How primary care will play a central role with health care reform

by Jeffrey L. Cohen

Healthcare reform used to imply just regulatory change. As time marches on, it also implies market change. Most pundits agree that, whatever happens to the healthcare reform law, whether or not it is found to be unconstitutional, the healthcare business community is unleashed. Change is afoot!

If you follow my nahsaying on the issue, then you know I believe the expectations regarding ACOs are overblown and unrealistic. Martians will not land here en masse, although there may be an occasional stow away on a NASA craft. Put another way, as some others have said, ACOs are like unicorns—magical, mythical beasts that no one has ever seen. I don’t expect many to come prancing around in Florida, at least not South Florida, anytime soon.

Regardless of how you define it, and regardless of what the ACO regs (expected out by the end of March, 2011) say, one thing must be accepted: there is a strong movement in the public and private sector to (1) control and reduce healthcare costs, while (2) improving quality. And ANYTHING that can do that will have a strong spot on the chess board, whether you call it an “ACO,” and “Patient-centered medical home” or a “tomato.”

To be sure, the healthcare marketplace has been shaking and rattling for many years. The last time the industry shook anything like this was in the 90s, with the advent of such things as networks, IPAs, fully capitated care centers, PHOs and community healthcare purchasing alliances (CHPAs). As most know, there were two things missing from that evolutionary bump: (1) the requirement of quality metrics, and (2) tying compensation to those metrics. The healthcare reform law has both those features and they are likely to stick, even if the law vanishes under legal challenge.

A third and very important thing to notice about the 90s is that nearly all the integration activity (e.g. PPMs, networks, IPAs, hospital acquisitions) was in the area of specialty medical services, not primary care. Only the highest grossing medical specialties were sought after. And that hasn’t changed much! The integration activity today continues to be in specialty areas like orthopedics, OB/GYN, dermatology and the like. Even hospital integration activity involves specialty services to feed their hospital based services (e.g. cardiology)! What appears to be going on is simply this: stakeholders jockeying for the best defensive position. Integration appears to be largely designed to develop market share and contracting leverage. Primary care is largely being left out, and yet it is clear to most think tankers that it must take center stage in order to reduce costs and improve quality! Most of the market activity is based on short-sighted economic fears rather than a far-reaching commitment to the above mentioned core objectives. Simply put, it’s tantamount to putting one’s head directly in the sand.

So the question now, assuming that cost and quality will continue to be the leverage points, is how best to deliver care in a way that is extremely cost effective and which clearly demonstrates quality outcomes. And at least one important part of the answer seems obvious: primary care must take center stage. If we look behind the Wizard’s curtain in the regulatory and market changes in healthcare, what we would see is not some bald guy in a green suit. And it won’t be a hospital CEO who measures profitability by patient census. Nope. We’d see a primary care physician. While integration and growth can be a nice and important short term strategy, without primary care, the long term goal of cost reduction and quality enhancement is unlikely. In the future, only those healthcare businesses with a strong primary care component will be best situated to lead and flourish amidst the change policy makers and the business community seem committed to.

How? Any way you want! Regional primary care IPAs? Good. Large integrated primary care practices? Good. Specialist groups merging with primary care practices? Good. Hospitals employing primary care physicians? Good (for the hospital). Whereas the 90s really ushered in financial opportunity for a small group of entrepreneurial physicians, today’s tie in with quality indicators creates a huge opportunity for physicians to not only adapt, but also to thrive.

Jeffrey L. Cohen provides legal counsel for the Florida Medical Association, and can be reached at The Florida Healthcare Law Firm.

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