May 17, 2019

For Better Primary Care Access, Look to Supply-Side Solutions

Last week, we discussed why it is difficult to improve access to primary care services by re-engineering the payment system. The Center for Medicare and Medicaid Services (CMS) has initiated a transition from a primarily fee-for-service model to what it calls a “value-based care” model, where doctors are ostensibly paid for outputs (patient health outcomes), rather than for inputs (“fee for service,” or FFS).

This sounds straightforward. Who doesn’t want to pay based on the “value” of their health outcomes?

But, as Mercatus senior research fellow Robert Graboyes pointed out to us, this “simple” reform is perhaps too simple.

First, the CMS plan requires accurate health outcome measurements which could be difficult to design. Furthermore, a transition to a mostly “value-based” payment model could create equivalent problems in the opposite direction; sometimes, fee-for-service or other payment models could make more sense.

To really make a difference in primary care access, and better access to healthcare overall, policymakers should consider the reform options laid out by the Healthcare Openness and Access Project (HOAP) of the Mercatus Center. By removing barriers to healthcare supply, we can unlock affordable and innovative medical delivery options that might never have occurred to top-down planners. Here are just a few options to unleash healthcare supply.

Increasing Access to Primary Care: Three Solutions

Tinkering along the edges of payment reform can only do so much. Many of our healthcare problems stem from unnecessary and harmful barriers to the supply of medical goods and services.

In some cases, these restrictions are well-intentioned but not worth the costs. In others, established regulations simply have not kept up with innovations in medical delivery. Sadly, some such barriers merely protect certain interest groups at the expense of patients—intentionally or unintentionally.

In each case, it is America’s healthcare consumers and shut-out providers that ultimately bear the burden. Here are three possible solutions:

Remove Telemedicine Restrictions

Telemedicine is the quintessential 21st century solution to shortcomings in primary care. Recent technological advances like broadband and video conferencing have now made telemedicine services reliable, and such services have the potential to improve the lives of millions of Americans.

A wide range of individuals currently struggle to access primary care due to their physical condition or geographic location—for example, people with disabilities, those who live in rural areas or busy urban centers, those who become ill at night or while traveling, and parents who need quick diagnoses for their children before heading out to work. Thanks to telemedicine, those patients can access crucial services using their personal computers, tablets, or smartphones.

However, telemedicine is still waiting for its “Uber moment”–the equivalent of the inflection point when customers switched from taxis, private vehicles, and public transit to the convenient ride-sharing services. Telemedicine is easy to use, but antiquated payment systems are slowing the diffusion of this technology. Public and private payers have been slow to grant reimbursement to telemedicine services.

This is closely related to the fact that private insurers’ reimbursement models largely mimic those of Medicare, and Medicare itself has taken a conservative, sluggish approach to reimbursing telehealth services. Providers, in turn, are reluctant to experiment with telemedicine, as a televisit, if not covered by insurance, will likely cost more than the copayment for physically visiting a doctor’s office. Another obstacle to telemedicine expansion lies in patients’ inability, in many cases, to use their Health Savings Accounts (HSAs) to pay for online consultations.

To enable telemedicine to flourish so that more patients can benefit from its convenience and increasing reliability, state and federal policy should embrace the reimbursement of those services by their public programs. Experience suggests that private payers will follow suit.

Full Practice Authority

We’ve been undergoing a primary care physician shortage for quite some time now, with less than half of the population having sufficient access to primary care providers.

This state of affairs is in fact reflected in the reasoning proposed by CMS in setting up its new program: “For years, policymakers have talked about building an American healthcare system that focuses on primary care, pays for value, and places the patient at the center,” stated HHS Secretary Azar.

The current system doesn’t rely on primary care because it can’t. Part of the problem is that federal reimbursement rates for PCPs are considerably below what they would be in an unfettered market. As a result, there aren’t enough primary care providers.

There is a readily available solution, and some, but not all, states are already making good use of it. Nurse practitioners, pharmacists, and physician assistants, among others, are able to perform many of the tasks that are currently the responsibility of physicians—not just able, but formally trained to do them.

The reason they’re not performing those tasks is because state regulations prevent them from doing so. For example, 38 states require nurse practitioners (NPs) to work under the direct supervision of a doctor, which significantly hinders their ability to serve individuals in remote places.

Research shows that healthcare quality doesn’t suffer as a result of scope expansion. As such, granting full practice authority to medical professionals can lead to more access to primary care by increasing the number of providers and lowering costs, since non-physician providers have lower rates.

If we add telemedicine expansion to the mix, we can see drastic improvements in access to quality primary care, especially in those states that currently impose restrictions on telehealth and practice authority.

Direct Primary Care

In the 1930s, it was common for multiple physicians to form a group and for patients to pay a standard fee to have access to their services. Individuals didn’t have insurance; they paid that fee directly to the providers, who bore the risks that came with the pool of patients they served. Over time, health insurance replaced this subscription model, and fee-for-service became the norm.

Fast forward to today: the burden of dealing with insurance has become so great that some primary care physicians have decided to return to a physician-led system of delivery and subscription payment. Enter Direct Primary Care (DPC), a type of concierge medicine that allows a patient to enjoy a wide range of primary care services (often including telemedicine) for a monthly fee ranging between around $25 to $75.

This system has many benefits for patients and physicians, as they are able to take full advantage of visit time to investigate health issues thoroughly without having to comply with the burdensome administrative requirements placed by insurers. In many cases, patients can also communicate with doctors via telephone, email, and video link and can collaborate on personalized treatments without the threat of ineligibility for reimbursement.

Here, too, regulation is making it difficult for this patient-focused solution to reach the masses. Two critical steps need to happen: first, policies need to recognize DPC as a valid way of providing healthcare services. Second, it should be possible for patients to use existing payment options to purchase it.

In its infancy stages, DPC quickly ran into a problem: insurers claimed that because physicians were assuming a risk by collecting payment in exchange for an unspecified number of services, DPC practices needed to be subjected to the same rules as insurance companies. As of today, over 20 states have taken action to ensure that DPC is not considered to be an insurance product, thereby allowing DPC practices to function as intended.

The next challenge is reimbursement. While the goal of DPC is to bypass entanglement with insurance, most patients still need insurance for catastrophic health events and services beyond the scope of primary care. Experts have proposed embedding DPC into the current healthcare system, thus enabling patients to more fully benefit from the DPC model. For example, federal lawmakers could allow people to pay DPC fees using their HSAs.

With a regulatory environment that allows DPC to flourish, this model has the potential to provide patients with enhanced primary care services at an affordable cost.

More Supply Means Better Access

The virtue of supply-side reforms like those discussed here is that they provide patients with more options. Right now, we can think of our healthcare system as somewhat frozen in time. There are sundry options to unleash providers and delivery mechanisms to better address the varied needs of our diverse population.

These are just a few ideas to expand primary care access. Mercatus scholars have researched a menu of reforms to make our system more open and accessible. Different states have different barriers to healthcare supply—policymakers interested in providing more healthcare choice to their constituents should consult our Healthcare Openness and Access Project to determine exactly which reforms make the most sense for their situation.

Value-based payment reform, to the extent that it aligns incentives between patients and physicians, is a promising option. But, if we really want quick and reliable access to primary care, there’s no need to wait for the federal government to act: states can directly put delivery-focused reforms on the menu.

Photo credit: Amir Levy/Getty Images

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