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ACP Policy Paper Calls for Physician Payment System to Consider Socioeconomic Factors That Affect Health Outcomes

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Value-based models are needed that advance and support high-value primary and comprehensive care and health equity

Aug. 12, 2022 (ACP) -- The American College of Physicians is urging federal officials to reform the physician payment system to better address socioeconomic factors, such as poverty and education, which deeply affect patient health.

The recommendations are included in a newly released report titled “Reforming Physician Payments to Achieve Greater Equity and Value in Health Care: A Position Paper of the American College of Physicians.”

As Dr. Ryan D. Mire, president of ACP, explains: “Socioeconomic factors such as age, zip code, transportation, income or education level, are clinically significant factors that influence and impact the quality and health outcomes of my patients. Yet, our current physician payment system is insufficient in its effort to mitigate these factors or work toward improving health equity.”

The policy paper, published in the July issue of the Annals of Internal Medicine, aims to provide a road map for improving the physician payment system. The ACP Medical Practice and Quality Committee, which spearheaded the report, launched its analysis in light of its charge to provide recommendations regarding the improvement of access, payment and other aspects of the health system, said Brian Outland, ACP director of regulatory affairs.

The committee found that flaws within the American health care and delivery payment system “often arise from a combination of interacting factors, including health care factors, social drivers of health, underserved patient populations and discrimination,” Outland said. “All too often, programs are inefficiently designed, care is unaffordable, reimbursements do not sufficiently support physicians and their clinical care teams, and outcomes can be disappointing.”

ACP appreciates the shift in payment models toward quality over quantity in health care, he said. “However, concern is growing that these programs have fallen far short of truly shifting payments away from a still-predominant fee-for-service model or moving the needle toward achieving greater equity in the delivery of health care,” Outland said.

Going forward, the policy paper states, “the approach of building a health care system that is smarter about how dollars are spent to make people healthier must shift to one with a clear intention of health equity. There is an urgent need for all care partners to collectively change how we approach payment for primary care services and move to prospective, value-based payment models while ensuring that the payments are structured in a way that truly advances and supports high-value primary and comprehensive care and health equity.”

The policy paper makes a number of recommendations:

  • Medicare and other payers should adopt population-based, prospective payment models for primary and comprehensive care that are structured and sufficient to ensure access to necessary care and address the needs of individuals who are experiencing health care disparities and inequities.
  • Research is needed on how to best measure the cost of caring for patients who are experiencing health care disparities. “There also needs to be further research and care interventions to address the needs of underserved populations affected by social drivers of health and that considers value-based interventions a critical vehicle for doing so,” Outland said. “However, in the interest of reducing the administrative burden related to data collection, ACP reiterates that payers should make every effort to minimize the burden of collecting this data to the maximum extent possible.”
  • Medicare should be modified to establish a mechanism for savings to be calculated across all aspects of the program and to allow these savings to be reinvested back into primary and preventive care and into social and public health services.
  • ACP cautions that investment in primary care must not be centered solely on achieving short-term cost savings, because primary care has broader societal benefit in improving population health. Associated savings will often be longitudinal and take place over many years.
  • The Secretary of Health and Human Services should be authorized to address inadequacies within the Medicare Quality Payment Program. This includes developing policies and financial approaches to ensure that the Quality Payment Program begins to address issues such as inequity, health care disparities and social drivers of health.
  • Delivery and payment systems must fully support physicians, other clinicians and health care facilities in offering all patients the ability to receive care when and where they need it in the most appropriate manner possible, whether via in-person visits, telehealth, audio only or other means, especially for those experiencing health care disparities and inequities.
  • Adequate funding should be made available to support the development of effective health information technology systems and communication mechanisms, including adequate broadband availability, to ensure that delivery and payment reforms are able to address the needs of all patient populations.
  • Federal and state policymakers and payers, health plans, health systems, private-sector investors and philanthropic institutions should develop and implement additional financing mechanisms beyond direct payment to clinicians and practices, such as grants and technical assistance, to support innovative approaches to address inequities, health care disparities and social drivers of health.
  • ACP emphasizes that incremental increases in physician payments themselves do not do enough to strengthen the foundation or help physicians and practices address the needs of populations facing inequities or other social drivers of health. Solutions such as prospective payments per patient per month, hybrid payment programs and additional remote care flexibility can help, as long as they are designed with intention and focus on health equity. Financial incentives must be aligned to achieve better patient outcomes and lower costs and to reduce inequities in health care.

What happens next? “These efforts will require support from federal and state policymakers and payers, health plans, health systems, private sector investors and philanthropic institutions to conduct and then disseminate insights from research and innovative payment and delivery approaches to address discrimination, health care disparities and social drivers of health,” Outland said.

ACP stands ready to guide policymakers as they work toward reform.

More Information

The policy paper, “Reforming Physician Payments to Achieve Greater Equity and Value in Health Care: A Position Paper of the American College of Physicians,” is available on the Annals of Internal Medicine website.

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Back to the August 12, 2022 issue of ACP Advocate