I have posted a number of notes relating to the declining number of primary care physicians employed by health systems (see, for example: PCP and Family Physician Wait Times increasing 50% in Many Markets). I believe that this may be due, in part, to the fact that these executives believe that PCPs generate less revenue per capita than specialist physicians (see: Net Revenue Generation for Hospitals on the Basis of Physician Speciality). Such a hiring strategy may be shortsighted given that, as stated in my blog note of July 25, PCPs are responsible for allocating about 90% of total hospital costs (see: PCPs Responsible for Allocating About 90% of Total Hospital Costs).
The value of PCPs to a health system needs to be assessed not only on the basis of revenue generation per capita but also on savings that can result from their decisions in the primary care environment. My prior belief that our health systems were underinvesting in PCPs was reinforced in a recent article (see: Health systems allocate just 5-10% of total spending on primary care, despite benefits) and below is an excerpt from it:
Health systems in the United States continue to underinvest in primary care, despite evidence that increased primary care spend can lead to lower emergency room and hospitalization costs, according to a new study. The first-of-its-kind analysis from the Patient-Centered Primary Care Collaborative examined the amount of money private and public payers are spending on primary care in 29 states--reflecting growing interest on the part of state lawmakers to measure and report this type of spending in an effort to keep health costs down. Whereas health systems in other industrialized nations invest an average of 14 percent of total spending on primary care, in the United States that number is just 5.6-10.2 percent, depending on whether one uses a narrow or broad definition.....The study also found that as primary care investment went up, emergency room visits, total hospitalizations, and hospitalizations for ambulatory care-sensitive conditions went down.
For me, it's obvious that the contribution of a physician to a health system should be based on both revenue generated and costs avoided by that physician. This is particularly relevant as we move from fee-for-service to value-based care (see: Provider Organizations Beginning to Compete on the Basis of Value-Based Care). Of course, there remains the dilemma of the scarcity of PCPs in the market who may not relish the "executive" role that will be assigned to them in the first tier of healthcare (see: The many benefits of strengthening the primary care workforce). In a few years, this issue may becomes moot as clinical decision support (CDS) software is more common and is assigned a more prominent role in managing patient referrals, lab/imaging orders, and hospital admissions in primary care settings.
Comments