Cure for Healthcare Costs? Salaried Primary Care Physicians, Experts Say

In an op-ed penned for the Wall Street Journal, the CEO emeritus of Boston's Beth Israel Deaconess Medical Center said the remedy for the country's healthcare costs lies in salaried primary care physician groups that must practice within a budget.

Mitchell Rabkin, MD, served as Beth Israel's CEO from 1966 through 1996 and now serves as a professor of medicine at Harvard Medical School in Boston. He co-penned the op-ed with John Cook, an independent consultant in healthcare reimbursement.

The experts said CMS' innovations for payment reform, such as accountable care organizations, are unlikely to result in success unless the care delivery system is controlled by primary care physicians who are salaried and practice within a fixed budget. Dr. Rabkin and Mr. Cook pointed to Oakland, Calif.-based Kaiser Permanente as an example of this practice.

"Under most conventional fee-for-service plans, physicians are paid only for insurer-approved actions but denied fees for other time spent that might be useful for the patient's health," according to the op-ed. "Kaiser Permanente physicians operate under a fixed budget but are free to decide with the patient what is in the patient's best interests."

In the pilot program described by Dr. Rabkin and Mr. Cook, these "fixed budgets" would be set by Medicare just as the agency sets target budgets for ACOs. When appropriate, primary care physicians would direct patients to the proper specialist. If patients went elsewhere for care, ignoring the primary care physician's referral, they would pay higher co-pays or deductibles, according to the report.

"With the costs of hospital-based specialists and other specialists for outpatient care kept within budget, the primary care physicians group would tend to refer to specialists who were prudent in expenditures and delivered care of high quality and with high patient satisfaction," Dr. Rabkin and Mr. Cook wrote.

Money that went unspent in the annual budget would then be distributed to the physicians group, the insurer and patients in the form of reduced premiums, according to the op-ed. So far, the experts said no Medicare pilot programs "have brought together the incentives and accountability in the way we propose," and only a very few have been established with private payors.

More Articles on Hospitals and Payment Reform:

The Cost Reduction Imperative
AHRQ: Bundled Payments May Lead to Lower Healthcare Costs
6 Primary Care Imperatives for Health Systems


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