How Can Practices Stay on the Winning Side of Payment Transformation?

Updated on April 1, 2022
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By Dr. Christopher Crow, CEO & Co-Founder, Catalyst Health Group

Talk to a roomful of primary care physicians (PCP) about the need to reduce burnout and burden in their profession, and you’ll see near-universal agreement. Float the idea that this sort of transformation requires a fundamental shift in how they think about payment, and the tone of the room grows a bit more tense.

Intellectually—and financially—many physicians recognize that the current fee-for-service (FFS) model is unsustainable. Declining reimbursement and higher demands for quality create a no-win situation for providers, who often burn the candle at both ends to keep their practices performing. At the same time, the disjointed rollout of alternate payment models has left some physicians skeptical of whether a viable path for transformation truly exists. These physicians may have first experienced capitated payment models with lower reimbursement commercial payers and a lack of support needed to prosper. They may have seen accountable care organization (ACO) or medical home models that left them feeling constrained on how care could be delivered.

It begs the question: What’s next? Especially when framed against the national mandate for value in healthcare, what practical and scalable solutions exist… and how do we get there from here?

Prospective payment models offer promise, with fixed, monthly fees for patient care and incentives tied to patient health and outcomes. Consider the tectonic change this could create in the physician and patient experience. Unencumbered by hitting daily targets for patient appointments or optimized coding, physicians could instead focus on delivering proactive, highly-coordinated care and longitudinal relationships that have been proven to significantly improve health outcomes. In turn, patients receive a better, more supportive care journey that’s focused on their comprehensive health.

Physicians who remain unconvinced about the transformative potential for prospective payment would benefit from considering how the market has responded to their most common concerns.

1. Fear of lost revenue

All providers fear how a different payment model might impact the bottom line. Providers who had used the fee-for-service model as a launching point to build additional in-house service lines might fear they have the most to lose. However, pathways toward a smooth transition to prospective payment exist, as evidenced by the clinical, operational, and financial gains seen in practices that care for Medicare Advantage patients, where payment occurs monthly. Practicing physician and Catalyst Health Network member Dr. Stephen Buksh appeared on a recent podcast and explained the difference he’s seen in his own practice, with the move away from a predominantly fee-for-service environment:

“We’re actually compensated better than we had been in the past to support the fact that we’re taking care of sicker people. And so it really changed the landscape, because it allowed us to practice as we do best, taking care of complicated people and feeling like weren’t stuck with decreased revenue because we really wanted to take care of folks,” said Buksh.

He continued: “There’s so much that goes into medical care besides seeing a patient in your office, finishing your note, prescribing the medications, going to the next patient. In that [fee-for-service] model, you’re rewarded by the number of patients you see, and ultimately in practices, people burn out because they feel like the only way to support their practices is to see more patients.”

2. Fear of change and increased administrative burden

Many successful practices have been built on the fee-for-service model, with physician leaders who have become experts in efficiently operating and delivering care under this framework. It’s no surprise, then, that these time-compressed physicians feel anxiety over the operational change management that comes with adopting a new care and payment model. Physicians may also fear the added time required to perform the coding and quality reporting needed for the prospective payment model, as well as having to navigate new technology systems and documentation processes. One key toward overcoming these barriers is to ensure that practices have a partner—external extensions of their own care teams—to serve as navigators, experts, and guides to reduce the risk of business disruption. Independent physicians can look to integrated provider networks to reduce turbulence from this process. For example, this kind of dedicated support can give practices access to technological support and data-driven insights on quality and patient outcomes that they might have lacked on their own. Tapping into team-based care management and coordination within these networks can also relieve operational burden to help physicians spend more of their available time caring for patients.

3. Fear of the unknown and the ability to meet conditions for success

Practices that know the perils and pitfalls of fee-for-service may have spent years turning themselves into well-oiled machines to track and keep tabs on contracts, rates, accounts receivable terms and the myriad of other factors that tie to their financial health. 

It may be difficult for these practices to place trust in a provider network whose success becomes intrinsically tied to each individual practice’s success. Partnering with the right provider network is crucial. By choosing a trusted partner that supports the financial sustainability of its member practices—as well as quality care delivery for comprehensive patient health—practices can feel confident that they’re working with like-minded peers who share an aligned vision of success. 

As with everything else in healthcare, there’s no easy answer, no magic wand to make everything better immediately. But we can take significant strides toward healthier, more financially sustainable futures for providers and patients alike. All of that is available to us if we can tackle the persistent, addressable fears head-on and embrace the real possibilities that exist.

Dr. Christopher Crow is CEO & Co-Founder of Catalyst Health Group, a technology-enabled healthcare services firm that powers primary care to be the difference-maker in people’s lives that it was always meant to be.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.