Cost Effectiveness of Health

The state of U.S. primary care: How new ways of thinking can spur meaningful improvement

Finances, data and technology will be key in efforts to bolster primary care for patients, providers and the healthcare system overall.

January 16, 2024 8:57 am

As healthcare stakeholders consider ways to fortify the nation’s primary care system, industry leaders recommend emphasizing several strategies and components — and not waiting to act.

“We’re close to midnight in many respects in thinking about how to urgently preserve and expand primary care in America,” Susan Dentzer, president and CEO of America’s Physician Groups and an HFMA contributing columnist, said in December during a presentation at the 2023 National Primary Care Transformation Summit.

About 29% of adults and 11% of children lacked access to a usual source of care in 2019, Dentzer said, referring to a 2023 report. In Medicare, only about 4% of total spending that year was on care offered by primary care physicians. The share was higher in commercial insurance but nonetheless was under 7% and had been falling in recent years.

Less than 8% of visits to primary care physicians take place under a fully capitated payment system, meaning opportunities to provide holistic care are limited.

“If they’re coding at all [during typical visits], they’re coding with primary-care-level codes,” Dentzer said. “That means, in essence, that the payment structure flowing through to primary care is not really supporting teams that offer whole-person care in the context of what we would think of as advanced primary care. … It truly takes that village of individuals to adequately care for a person and do more than churn people through offices in 12-minute visits.”

Such systemic shortcomings lead to deficits in the health of Americans, Dentzer noted, including recent reductions in life expectancy across the board and glaring disparities in that metric between racial groups.

As part of the four-day summit, prominent players in the U.S. healthcare system described some of the traits of a better primary care infrastructure.

A different way of operating

Amir Dan Rubin, who was CEO of the primary care company One Medical at the time of its 2022 acquisition by Amazon, said disenchantment with the current state of primary care is widespread among consumers, employers and providers.

One Medical bucked the trend, attaining high marks in net promoter score, patient retention and quality, Rubin said. Key features included same- and next-day appointment access and virtual care “within minutes.”

Reminiscent of a direct primary care model, the company’s $16 membership fee (now $9 for Amazon Prime members) provides on-demand video chats and asynchronous messaging, with no copays or deductibles — nothing to even put on a claim. In-person and formal remote visits are billed to insurance.

“A key part of the innovation here was the concept of membership and really thinking about the differentiation at its core — [which is] excellent access,” Rubin said.

A next phase in the company’s growth was a focus on distribution, namely by marketing to employers and ultimately securing contracts with more than 9,000 companies, which cover membership fees for employees and their dependents. The benefit was designed to be easy for employers to roll out, with One Medical slotting into standard insurance plans. Data show the company’s clients reduce their healthcare costs by as much as 45%, Rubin said.

With the distribution model established, One Medical sought to incorporate the caliber of technology that could provide low-friction access to consumers and decrease the burden of “desktop medicine” for clinicians. Rubin said natural language processing technology helped streamline the workflows of clinicians by diverting patients’ messages based on content (e.g., a message containing the word insurance would be rerouted to a member of the administrative team).

A sound business model

Rubin, who now leads a venture capital firm focused on healthcare innovation, also has had executive roles with Optum and large health systems such as Stanford Health Care, UCLA Health and Memorial Hermann.

For hospital systems, he said, a key question is: “How can one grow and finance this growth in primary care, which in general is not a high-dollar-per-service endeavor but is very high-value?”

One Medical chose to combine insurance payments with a membership fee, with the latter mechanism funding on-demand digital health.

“So, at the margin we wouldn’t have to charge people, and we could have unlimited digital access,” Rubin said.

Insurers generally pay One Medical on a fee-for-service basis but also have capitated contracts within a value-based care model focused on seniors. Among a 2017 cohort, Rubin said, One Medical reduced the medical expense ratio from 103% to 74% over the next five years thanks to features such as enhanced access for consumers and a salary-based compensation model for employed clinicians. The remaining share of payments can be invested in enhancing care, including by adding a home healthcare component for high-risk seniors.

The acquisition of Iora Health — about a year before One Medical itself was bought by Amazon — allowed One Medical to expand its addressable market by $700 billion between serving the Medicare Advantage population and participating in Medicare’s Direct Contracting accountable care organization model (which since has been modified and rebranded as ACO REACH).

“Economics are critically important as we think about these models,” Rubin said. “What are the economics to succeed in different populations, and what are the levers for expansion? How do we grow, and how do we finance expansion?”

Data as the foundation

George Halvorson, the retired CEO of Kaiser Permanente and Health Partners, among other organizations, said one of his core strategic tenets was to have “all the information about all of the patients available to all of the caregivers all of the time.”

“When you follow that approach and design everything so that all the data flows to a patient-centered database and then is available to the caregiver on a patient-specific basis, that is so much better in terms of your ability to deliver better care,” Halvorson said.

For example, Kaiser Permanente used aggregated data to deduce that mothers with uterine infections were far more likely to give birth to a child with childhood asthma. Comprehensive data also helped researchers debunk a theory about a link between vaccines and autism, instead identifying a higher risk if the father was older or the mother took antidepressant drugs during the pregnancy.

“Think about how much information you have to have to know that what I just said was true,” Halvorson said.

Vast databases of knowledge increasingly will be available to clinicians around the country because of AI engines such as ChatGPT, which will consolidate patient data from across vendors, he added.

Ensuring reliable and accessible information sources then becomes crucial. Halvorson predicts that organizations such as Mayo Clinic and Optum could play central roles.

“If you’re a primary care physician and you are looking at what appears to be relevant [information] from the new artificial intelligence algorithm and from that database, you should be able to get a second opinion,” Halvorson said. “And second opinions [are] a hugely useful, traditional, longstanding part of medical practice. And now we need a second opinion available in the electronic space.”

Exciting opportunities

In scientific research, the increasing understanding of epigenetics offers the potential to mitigate or counteract the impact of behavioral factors and the environment on people’s health. In combination with AI tools, the study of epigenetics will “give us some really powerful information that we can use to steer our lives and our health in very good and effective directions,” Halvorson said.

A technological framework must be implemented to support such findings: “We also need the FHIR system to work really well,” Halvorson said, referring to the Fast Healthcare Interoperability Resources standard for exchanging information between electronic health record (EHR) systems.

“Electronic medical records have to be in place everywhere — and they are — and the data from the electronic medical records has to be able to flow together.”

He said that’s happening at organizations such as Optum, which is working to create a consolidated care delivery database for access by its 60,000 physicians.

“All of the primary care doctors in the country are going to be impacted by what Optum does and what Epic does,” Halvorson said, adding that Cerner’s systems also are likely to be enhanced after its 2021 purchase by Oracle.

“The primary care physicians are going to see their world changing a lot,” he added. “But I think if we do this right, it will change for the better.”

With all the advanced tools and technology under development, Halvorson said, “We need someone credible, wise and caring in that loop to provide that level of counsel and expertise to the patient.”


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