The Physicians that Patients and Payers Now Covet the Most

February 27, 2014

Performance, not a physician's resume, is fast becoming the new gold standard for patients and payers alike.

Not many years ago, major medical center faculty snuffled at non-faculty primary-care physicians and specialists as the “working class” of medicine. That observation comes from decades working in hospitals around the country.

For them, it was all about having trained at elite medical schools and reimbursement amounts one could command from payers. Long waits for appointments, both in and out of the waiting room were, and still are, the price to be paid for an audience. Being accepted as a patient, however, could, and can be, a lifesaver for those with complex conditions eluding diagnosis.

Today, with the system turning to narrowed networks on the wheels of the Affordable Care Act (ACA) and its high deductibles, those physicians who can efficiently and effectively manage chronic disease patient populations are becoming the most valued by independent physician networks, patients, and payers.

Patient-Centered Medical Home (PCMH) primary-care practices that manage care teams from specialists to allied health, and control 100 percent of their patient’s health care cost by managing the continuum of care, are now at the center of the healthcare delivery system’s future. Traditional primary-care physicians, who only control about 5 percent of their patients’ cost, are tomorrow’s casualties.

The ACA is driving this transformation, not on purpose or because it works, but because it only spreads and shifts costs without reducing them. The ACAs’ bumbling execution of Healthcare.gov makes news, and fundamental errors such as putting Accountable Care Organizations in the hands of hospitals and hospital systems does real damage.

Hospitals, regardless of for or non-profit status, have to keep patient volume high to do well financially, and a successful ACO reduces admissions, outpatient procedures, and services far enough to cause them serious financial trouble. As a hospital operator, it makes sense to lock up the ACO sector to keep it from causing serious damage.

So, hospitals put on a show. I have spent enough time in the corner office to admit that I would have to do the same. But, my biggest threat would be the physician-owned ACO that is achieving double digit spending cuts and branching out to commercial and self-insured payers. Those savings translate to empty beds, ED departments, and outpatient centers.

All of that means that the real stars of today and tomorrow are those who make care teams the center of the healthcare delivery system, particularly those that organize care based upon value on the primary-care level.

Performance, not credentials, is the commodity of the day and into the foreseeable future. Together, they are a powerful combination.

The challenge is to bring physicians, hospitals, allied health providers, and supporting services into alignment with price transparency, disease team subsets; and a common, interactive, and interoperable platform for communication, referral, and coordination.

This takes resources, and community hospitals may make good partners because they provide better care and service at less risk and at a fraction of the price for the majority of patients whose hospitalization, inpatient, or outpatient care is necessary. They also may make willing partners because they are being beaten up, or eaten up, by major medical centers and larger competitors.

The community hospitals benefit from increased volume at higher acuity and everyone else benefits from a narrow network of trusted partners. In all, it is a recipe benefitting patients by achieving the triple aim of better outcomes and service at an optimal cost.

Primary care only controls about 5 percent of the spending. Networks like this control far more.

If you are controlling the spending, it makes sense to hitch one’s wagon to the biggest cost center in town. It is a good and sustainable business model where everyone wins.