this industry. Current and future leaders will need to constantly innovate in order to sustain this industry into the future- by creating value for the end customer and the entire population, as well as increasing engagement of the humans who work within this industry. Get ready to take a deep dive into the complex ocean that is U.S. healthcare delivery- and make sure your oxygen tank is securely fastened!

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PHYSICIANS: PRIMARY, SPECIALTY, NEWER SETTINGS & POPULATION HEALTH

In this module I will review the various types of physician practices and clinics. These include primary care physicians and specialty care physicians and their clinics. We will review how the various physicians are organized, how their performance is measured, how they get paid and also what challenges they face and what innovations they are leading. Welcome to the exciting world of physicians!

4.1.1 What are Primary Care Clinics?7:25

4.1.2 Primary Care: Services & Organization7:35

4.1.3 How is Primary Care Paid?6:09

4.1.4 What is a Medical Home?5:01

4.1.5 How is Primary Care Performance Measured?7:29

4.1.6 Primary Care: Challenges & Innovations8:07

Conheça os instrutores

Dr. Rahul Koranne
Faculty
Carlson School of Management, Department of Finance

This is the Healthcare Delivery Providers,

part of the Healthcare Marketplace Specialization.

This is Module 4.1.3 Primary Care, Payments.

The learning outcomes for this lecture, we will discuss how primary care physicians

and clinics get paid, and discuss some of the newer emerging payment models.

Relative value unit, accountable care organizations,

fee for service, pay for performance.

Predominant model for payment for primary care physicians is still the fee for

service model, which pays for every single service or procedure that is performed.

And there is obviously a direct volume relationship so

the more patients that that are seen, the more procedures that are performed,

the more times diabetic patients is bought into the clinic to be seen,

the more the compensation for that physician and for that clinic.

Here's the basics of how a fee for service payment is derived.

It depends upon what are called the evaluation and

management codes and documentation.

These depend upon a standardized set of codes and it's a very long

list of codes called Current Procedural Terminology, or CPT codes.

These depend directly on the type of patient.

So, if it's a new patient,

it's a heavier weight because the physician will need to start from scratch.

Or if it's an established patient that,

that physician has already seen, the weightage is lower.

It also depends upon the type of setting the patient is being seen in.

So either is it the office?

Is it during a home visit?

Is it during an urgent care visit?

And then the level of the E&M code depends upon the complexity of the patient.

So the history, increased weightage for a comprehensive history.

Examination findings, how many different body parts were examined, and

then obviously, the medical decision making.

So the more complex the patient and the condition and

the diagnosis, the higher the fee.

We have looked at this very complicated equation before, and I don't want you to

dig into the details of it, but understand the overarching view and the philosophy.

So each CPT code has a relative value unit which is standardized measure of how much

time and intensity the physician spent in taking care of that patient.

And then those RVUs are divided up

into either facility or non-facility parts.

And the work RVU, for example, has the time spent, the skill of the physician,

the training of the physician, and then the intensity of a service.

Also, the RVU has other parts and components in it.

For example, the rent of the clinic, the equipment in the clinic,

supplies, and the other staff and their salaries, all increase the RVU weightage.

Also a part of the RVU is to pay for malpractice protection, and

these are professional liability expenses.

Then, the RVUs are changed and modified, and

adjusted by geographical cost index of a practice, and

then finally multiplied by a conversion factor,

which then converts the RVU into a dollar figure

that is then paid to the physician practice.

Let's do a quiz.

Some of the other services that primary care providers and

practices have started providing as a way to increase revenue or

become more comprehensive in what they offer.

Might be ancillary services like medical spa, might be x-ray services.

Sometimes they dispense medications called point of care dispensation of medications.

Lot of the clinics have lab services to do basic labs and

other counseling services for either psychological counseling or diabetes or

other medical conditions counseling.

As we've discussed before, the fee for service model is rapidly changing.

So a newer payment model or an alternative payment arrangement might be an ACO,

Accountable Care Organization,

which is made up of building blocks of primary care.

And it has a very different payment methodology based upon risk and reward for

reduction in cost and improvement in quality for the attributed population.

And all of those savings or share on the gains

hopefully will trickle down to the primary care practices that make up that ACO.

There are many other types of pay for performance.

Metrics and incentives that come directly from payers either governmental payers or

commercial private health insurances.

And then there was a recent reform just last year in Medicare payments which is

pushing the Medicare payment to physicians to start including what is called

the Merit Based Incentive Payments.

And also pushing to continue to move with increasing percentages towards alternative

payment models, again, to recognize quality performance, reduction in cost.

And then there will be sticks and carrots to incentivize the primary care providers.

Summary, the fee for service method is still the dominant method for

primary care based upon relative valued units, a complicated equation and

calculation, but it again, trickles down into the intensity of services

which is directly related to the patient's complexity of illness.

As we have discussed,

there are newer models of payment that are rapidly evolving,

trying to push towards performance in outcomes in population health.

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