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U.S. Health Care Delivery: Outpatient & Primary Care Physician Payment Session 9.

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Presentation on theme: "U.S. Health Care Delivery: Outpatient & Primary Care Physician Payment Session 9."— Presentation transcript:

1 U.S. Health Care Delivery: Outpatient & Primary Care Physician Payment Session 9

2 Objectives Discuss outpatient care and its development Identify various outpatient care services and settings Learn about primary care and its domains Patient Centered Medical Home Physician Payment

3 What is Outpatient Care? Any health care service not requiring an overnight stay in an institution of health care delivery (e.g., hospital, nursing home, etc.) More precise term than ambulatory care, since patients do not always “ambulate” to receive care May still be offered in a hospital or nursing home

4 Outpatient Care’s History Previously independent of care provided in health care institutions Doctors saw patients in clinics or made home visits With growth and dominance of hospitals, outpatient care was concentrated around community hospitals Today, outpatient care is growing tremendously and delivered across a broad range of settings Increasing shift from acute to outpatient care Viewed by hospitals as an essential business segment

5 Some Outpatient Care Statistics In 2010: million outpatient visits to office- based physicians –22.8% of outpatient visits to family physicians –18.1% of outpatient visits to internal medicine –12.8% of outpatient visits to pediatrics –7.2% of outpatient visits to OB/GYN 86.8% of physician visits took place in metropolitan areas –3.3 visits per person in urban areas vs. 2.7 visits per person in rural areas

6 Today’s Outpatient Care Physicians still providing basic diagnostic care and minor treatments in physician offices Advanced outpatient care still centered around hospital-based facilities Growing number of nonhospital-based facilities offering ambulatory and outpatient care Intense competition between hospitals and community-based providers for outpatient medical services

7 Why the Shift to Outpatient Care? Reimbursement –Payers prefer outpatient care because it costs less –Prospective reimbursement increased demand for outpatient services as patients were discharged “quicker and sicker” –Hospitals developed outpatient services to offset decreased inpatient income –Growth of outpatient care to meet increased outpatient demand (e.g., home health)

8 Why the Shift to Outpatient Care? Technology –New diagnostic and treatment procedures –Less invasive surgical methods –Shorter acting anesthetics –Reduced recovery time, less trauma –Expansion of outpatient diagnostic, treatment, and surgical services as office-based physicians’ acquisition of technology is more feasible and cost-effective

9 Why the Shift to Outpatient Care? Utilization control factors –Payers have limited hospitalizations through authorization –Payers have sought to minimize length of stay Social factors –Patient preference for care in home or community-based settings, not institutions –Desire for greater independence

10 Primary care Surgery Home health care Urgent care Dental care Vision care Chiropractic care What are Outpatient Services?

11 Where Does Outpatient Care Take Place? Physician offices Hospitals Walk-in clinics Urgent care centers Ambulatory surgery centers Outpatient rehabilitation clinics Optometry centers Dental clinics Mobile health care units Telephone triage Home health care Hospice Adult day care Public health care Community health centers Free clinics

12 Physician Offices & Outpatient Care The backbone of ambulatory care and the vast majority of primary care services Limited examination and testing, short visits Shift from solo practices to group practices –Address environmental uncertainties –Compete with large health care organizations –No start-up costs, shared overhead expenses –Address complex bills and collections –Patient referral network –Negotiation leverage with managed care organizations –Shared coverage for personal time off –Attractive starting salaries, profit-sharing, benefits

13 Hospitals & Outpatient Care Safety net clinics for indigent & uninsured Key source of profit for hospitals Refer patients back to hospital for inpatient care Common types of outpatient services –Surgical – same day surgery –Home health care – post-acute care –Women’s health –Emergency care –Diagnostic services – imaging, lab –Therapy – physical, occupational, cardiac, etc. –Education, counseling, etc.

