According to Adam Smith, people make choices that serve their enlightened self-interest. Truthfully, people also make a lot choices that are unenlightened, but that’s a problem for another blog! Today, let’s examine the question of why an enlightened primary care physician (PCP) would choose to do wellness visits.
Well, like other businesses, PCPs need to do things that make more money…and wellness visits are the easiest path to making more money. How could that be - don’t doctors get paid for managing disease-care?
The answer is that in today’s (still) fee-for-service environment, wellness visits pay more than most non-complicated disease-care visits. In billing parlance, those are called a Level 3 visit with an established patient, also known as a follow-up. So when a practice has an open appointment slot, if could fill that with a routine Level 3 follow-up visit worth about $60, or it could fill that slot with an Annual Wellness Visit worth about $100. Filling the appointment with a follow-up visit has an opportunity cost of about $40. To surpass the value of an Annual Wellness Visit, a PCP would likely need to have a Level 5 visit, the highest level of complexity and payment (and therefore highly scrutinized by insurers).
But that’s not all.
Since medical practices mainly make money by taking care of disease, they leave openings in their appointment calendar so that people can come in with unforeseen problems. The problem is that one cannot know ahead of time how many problems will arise on any given day. Practice managers make a guess, and on most days practices end up with open slots that go unfilled. The door is open, the lights and heat/air conditioning are on, staff are there, all costing money and only the providers can do things to make money (i.e., see patients) - an opportunity that goes unused every time an appointment slot goes unfilled. Essentially, unfilled openings are a $0 visit, meaning that open slots have an opportunity cost of about $100. Boy, one needs to keep that to a minimum!!
And that’s still not all.
Because the Affordable Care Act seeks to encourage PCPs to do wellness visits, PCPs are allowed to do both a wellness visit AND a level 3 follow-up visit to be on the same day (usually, insurers only pay for one visit a day). So the most logical use of the practices appointment slots is to, once a year, schedule back-to-back wellness and follow-up visits for everyone who needs a routine follow-up (anyone with arthritis, hypertension, high cholesterol, diabetes, etc.).
How much does all of that add up to?
Well, if a practice got $40 more (by swapping a Level 3 follow-up for an Annual Wellness Visit), just once a day, 200 days a year, that would be $8000 a year (per PCP). And if also it filled one unused slot, just once a day, 200 days a year, that would be $20,000 a year (per PCP).
And you know, even STILL that’s not all.
People who are severely burdened with chronic conditions are far more likely to have social and economic disparities than people who are ‘apparently healthy’. And they’re less likely to be engaged in health promoting behaviors, like staying physically active. Indeed, the purpose of an Annual Wellness Visit is to create the business case for a patient and doctor to address some of these issues that are barriers to better health.
In fact, 85% of health outcomes are determined by social, behavioral and environmental factors in patients lives, which is why the Affordable Care Act pays more for a wellness visit than for a routine uncomplicated follow-up visit. Indeed, the purpose of the Annual Wellness Visit is for the PCP to help the patient begin to address issues that threaten their health, and find ways for patients to engage with resources in his or her community that can help them gain control over these risk factors.
Annual Wellness Visit may well be the best way for a PCP to improve the value of his or her health care services, since they address the underlying problems and help patients make better choices that promote health. In the not-distant future, pay-for-performance paradigms that try to promote value-based services will begin to reward PCPs who help patients in this way, and punish PCPs who don’t. How much reward or penalty will be attributable to wellness factors is not yet known, but by 2022 the limits will be a 9% bonus, or a 9% penalty, for all Medicare payments. So not long from now, almost 20% of a PCPs income is likely to be at stake.
So how much enlightenment is all of that?
$28,000 per PCP in opportunity costs right now, and something probably more like $50,000 per PCP per year when the new pay-for-performance schemes are in place.
I don’t know of any other system, besides our system at Sustainable Health, that is designed to help PCPs make it so easy to become so highly enlightened!