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A recent New England Journal of Medicine article discusses Medicare’s new regulatory efforts to improve primary care physician compensation through updated coding and payment policies. The authors begin by emphasizing the importance of primary care:


“A recent report from the National Academies of Sciences, Engineering, and Medicine (NASEM) concluded that primary care is a common good and is foundational to the U.S. health system.”


The report further highlights that increased investment in primary care would enhance quality and reduce costs within the U.S. healthcare system.


However, as the article notes, investment in primary care has steadily declined for decades, mirroring the dwindling supply of primary care physicians. This declining investment has directly contributed to the severe shortage of primary care providers. The authors conclude:


“The need to bolster primary care…is clear. Improved compensation for primary care.”


While these insights are critical for shaping future U.S. healthcare policy, the solutions proposed by the authors are unlikely to succeed.


The Challenges of Coding and Administrative Burdens


One key factor that makes primary care undesirable—beyond inadequate compensation—is the overwhelming administrative burden tied to payment obligations. Primary care physicians often spend more time navigating the complex billing and coding system than they do seeing patients. Unfortunately, Medicare’s approach of introducing more complex codes to enhance payment exacerbates this issue rather than resolving it.


The authors of the article appear to overlook the realities of these administrative burdens.


For a typical primary care physician managing 2,500 patients, building trusting relationships—fundamental to effective primary care—requires time and meaningful conversations. However, the coding system actively discourages such patient-centered care. It focuses instead on documentation for reimbursement purposes, which undermines the very essence of primary care. Trust cannot be measured by codes, and compensating primary care physicians based on these codes is both ineffective and counterproductive.


A Flawed Funding Strategy


Medicare’s funding strategy is fundamentally flawed: it fuels systemic issues like fraud, prioritizes volume over quality, increases paperwork obligations and discourages the meaningful conversations essential for primary care.


A Better Path Forward


Rather than adding complexity through additional coding, Medicare should explore simple, non-coding solutions to improve primary care compensation and enhance physicians’ quality of life. These changes would allow primary care practitioners to focus on what matters most—building trusting relationships with their patients, as I discuss on my website.


More coding will not solve the challenges facing primary care. Instead, it will continue to harm the field, perpetuating the very issues it seeks to address.



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The Commonwealth Fund released a study comparing primary care in the United States to other industrialized countries. Primary care needs help. US healthcare needs help. Solving our problems in primary care will go a long way to fixing healthcare. The facts from the study are compelling:


Percent of Patients Seeing the Same PCP Greater Than 5 Years:

o   US 43%

o   Germany 71%


Percent of PCPs that Perform House Calls:

o   US 37%

o   UK 97%


Percent of PCPs that Offer After Hours Access to Patients:

o   US 45%

o   Germany 96%


Percent of Primary Care Practices that Offer Mental Health Services, too:

o   US 33%

o   Sweden/Netherlands 94%


The Commonwealth Fund study offers several recommendations for the US to improve Primary Care, most of which involve paying primary care physicians MORE and paying them differently.


Hopefully the new administration embraces fixing primary care.



CEO Andrew Witty issued United Healthcare's first official response to the recent outpouring of public criticism of the insurer's practices.


The gist of his comments focused on blaming hospitals and drug companies for the rising cost of healthcare. In one specific quote Witty states:"Fundamentally, healthcare costs more in the U.S. because the price of a single procedure, visit, or prescription is higher here than it is in other countries. […] The core fact is that price, more than utilization, drives system costs higher.”


Witty took an indirect shot at hospitals, saying there are “participants in the system who benefit” from higher prices even as others work to fix the problem. He said patients would benefit from cheaper sites of care, but that threatens revenue streams for organizations that depend on charging more for care!

 

That is a reference to longstanding efforts in Congress, fiercely opposed by hospitals, to equalize Medicare payment for certain services provided at hospital outpatient departments with those provided in physician offices.


These criticisms of hospitals illustrate Witty's fundamental misunderstanding of the health system's dependence on the flawed cross subsidization system - because it drives healthcare's problems. Witty's focus on hospital prices is misguided.


Hospital payments have little to do with prices. For example, Medicare and Medicaid account for 70-80 percent of hospital payments. Those payments are regulatory and have nothing to do with hospital prices. These government payments pay hospitals less than costs. The most recent American Hospital Association studies indicate that government payments only cover 80 percent of hospital costs. So private insurers do pay higher prices to cross subsidize these inadequate government payments. The bottom line is that hospital profits are very modest while United Health’s profits are robust and increasing.


In fact, United is exacerbating the cross-subsidization problem by paying hospitals less than Medicare for United Medicare patients.


The article also discusses the fact that United Healthcare’s medical loss ratio is increasing - which supposedly means United is making less profit. However, one way United increases the medical loss ratio is by acquiring physician practices. They make money off physician practices and use the cost of those practices to raise their medical loss ratio.


Finally, United asserts that their Medicare Advantage plans are good for consumers. The truth is Medicare advantage plans cost Medicare 108 percent of traditional Medicare - costing taxpayers billion. At the same time United aggressively limits patient choices for care and routinely denies coverage.


United Health’s defense of its operations leaves much to be desired.


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