I recently described the loathsome “relative value unit” (RVU) and its role in the decline in prestige and pay in primary care. The RVU is maintained and updated by a small panel of 31 physicians called the Specialty Society Relative Value Scale Update Committee (RUC). Twenty-seven of the 31 physicians are specialists, which is not at all representative of the physician workforce, given that primary care doctors comprise over one third of it.
Yet this small group wields enormous power by updating the relative value of each physician’s work. Their opinions inform Medicare’s payment schedules, which subsequently influence those of nearly all private insurers. Since specialists largely fill the panel, it is not surprising that, on average, procedures that specialists perform have higher relative value than the work primary care physicians do. It is equally unsurprising that, over the same 25-year period that this RVU system has been in place, we have also seen a marked decline in the number of physicians choosing to do primary care.
Many reformers have questioned the rationality of the current system. Princeton University economist Uwe Reinhardt wrote, “Surely there is something absurd, when a nation pays a primary care physician poorly relative to other specialists and then wrings its hands over a shortage of primary care physicians.” However, those who attempt to reform the RUC have consistently been met with the resistance of strongly entrenched interests. After all, there is $60 billion in Medicare money on the line and billions more in private insurance payments at stake. It does not seem that it will be easy to change the composition of the RUC anytime soon.
Fortunately for patients and primary care doctors, we do not have to wait for the RUC to change in order to change the way that physicians are paid. One of the less talked about elements of the Affordable Care Act is how it will likely lead to massive changes in the ways insurance companies and hospitals make money. Dr. Ezekiel Emmanuel, one of the chief architects of Obamacare, recently penned an article called “Insurance Companies as We Know Them Are About to Die (And here’s what’s going to replace them).” In it he writes that in the future hospitals will no longer receive money from insurance companies for procedures their physicians perform. Instead, hospitals will form accountable care organizations (ACOs), and act as both insurance company and hospital: much like Kaiser Permanente does today. Patients will sign up for an ACO on the health care exchange, and they will only see doctors and go to hospitals in the ACO network. While this may have a similar ring to the unpopular HMOs of the 1990s, there are many differences, most notably that the quality of care patients receive can be measured through now-ubiquitous electronic medical records.
Once this happens, hospitals no longer have the financial incentive to simply perform more procedures in order to make money. Instead, since the payer and hospital are part of the same organization, profit is driven by performing only those procedures that are required to keep the patient healthy. Obviously, keeping patients healthy and preventing illness has always been the main purview of primary care physicians. Therefore, in ACOs, the relative value of a primary care physician will be quite high. Patients who are kept healthy with high-quality primary care, and who require fewer ED visits, procedures, and hospitalizations will form the main revenue base for ACOs. And because most physicians in the ACO are salaried, the RUC panel, whose recommendations are based on the old fee-for-service payment system, may not have much impact on how much ACOs decide to pay their doctors.
The future is not far off. Hospitals are already forming ACOs and buying up primary care practices. Insurance companies are already buying ACOs. More physicians are working for salaries and primary care salaries are on the rise.
What does all of this have to do with medical students and their increasing interest in primary care? If you ask most medical students about the details of ICD-10 codes, RVUs, or DRGs and how these changing codes will affect their future salaries, they will look at you as if you are speaking a foreign language. However, if you ask medical students how the Affordable Care Act will change medicine, you will hear many informed opinions. Many medical students see that there is a surging demand for primary care physicians. They see new scholarships and loan forgiveness programs for primary care doctors. They see that while primary care physician pay is not soaring, it is starting to rise steadily. And they see that while health care is in a state of great flux, the changes that are happening are elevating the status of primary care doctors in order to keep patients healthy and prevent illness.
Perhaps it is too glib to say that medical students are simply starting to look at primary care because of money and prestige. Of course, there are a multitude of factors that an individual medical student considers when she picks her specialty — a great mentor, a significant life experience, a relative with a particular disease, a special academic interest. However, when looking over a panel of medical students, there is no doubt that there is a new buzz around primary care. Payment systems are changing to the benefit of primary care; our breadth of practice is broadening; and there are burgeoning opportunities for primary care doctors to become leaders in medicine. These are all great reasons for medical students to think that primary care is cool — again.
Anoop Raman is a family medicine resident who blogs at Primary Care Progress.