As the Saying Goes.....

Several posts have popped up about the new study from Milbank Memorial Fund on the sorry state of Primary Care in the US. We've heard this music before, and I've been hearing it a lot as a member of the Technical Committee tasked by the State of Connecticut to come up with recommendations for the state's health care cost growth benchmark and the primary care spending target during the next five years.

And yet, the more time passes, the less things improve. It actually doesn't seem to matter that some states establish primary care spending targets because most of it is not controlled by them (Medicare is not bound by these targets) and what may be is not enforced.

But setting aside the impotence of the policies, the real question we should ask ourselves is whether we're looking at the right numbers. The short answer is no, with all due respect to the researchers that crunched the numbers. That's because the lens they're using is incredibly narrow and misses everything else.

Consider, for example, that in commercially insured plans, the total spent on urgent care visits and EDs is 6% or more (check out Stacey Richter 's podcast on the subject) , essentially what the researchers say is spent on "primary care". Except that they don't count those costs. They don't count many other costs that are for primary care, meaning for the treatment of routine preventive and sick care, all the things that family practices used to manage but don't anymore. They don't count them because those services are rendered by clinicians other than those in a primary care practice.

Widening the lens leads to a very different observation. In my work I crunch a lot of numbers and I also rely on number-crunching from actuarial teams that have access to very large datasets. Below is a table that summarizes the results of the analyses and some observations:

Considering that the per member per year total is $8,500, the first two lines yield over 17% of medical spend. That's a tad bit larger than 5%. Of course, what is directly controllable and directly impactable is subject to debate, but I stayed pretty tight on all this. What's indirectly impactable is also subject to debate, but note, for example, that one third of it comes from acute events such as upper respiratory infections, other infections, sprains, scrapes, abrasions, etc...basically routine sick care.

Ask yourself a simple question, and ask your colleagues, friends, and family members: when they last needed routine sick care, where did they get it? You'll find that most of them went to the local urgent care center or the ED. Some may have gotten lucky with their PCP because that PCP is a Directly-contracted PCP (a DPC) as opposed to a regular network PCP.

The point is that employers likely pay out close to 20% of total plan costs on primary care or primary care influenceable services, not 5%, and until we realize that most of what is actually spent is spent in the wrong places, the policy responses will be short sighted at best, misdirected more likely.

Those of you familiar with this series won't be surprised with my policy observation: It's the Incentives, Stupid!

Paying PCPs more for each service will not solve the problem. But giving them the opportunity to earn substantially more than they do now by being accountable for one fifth of plan costs certainly will. Consider this simple math: if a primary care practice reduced the total impactable/influenceable costs by a full 5% they would double their revenue per patient. But more importantly the care received by the patients would be substantially better.

Yes, it requires a lot of changes in how PCP practices are organized, but form follows function and function follows incentives. And if you doubt the wisdom of that statement, why do you think urgent care centers are popping up everywhere? People want care, health plans pay for it, urgent care centers can take care of the needs because they're open and have staff available.

Just talking about "advanced primary care" and setting standards for APCs won't change anything. Keeping the lens on just the small portion that PCPs bill won't change anything either. You have to pay them differently and hold them accountable for a lot more than inflating risk scores, giving out a flu shot, and an annual wellness visit.

There's a whole lot to see when you look beyond the light under the lamppost.