Value-based payment models: Doctors describe the disconnect between theory and practice

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Value-based programs have a triple aim: better care for patients, better health for populations and lower cost of health care, according to the U.S. Centers for Medicare & Medicaid Services (CMS).

By 2030, CMS has a goal of 100% of Traditional Medicare beneficiaries and a vast majority of Medicaid beneficiaries participating in accountable care relationships. There are plenty of patients. Taken together, Medicare and Medicaid enrollees are approaching 40% of the American population, depending on the measure, and there is always demand for health care. There is plenty of money, at least in theory. Medicare spending hit $1 trillion in 2023 or 21% of the nation’s total health care spend.

Yet, after years of experimenting with payment models, physicians have been slow to get on board.

“Less than half of practicing primary care physicians are signing up for these models, and that’s really important to address this participation issue because resources are being invested in these models,” said Ann S. O’Malley, M.D., M.P.H., senior fellow at Mathematica. “A lot of resources are being invested in trying to evaluate whether they work. But if we’re not getting the bulk of primary care practitioners to participate in the models, it’s hard to really give them a full evaluation and know how well they work and how to improve them going forward.”

O’Malley is coauthor of “Why Primary Care Practitioners Aren’t Joining Value-Based Payment Models: Reasons and Potential Solutions.” The Commonwealth Fund published that study, with other coauthors including Rumin Sarwar, M.S.P.H., Cindy Alvarez, M.P.H., and Eugene C. Rich, M.D., of Mathematica.

To learn more, they went to the source: a dozen primary care physicians, other clinicians and management experts. There were focus groups with 17 frontline primary care providers with no prior experience in value-based payment models.

Barriers to entry

The study reported, and O’Malley described, significant barriers to participating in value-based payment models. Like so much in health care, those barriers often involve money, people and documentation.

Financially, fee-for-service payment still dominates. Smaller, independent practices don’t have the resources to take the plunge into value-based payment models. Not enough commercial payers participate, so physicians must juggle multiple payment models for different patient groups. There is insufficient institutional support for primary care or changing financial incentives in health systems with hospitals and specialty care.

There are workforce burdens: not enough primary care physicians and other clinicians, not enough incentives to attract more, and not enough training in the models for the ones already serving patients.

Although there are not enough personnel, there are plenty of quality measures –– too many, physicians say. However, the criteria lack the nuance needed to log meaningful management of patients with multiple conditions, and no consistency exists across models and payers. Physicians must spend more time coding Hierarchical Condition Category (HCC) scores in electronic health records, which leaves less time with patients.

O’Malley spoke with Medical Economics about the findings. This transcript has been edited for length and clarity.

Ann S. O’Malley, M.D., M.P.H., senior fellow at Mathematica.

Medical Economics: What was the most surprising finding among the study’s results?

Ann S. O’Malley, M.D., M.P.H.: I was surprised at how open primary care practitioners, and physicians in particular, were to this concept of value-based payment models. They very frequently would say things like, “It’s a great idea; we’d love to see it happen, but it’s very tricky to implement.” I wasn’t expecting them to be as positive about these models as they were, and about their goals.

Medical Economics: There’s been a lot of public discourse about physician shortages, but what does that mean for primary care and value-based payment specifically?

O’Malley: The primary care practitioners in our study cited the ongoing primary care physician workforce shortage as a major barrier to their participating in these models. Primary care has been underfunded, and primary care docs are just on a hamster wheel, and they’re just fighting to stay afloat, to keep their practices alive. A big part of that is the effects of reimbursement and other stressors on people’s interest in going into primary care. We have, for a bunch of reasons, a primary care physician workforce shortage that is important, that is big in this country, in addition to a shortage of medical assistants and other staff that work as part of primary care practices. But because of that shortage, a lot of the primary care practitioners we talked to said they felt like they can’t really participate in some of these models because they don’t have enough staff to handle what’s being asked of them as primary care practitioners in the models. This is a contextual issue that isn’t the fault of these models. It’s just a fact in the United States that we don’t have enough physicians. There’s not enough support for primary care, and it’s really hard to field some of these models in a setting that is that hampered from a workforce perspective.

