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New Jersey Healthcare Plan Favors State Employees over Taxpayers


New Jersey is already a primary-care physician shortage area. A new state plan makes the problem worse by giving state employees special status.

The recent approval of a program to provide direct, and exclusive, primary-care physician access for New Jersey’s estimated 560,000 public employees by the State Health Benefits Program Plan Design Committee, means as many as 560 primary-care physicians will only treat state employees within the next few years. If you live in the Garden State, it could be your primary-care physician.

The plan pays a primary-care physician $60 to $125 per patient per month to treat up to 1,000 state employees exclusively. Average primary-care physician compensation is closer to $20 per patient per month and the average number of patients they manage is 2,000.

Nonetheless, considering that New Jersey’s primary-care physicians are among the lowest compensated in the country according to CMS, doubling their compensation for half the work actually makes sense. Primary-care doctors are principally responsible for treating chronic diseases such as diabetes, heart, lung and kidney diseases and effective treatment requires resources. Seventy four cents of every healthcare dollar spent in the U.S. for non-Medicare patients is related to chronic disease, according to CMS.

The good judgment stops there, however.

Despite consultations and pleas to the contrary by the state’s top primary-care physicians and health experts, inexplicably, once the member enrolls and is assigned a dedicated primary-care physician, the member can still seek primary-care elsewhere, pay a co-pay, and the SHBP will pay that claim, double paying for that member’s primary care.   

The program is further flawed because, while providing the resources, it does not tie compensation to the use of analytical tools to identify the sickest patients, patients at risk of developing chronic disease and systems to identify and stratify risk, a method of care called population health management. Not having analytics to identify those specialists who are the most effective and efficient, which service providers provide the best value, and other analytics tools doom the plan to expensive and wasteful failure. 

Not only does the plan do nothing to control cost after a patient leaves the primary-care office, it’s generous fees to specialists and other healthcare providers virtually invites unfettered, medically unnecessary diagnostics, treatments, pharmaceuticals, medical and surgical procedures, hospitalizations and emergency room visits. Waste that can add tens of millions more to the taxpayers tab.

While making state employees a special class may be New Jersey politics as usual, ignoring the tools, incentives, or even consideration to manage the total cost of care, it is a profound insult to taxpayers. 

For the rest of us, health laws and policies that starve, constrict and minimize primary-care physicians’ ability to manage rampant chronic disease are a self-inflicted failure in New Jersey. New Jersey ranks near last the U.S. for per capita payments to primary care physicians, but, third in overall per capita physician costs. This is because your average primary-care physician does not have the time, information or resources to manage care properly, throwing the load onto much more expensive specialists. Many New Jersey specialists, especially surgeons, are paid anywhere from a hundred percent to a hundred times Medicare rates while primary-care physicians get a fraction.

The New Jersey Legislature needs to clean out this bloated, inefficient, and ineffective public employee healthcare benefits program. It also must pass common sense, clear and concise legislation to free our healthcare industry to upgrade and innovate for the rest of us, protecting all New Jersey residents starting with these three essentials:

1. Indemnify the public, their employers and insurers from having to pay any healthcare provider more than one and one half times’ Medicare except for cosmetic procedures;

2. Set primary-care provider reimbursement office visit minimums at Medicare rates to provide the resources to do their jobs properly; and,

3. Forgive or subsidize student loans for graduating primary-care physicians educated in New Jersey who will stay in New Jersey for at least five years.

And, every citizen needs to hold lawmakers to account as if their life depended on it.



Bellavia and Doulgeris are members of the National Physician’s Council for Healthcare Policy, a nonpartisan advisory council to the U.S. Congress and, respectively, Chairman and CEO of Osler Health, an advanced primary care based health care system caring for over 350,000 New Jersey residents.

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