Financing Primary Care – The Best of Times

1. Financing Primary Care – The Best of Times The Patient-Centered Medical Home Summit Washington, D.C. October 17, 2008 Roger C. Merrill, M.D., Chief Medical Officer

2. Agenda • The Value Proposition: health conveyed per dollar spent • The Perdue Experience • NBGH Primary Care Work Group product • Caution: Do Not Enter the Weird Zone!

3. USA – Cost vs. “Product” There is a relationship between cost And health status improvement: Health Status

4. The solution? Chicken!!

5. The Perdue Experience • On-site primary clinics (called Wellness Centers) which serve as medical home • Visits are on the clock, minimal payroll-deducted co-pay, clinics operate during all production shifts. • Goal is health improvement in a longitudinal model

6. The Perdue Experience • Physician contracting in owned, direct networks. • This allows us to have efficient networks, yet establish PCP reimbursement at the highest level vs. other payers in each geographic area. • We want our docs to smile when a Perdue patient comes into the office. • We ask our PCPs to be Marcus Welby, managing each case whatever the outside service requirements.

7. The Perdue Experience

8. The NBGH Primary Care Work Group Conclusions • Increasing PCP reimbursement is an appropriate goal or tool. • 20% payment increase for primary care = 1% total increased Plan spend • Reimbursement changes must be overall cost neutral

9. The NBGH Primary Care Work Group Conclusions • This neutrality will be gained through more efficient use of expensive services, not via price concessions from facilities and specialists. • There must be a quid pro quo for any increase in payment

10. Caution: do not enter the Weird Zone! • In a time of primary care scarcity, setting a performance bar too high will be counterproductive. • What performance or outcome requirements do we set when new procedures, gadgets, or pharmaceuticals are introduced?

11. Caution: do not enter the Weird Zone! • Does a new stent have to demonstrate lower mortality? • Does a new imaging study prove value by reducing overall cost of a condition? • Does an operative intervention have to prove improved, measurable outcome for it to be covered under a medical plan?

12. Caution: do not enter the Weird Zone! • While we ideally should require such data before coverage is permitted, in fact we do not. • Then it is entirely inappropriate to demand a much higher bar for the most ethical, valuable, and patient-centered members of the medical community in their ministrations to our patients.

13. Agenda • The Value Proposition: health conveyed per dollar spent • The Perdue Experience • NBGH Primary Care Work Group product • Caution: Do Not Enter the Weird Zone!

14. Financing Primary Care – The Best of Times The Patient-Centered Medical Home Summit Washington, D.C. October 17, 2008 Roger C. Merrill, M.D., Chief Medical Officer