Blog | Strategic Partnerships, Mergers, and Acquisitions

Primary care providers are partnering with employers to form an optimal primary care delivery system

Blog | Strategic Partnerships, Mergers, and Acquisitions

Primary care providers are partnering with employers to form an optimal primary care delivery system

  • A new partnership between the American Academy of Family Physicians and the National Alliance of Healthcare Purchaser Coalition was highlighted in a July 15 Modern Healthcare article.
  • The partnership promotes a prospective payment system that supports advanced primary care, according to the article.
  • HFMA’s Katie Gilfillan shares insight from a recent conversation she had with Michael Thompson, the CEO of the National Alliance of Healthcare Purchaser Coalitions, about the impetus for this initiative.

A recent Modern Healthcare article highlights a new partnership between the American Academy of Family Physicians and the National Alliance of Healthcare Purchaser Coalitions to promote a more sustainable primary care model. The partnership promotes a prospective payment system that supports advanced primary care.

I recently spoke with Michael Thompson, the CEO of the National Alliance of Healthcare Purchaser Coalitions, about the impetus for this initiative and the perspective of employers and other purchasers of care on the need for a more robust and sustainable primary care model. 

Takeaway

The COVID-19 pandemic has disrupted primary care, and primary care providers’ dependency on fee-for-service (FFS) reimbursement for in-office visits has jeopardized the sustainability of many practices. However, this partnership which hopes to marry regional primary care practices directly with employers, promises a more sustainable primary care system and lower total cost for purchasers of care.

Thompson highlighted that much of the recent innovation in healthcare stems from providers who are effectively delivering a form of advanced primary care, such as Iora Health, Oak Street Health or Chen Med, which largely focus on the Medicare Advantage population. These organizations are able to tap into savings by successfully managing the cost of care of patients. They also  promote care that is patient-centric, wholistic and improves health.

More comprehensive primary care such as these organizations provide has been found to lower total cost, lower admissions and promote better medication compliance, as highlighted by Thompson. In addition, higher primary care investment is associated with better hospital outcomes and decreased emergency department visits.

And while primary care models that treat the total person are not new, the National Alliance reported the “secret sauce” in effective primary care includes the seven key attributes outlined in its recent report. The seven attributes include integrating behavioral health, longer patient visits and managing referrals toward high-value providers.

To accomplish delivering the more robust breadth of services in this model, more investment is needed to build the infrastructure and adequately reimburse physicians. As far as payment structure:

  • A National Alliance survey found a variety of approaches being used to support these models (e.g., capitation, shared savings, FFS plus add-on payments)
  • The AAFP advocates for a prospective, performance-based model

The partnership will focus on developing regional linkages and educating providers and purchasers on the benefits of advanced primary care, where more investment upfront will save in downstream healthcare costs for covered employees.

However, this model does present challenges for hospital and health systems where the financial incentives are not aligned. If primary care practices are more comprehensive and patients are healthier, fewer referrals are made to specialists and hospital admissions are lower. And this misalignment is a barrier for widespread adoption. Though, with the recent COVID-19 pandemic, perhaps a new opportunity for a re-orientation of the healthcare system is upon us, to align hospitals, physician groups and purchasers of care along with payment models that support a more patient-centric system.

About the Author

Katie Gilfillan

is director, healthcare finance policy, physician and clinical practice for HFMA.

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