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A Smarter Way to Pay for Primary Care

High-quality, readily available primary care is critical to keeping America healthy and productive. Yet the number of practicing primary care physicians is likely to decline sharply in coming years, as medical school graduates increasingly choose specialty fields.

Laying much of the blame on "dysfunctional payment systems that discourage proper delivery of primary care," a group of leading health policy experts propose replacing the current encounter-based system with a per-patient payment system—and offering new incentives for physicians to provide effective and efficient primary care.

Under the new payment model, described in the March issue of the Journal of General Internal Medicine, practices would receive monthly payments for each patient under their care, with adjustments made according to the patient's needs and risks. More than two-thirds of the payments would be designated to pay for multidisciplinary health care teams and for information systems to monitor safety and quality, including interoperable electronic health records. Fifteen to 25 percent of payments would be linked to performance in meeting benchmarks of cost-effectiveness, efficiency, health outcomes, and patient-centered care.

The creators of the model—Alan H. Goroll, M.D., of Massachusetts General Hospital, Robert Berenson, M.D., of the Urban Institute, Stephen C. Schoenbaum, M.D., of The Commonwealth Fund, and Laurence B. Gardner, M.D., of the University of Miami School of Medicine—maintain that paying physician practices to deliver coordinated, well-organized primary care is a good way to reduce the need for hospitalizations and other costly services and ensure a healthier and more productive workforce.

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