14 Freestanding Outpatient Facilities Walk-in clinics & urgent care centers –Primary care & urgent care without appointments on a nonroutine, episodic basis –Convenient locations, times, and services Surgicenters (ambulatory surgery centers) –Independent of hospitals, same-day services Outpatient rehabilitation clinics Imaging centers Optometry centers Dental clinics

15 Mobile Health Care Services Screening vans, mobile MRI units, etc. Transported to patients Efficient & convenient means to provide routine health services Advanced diagnostic services, screening exams, health education, health promotion Bring health care to small towns, rural communities, malls, fairgrounds

16 Public Health Centers, Community Health Centers & Free Clinics Public health –Well-baby care, venereal disease clinics, family planning services, outpatient mental health care Community health centers –Serve anyone seeking care in medically underserved areas –Primary care safety net Free clinics –Services provided at no charge –Clinics not supported by government agency –Services mainly delivered by trained volunteers

17 Home Health & Hospice Home health care –Nursing care, therapy, supplies, equipment, homemaker services brought to patients’ homes –Provides alternative to institutionalization, catering to patients’ desire for independence & comfort Hospice –Comprehensive care not based on location –Pain & symptom management, psychosocial & spiritual support for terminally ill

18 Additional Outpatient Settings Long-term care –Case management & adult day care Telephone triage Alternative medicine clinics –Homeopathy, herbal remedies, acupuncture, meditation, yoga exercises, etc. –Growing interest

19 Primary Care The conceptual foundation for outpatient care Not all outpatient care is primary care Central role in the health care system Distinguished from secondary & tertiary care Secondary care: short term, sporadic consultation from specialist, hospitalization, routine surgery, rehabilitation Tertiary care: complex, uncommon conditions, institution based, specialized, technology-driven, trauma care, burn treatment, neonatal intensive care, transplants, open-heart surgery

20 What is Primary Care? Point of entry Coordination of care Essential care Integrated care Accountability

21 Primary Care: Point of Entry Way to organize health care delivery The first contact a patient makes with the health care delivery system Primary care practitioners serve as “gatekeepers” to specialists and hospitals Protects from unnecessary procedures and overtreatment True primary care is community based Convenient, accessible, basic, routine, inexpensive

22 Primary Care: Coordination of Care Coordinates the delivery of health services across the health care continuum Primary care professionals advise & advocate Ensures continuity & comprehensiveness “Hub of the healthcare delivery system wheel” A role not fully appreciated in the U.S. Advantages when primary care physicians coordinate health care Better outcomes, satisfaction, expense control

23 Primary Care: Essential, Integrated, & Accountable Essential health care that optimizes population health Helps minimize disparities across population subgroups to promote equal access Comprehensive, coordinated, and continuous services that provide a seamless process Both clinicians and patients have accountability

24 Benefits of Primary Care Community-oriented primary care Partnership between providers & communities identifies and addresses community health problems, including vulnerability to social problems and disease Effective care & preventive care Preventive interventions best carried out in primary care Numerous studies indicate better health outcomes where primary care is emphasized

25 Benefits of Primary Care Lower rates of hospitalization Lower health care costs Lower rates of self-reported poor health Lower mortality rates Higher life expectancy

26 Patient Centered Medical Home Team based health care delivery model typically led by a physician that provides comprehensive and continuous medical care to patients with the goal of obtaining maximized health outcomes. Emphasize relationship with physician Financial rewards based on patient outcomes

27 PCMH Comprehensive Care – Team based – Prevention, wellness, acute and chronic care Patient Centered Care Coordination – Become the “shopper” for the patient

28 PCMH Accessible – Shorter wait times for urgent care – Enhanced in-person hours – 24 hour telephone or internet access Quality and Safety – Clinical decision support tools – Evidence-based medicine

29 Physician Payment

30 Physicians Slide about pay SpecialtyNational 6 yrs Practicing AverageMedian Starting Range Anesthesiology$360,000.00$265, Cardiac & Thoracic Surgery$522,875.00$360, Cardiology$402,000.00$272, Dermatology$365,450.00$234, Diagnostic Radiology – Interventional$469,800.00$335, Family Medicine$199,850.00$138, Gynecology & Obstetrics$279,750.00$200, Hematology & Medical Oncology$314,800.00$222, Hospitalist$210,950.00$165, Neonatology$275,400.00$196, Neurological Surgery$589,500.00$395, Neurology$237,000.00$190, Ophthalmology$248,000.00$210, Orthopedic Surgery$485,500.00$315, Plastic Surgery$382,000.00$273, Psychiatry$211,000.00$165, Trauma Surgery$400,000.00$298, Urology$400,000.00$250, Vascular Surgery$405,000.00$259,400.00

