Funding primary care providers – the how, why and what for.

Richard De Abreu LourençoCHERE, UTS

Overview

The status quo Options for funding providers The right system for the right effect What patients think

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The Status Quo 3

ABS Health Survey, 2013

84% of Australians visit the GP

The Status Quo

Medicare funding• Transactional based funding, focused on the occasion

of service.• Historical models of (acute) care.• “One size fits all” in terms of physicians and patients.• Has achieved high coverage, and patient acceptance.

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Options for Funding Providers Provider payments need to:

• Reimburse activities performed (effort and reward).• Provide incentives to motivate desired activities (eg.

immunisation of children, diabetes care) Are some payment methods better at these than

others?

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Core Funding Elements 6

Fee-for-service:• Paid for services delivered (limits scope).• Payments based on the type of service, rather than

the type of patient. Salary:

• Employed/contracted to provide a service, but payment not necessarily linked to throughput.

Core Funding Elements 7

Capitation:• Funding linked to a pool of patients, not

services already provided.• Patients linked to specific providers.• Avoid “cream-skimming” - use of risk

rating to take account of patient type and service needs.

Hybrid systems.. 8

Blended payments:• Combine FFS/capitation/salary into the one system eg.

Episode of care payments, capitation with FFS carve outs.

• Potential to get the best out of each payment system.• Administratively challenging for payers, physicians,

patients.

Hybrid systems.. 9

Pay-for-performance:• Financial incentives to target desired activity.• Can be powerful, but challenging:

oProcess vs outcomeoAttributing observed behaviouroChoosing the right outcomesoMeasuring activity and outcomes

The impact of payment systems.. 10

Volume Quality Referral rate Time CostFFS Incentive for

high throughput

Unclear Disincentive to refer to other practitioners

Incentive to reduce time

with patients

Leads to higher costs for the

system

Salaries Potential to restrict

throughput

Unclear Promotes referrals and collaboration

Promotes increased time with patients

Leads to lower costs for the

system

Capitation Potential to restrict

throughput

Unclear Promotes referrals and collaboration

Promotes increased time with patients

Promotes cost containment

The impact of payment systems…

There are trade-offs in how the different payment systems impact on behaviour and outcomes.• Balance increased throughput and service

volume against system cost, collaboration and patient interaction.

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Possible options Offer more than one payment system within Medicare;

• eg. allow patients with chronic conditions or in rural/remote areas to opt into capitation systems.

Expand FFS to include new service types: e-services, remote monitoring etc.

Consider service re-distribution and coordination – up and downstream.

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What do patients think?

Surveyed 2,500 patients. Patients claim to be loyal:

• 89% usually go to the same practice.• 80% usually see the same GP.

However, 28% went to more than one practice over the last 12 months.

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What do patients think? 14

What were the reasons you went to more than one practice?

What do patients think?

71% of patients were bulk-billed, remainder had some co-payment.

One-third of patients reported not going to the GP when they needed to.

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What do patients think? 16

For those that didn’t go to the GP: what were the reasons you didn’t go?

What do patients think?

Patient feedback patients suggests capitation might meet with resistance by limiting choice.

Co-payments and added charges have the potential to reduce utilisation due to income effects.• This is problematic as they disproportionately affect lower

income groups and those with chronic health issues.

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Where to from here? Importing solutions is attractive (but ….):

• Concierge doctors; PCMH; personal health budgets. Need to take a considered approach:

• What is happening now – are we performing better than we think?

• Where do we want to be?• How do we get there – new technologies and a burgeoning

supply of health care providers.

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Disclosure

The research reported on this website is from REFinE, a Centre for Research Excellence under the Australian Primary Health Care Research Institute, which is supported by a grant from the Commonwealth of Australia as represented by the Department of Health and Ageing.

The information and opinions contained in it do not necessarily reflect the views or policy of the Australian Primary Health Care Research Institute or the Commonwealth of Australia (or the Department of Health and Ageing).

Graphics from PresenterMedia.

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