Medical Economics: At the risk of oversimplifying a summary, the study highlights insufficient money, staff and a heavy documentation burden. The issue brief did not discuss physician burnout specifically. Would you say that value-based care contributes to physician burnout?

O’Malley: No, I wouldn’t. I think the goals of value-based care are laudable. It’s the execution and the implementation that [are] particularly challenging. So I don’t think we should throw out the baby with the bathwater. [As] I said earlier, the primary care practitioners we talked to were quite enthusiastic about the goals of value-based care and value-based payment, but the devil is in the details, and implementing that effectively is very tricky and is going to take a lot of time. With every model that is rolled out, we learn more and more about how to do this. But it’s not the kind of thing that we can figure out overnight or where there’s a simple silver bullet.

Medical Economics: The federal government, through CMS, has been a leader in creating value-based payment models writ large. What are some ways to get more commercial payers to participate in value-based payment models?

O’Malley: It’s very tricky because each commercial payer competes with the other payers, and each wants to keep [their cards] closely held to their chest. What is their secret? What makes the way they administer their plan, the way they pay for care, the way they do their contracts, et cetera, something that makes them unique? Therefore, they’re not as open to sharing that information with other participants in these models or agreeing to align all their lines of business with the way Medicare would do something or CMS would like to see things done. One of the biggest challenges in a multipayer model is getting all the participants to align in a way that makes sense to all of them because they serve slightly [different] populations. If you’re serving a working-age population versus a more retired population, your populations are different [and] your needs are different, but it’s really tricky and hard for all the payers to get on the same page. I don’t have an answer to how to do that. Sorry. I will say that our participants felt that states and employers could do more. I mean, a lot of them are already doing a lot, and there are a lot of employer groups that are trying to work to push the payers to align more and to support primary care more. But that was one of the things that our participants suggested.

Medical Economics: The issue brief lists a number of possible solutions. Which ones would you like to discuss?

O’Malley: Sharing these frontline practitioners’ suggestions on how to overcome barriers and potential solutions can help inform future value-based payment efforts by various health plans. So to encourage participation in these federal and state primary care models, one of the things practitioners said they really value is up-front, prospective payments for their patients. Working in a fee-for-service world with very narrow margins makes it very hard, particularly for smaller and independent practices, to stay afloat. If they have a predictable source of up-front payments for their patient population, then they have a little more leeway to invest in their staff and their primary care workflows, and that can help them to do some of the things that these models are requiring of them, and they think that would improve the quality of care for their patients. They’d also like to see less emphasis on some of the quality metrics that they felt were overly simplistic, particularly for complex primary care patients.

Practitioners would like to see improvements in payment for primary care services –– not just a shift from fee-for-service toward more prospective payments, but just general removal of the distortion of payment for primary care compared [with] other types of health care. … Those primary care practitioners who were employed by large health systems … would like to see some of the resources that are going to these systems for models; some of them felt that the systems were doing a good job of transmitting those resources to the front line. Others were in systems where they feel maybe the systems weren’t doing as much as they could to ensure that the resources from these models were really being sent to the primary care front lines to beef up their ability to deliver good patient care, as well as the population health management that these models are requiring of them. So they’d like to see that resource flow down to the front lines.

In terms of the workforce and the challenges around the primary care physician workforce in particular, participants suggested expanding incentive programs for people to go into primary care, such as loan forgiveness for medical school debt for trainees [who] decide to pursue primary care careers. A couple of participants suggested free tuition to medical school for those who commit to going into primary care fields. And then several noted the importance of training and support for those who are already in primary care to learn how to navigate both this new value-based payment world as well as this concept [of], in addition to doing point-of-service care for the patient who’s in front of me, also thinking more largely about managing my population or panel of patients in a way that is prospective. Doing that outreach to people maybe who haven’t been in the office in a year or two, trying to get ahead of some of their chronic condition needs and be proactive and do some early management so that we can prevent exacerbation of their conditions and their symptoms and keep them out of the hospital, keep them out of the emergency department. Right now, the fee-for-service payment system doesn’t reward that as much as it could, and therefore [for] these models, which call on physicians to do more of this prospective population-based management, the primary care practitioners felt they needed more support to learn how to do that and how to balance that with the type of care that they have been trained to do to date, which has really been in a fee-for-service environment.