31 Physician Pay Wide range in incomes – Pediatricians, family practice and psychiatrists on the low end – Surgeon, cardiologists, radiologist on high end Physicians get paid more for “doing things” than for caring or thinking.

32 Practice Expenses Gross Revenues$440, % Private Insurance53% Medicare24% Medicaid12% Patient Paid11% Non-physician Wages (4 FTE per physician) 88,000 41% Office rent and expenses52,800 25% Medical Supplies17,600 8% Malpractice liability insurance22,000 10% Equipment8,800 4% Other Expenses25,800 12% Net Income225,00051% of gross Revenue

33 Physician Work The average physician worked an average of 57 hours per week Seeing 105 patients Giving 4 hours of uncompensated care Average charge per patient was about $100

34 How are physicians paid? Generally fee-for-service: about 89% of physician revenue comes from third party payment The exact formula for payment has evolved over the years

35 How are physicians paid? Usual, Customary, and Reasonable (UCR) – Initially the Blue Cross plans did this. When a physician submitted a bill, they asked: Above his/her median charge for the same service the previous year? (usual) Above the 75 th percentile of charge by all doctors in the area (customary) Or justifiably higher because of a patient’s complicating illness or another acceptable reason (reasonable)

36 How are physicians paid? Next was the development of fee schedules – A menu of prices for each service agreed upon in advance – Huge amount of numbers to keep track of and update from year to year

37 How are physicians paid? This led to the relative value scale – Give each service a point value – A common service (standard office visit) was given a value of 1, and all other services are given relative point values – Then each year decide a payment per point So if a point is paid $20, a physician providing a service that is worth 3.5 points gets paid (20*3.5=$70) – Only need to update the value per point each year

38 Medicare and Physician Payment In 1992 Resource-based relative value scale (RBRVS) – Calculated a point value for each service based on: Physician time Intensity of effort Practice costs Costs of advanced specialty training – The dollar value was $ in 2003 – It is $ in 2014

39 RBRVS The RBRVS is a list of physician services with a relative value unit (RVU) assigned to each service. The RVU is made up of three components: – Physician work (pw) -- the time spent, effort exerted and skills used – Practice expenses (pe) -- wages, salaries and fringe benefits, and other office expenses – Malpractice insurance (mi) – highly variable across specialties

40 RBRVS Physician work accounts for about 55% or total RVUs Practice expenses about 42% Malpractice insurance about 3% CMS Common Procedural Coding System – CPT-4 (4 th edition) About 7,500 CPT codes are paid under this system

41 CPT CodeDescriptionPwPe – Facility Pe-NonFacilityMiTotal Facility RVUs Total Nonfacility RVUs 99202Office or other outpatient visit, new, level $ $ Office or other outpatient visit, new, level $ $ Office or other outpatient visit, establish patient, level $ $ Office or other outpatient visit, establish patient, level $ $ Emergency department services, level na $67.68 na 99221Initial hospital care, per day, for the evaluation and management of a patient na $94.14 na 35501Bypass graft, with vein; common carotid- ipsilateral internal carotid na $ na 42800Biopsy of throat $ $ Mastoidectomy na $ na 70336Magnetic image, jaw joint – professional component 1.48na na12.32 $ Dallas Texas RVUs adjusted for geographic practices costs – 2012 and 100% Medicare payment rates.

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43 Sustainable Growth Rate In 1997 Medicaid switched to a “sustainable growth rate” when updating conversion factor – Not only control individual prices, but overall spending Each year, they establish a global budget based on total spending the previous year If total spending exceeds the budget, then the conversion factor will get cut the next year to make up the difference

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