You Get What You Pay For

Author: Michael Wasserman MD

Originally published: Tuesday, May 5, 2015

It should not be surprising that how we pay for a service can drive how those services are delivered. With this in mind, the Centers for Medicare & Medicaid Services will focus some of their innovations grant funding through a national Health Care Payment Learning and Action Network. I have been fortunate over the last 25 years to experience a wide variety of physician payment techniques. One thing has become clear to me: You get what you pay for! If you pay doctors to see a lot of patients in one hour, they will. If you pay them to perform procedures, they will. On the other hand, if you were to pay doctors to spend time with patients and listen to their needs, I believe that they would.

The government continues to seek out complex payment methodologies, which often involve problematic incentives in order to improve the existing system. Therein lies the problem. I would propose that everyone has been overthinking the payment issue. How can I know this? Am I a physician complaining that I do not make enough money? Am I too lazy to learn how to code properly? Am I just another policy wonk with an opinion? Before we go any further, I think that it would be pertinent to present my credentials and experience.

I am a geriatrician. For the past 25 years, I have told my patients that if they are looking for a doctor who will (1) prescribe lots of medications, (2) send them to lots of specialists, (3) perform lots of tests and procedures, and (4) put them in the hospital at the drop of a hat, I am not their guy! Geriatricians focus on function and quality of life. We focus on what we can do for patients, rather than what we do to them.

When I completed my geriatric fellowship in 1989, I joined Kaiser Permanente in Southern California, because I believed that their model was the best to allow me to practice geriatrics without worrying about how I would be paid. In fact, we enjoyed some good success, developing an outpatient geriatric consultation clinic and developing a geriatrician-led hospital discharge planning process. Our area had some of the best hospital utilization results in the country at the time.

My next stop was with a geriatric medical management company called GeriMed of America. In the early 1990s, GeriMed worked with hospitals to take advantage of something called “cost-based reimbursement.” Basically, we used Medicare dollars to set up primary care geriatric outpatient clinics that used geriatricians, geriatric nurse practitioners, physician assistants, and social workers to provide an integrated coordinated care model to frail older adults. When our patients were hospitalized (far less often than the norm in the community), they actually cost the hospital less money and were discharged sooner than other patients. Of note, our physicians were salaried and not held to rigorous productivity standards. In 1997, the government ended this program, and most hospitals closed their senior health clinics.

The end of cost reimbursement did not stop GeriMed. We developed senior health clinics in central Florida and continued to operate our integrated coordinated care model successfully in partnership with Humana and Cigna for several years on a “full-risk” basis. The model was profitable, despite operating in areas where the Medicare payments were relatively low. Our physicians were salaried and were encouraged to provide a geriatric approach to care. In fact, in the mid-1990s, a group of geriatricians at GeriMed came up with a “philosophy of care” that described the geriatric approach very well:

Focus on function.
Focus on managing chronic disease(s) and developing chronic care treatment models.
Identify and manage psychological and social aspects of care.
Respect the patient’s dignity and autonomy.
Respect cultural and spiritual beliefs.
Be sensitive to the patient’s financial condition.
Promote wellness.
Listen and communicate effectively.
Take a patient-centered approach to care and a customer-focused approach to service.
Realistically promote optimism and hope.
Take a team approach to care.

In 2001, we founded Senior Care of Colorado. It was a primary care geriatric private practice that operated under the fee-for-service environment that is still available to most physicians today. However, we did it with a twist: We figured out how to crosswalk the fee-for-service payment methods available at the time to essentially pay our clinicians a salary in order to allow them to spend time caring for their patients.

GeriMed’s practice had plenty of data demonstrating that it cost the Medicare system less money than traditional practices providing care in its community. One of the core elements of our model was learning how to pay our clinicians based on the time that they spent with patients. While this might seem a novel approach, other experts in the field have suggested it. The idea of paying doctors for the time that they spend caring for patients makes sense on a variety of levels. First, it immediately changes the focus of the care model from billing to care. Second, it is not very easy to game this approach. I have heard people suggest that I might spend 8 hours with one patient under a time-based payment system. This makes absolutely no sense. From the perspective of job satisfaction, clinicians should naturally gravitate to spending the amount of time that they need to spend with each patient. We are professionals, after all.

It would be hard to seriously abuse a time-based payment system. There are only 24 hours in a day. Providers could not bill for more than 24 hours’ worth of services, which is possible to do using the present coding system. Furthermore, electronic health record systems will more easily allow for accurate documentation of the time spent caring for patients. It will be simple to note the times that you enter and leave the exam room, and the patient can be given this information. If they get a bill saying that you spent an hour with them but you only spent 15 minutes, then you have just been audited!

Medical practices presently spend a significant amount of time and energy ensuring accurate coding. Documentation follows the coding needs more than it follows the patient care needs. Would it not make more sense to allow clinicians to focus on caring for their patients, rather than focusing on meeting a set of coding requirements? The present system also engenders a lot of fear amongst health care providers. This fear often leads to undercoding, which leads to inadequate reimbursement. This pushes clinicians to try to see more patients in less time. The government also has to spend money to audit this relatively complex coding system. Why not save our tax dollars by simplifying the process?

I hope that the national Health Care Payment Learning and Action Network will receive innovations proposals that offer to test a time-based reimbursement model. It would be even better if this model is coordinated with a patient care-centric electronic health record. We are developing quality metrics in order to associate value with physician reimbursement. If it is our goal to get clinicians to focus on delivering quality care to their patients, let us also think about how we are paying them and try to develop a system that allows us to get what we pay for!