Industry Analysis Of Primary Care

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Industry Analysis: Primary Care

Introduction and Scope Expanding primary care has been placed at the forefront of meeting our nation’s goals of reducing costs, improving quality, and increasing access to care. There are currently many opportunities and challenges ahead for primary care providers. Whether the focus is on the individual, a population, or the health care system, access to primary care is associated with more efficiency, better preventive care, avoiding unnecessary care, improved costs, and lower mortality rates. Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) will insure an additional 32 million Americans, many of whom will be seeking out primary care. Furthermore, the PPACA is providing federal dollars for providers who are willing to make changes that will benefit the community as a whole. Now is the time for primary care providers to change for the better to ensure future sustainability in a volatile marketplace.
Free-standing primary care providers (PCP) are quickly being purchased by larger hospital systems to capture referrals and maintain a continuum of care. Merging with large organization gives these providers access to more resources and capital to do things that may not have been possible alone such as installing an electronic medical record system. Along with changing the way primary care is financed, we are going to have to change the way primary care is delivered. Shifting care responsibilities to lower ranked clinicians while focusing on preventive health and individual responsibility will play a large role in reducing costs and increasing quality.
Of the 624,434 physicians in the United States who spend the majority of their time in direct patient care, slightly less than one-third are specialists in primary care. Primary care physicians consist of family physicians and general practitioners, general internists, general pediatricians, and geriatricians. Of the nearly 956 million visits that Americans made to office-based physicians in 2008, 51.3% were to primary care physicians (Center for Health Statistics, 2010).

Economic/Political Environment To prepare the primary care workforce for the influx of new Medicaid-eligible patients, the ACA increases Medicaid reimbursements for evaluation and immunization services to 100 percent of Medicare reimbursement in 2013 and 2014. The provision was included because primary care physicians, including general internists, will be particularly affected by the Medicaid expansion since millions of new patients will enter the health care system and many will have complex health care needs. Primary care physicians are not required to participate in in any type of service that they wish not to, and many practices do not accept Medicaid patients because reimbursement rates are relatively low and the administrative barriers are significant.
Beyond the 2014 date, states are permitted to continue funding Medicaid primary care reimbursement rates at or above Medicare levels. Congress could reauthorize the program beyond 2014 but this would require new legislation and would increase the cost of the program. The Congressional Budget Office estimates that the provision will cost the federal government $4.9 billion from 2010-2014. State budgets are very tight which leaves little hope that these reimbursement rates will remain elevated into 2015. A major threat for PCP’s is to take on a multitude of new patients only to have their reimbursement rates cut by 15-40% within 2 years. As reimbursement becomes tighter over the next decade, those with quality outcomes will receive higher compensation providing an incentive to focus on health outcomes rather than practicing defensive medicine.
Technology
The sharing of information has been recognized as one of the most important factors in delivering quality healthcare. As the first step for a patient entering an accountable care organization, PCPs must be able to share
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