Intrinsic to the PPO Serve model is a Value Contract between clinicians organised in one of the ICC™ we support and Medical Schemes. This contract replaces Fee for Service (FFS) with a new arrangement that promotes ‘continual healing relationships’.
The Value Contract is based on the aggregate of the needs of each individual patient enrolled and has rising upside rewards for reaching agreed quality and production targets. The result is that patients have long term relationships with teams of clinicians who work in a dynamic and organised structure.
- FFS leads to clinicians working alone and in purely reactive mode. They compete where they ought to cooperate. There are no rewards for prudent or proactive care, and team work is rare. Managed Care restrictions deprive clinicians of their autonomy and add cost and frustration.
- The crude capitation formulae currently used in local disease management programmes ignores both individual patient needs / complexity and could encourage providers to ‘cut corners’ in supplying necessary services rather than rewarding merit. No wonder that they’re controversial amongst clinicians. As a consequence, there aren’t many disease management programmes locally, and those available have been held back from realising their full potential.
A very useful blog post by one of the leading practitioners of the reform movement towards integrated and accountable care, Dr Rushika Fernandopulle, CEO Iora Health, motivates that Fee for Service (FFS) needs to be entirely replaced.
“Fee-for-service, the predominant physician payment scheme, has contributed to the continuing decline in the primary care workforce and the capacity to serve patients well”- because it causes task splitting i.e. inefficiency and over-servicing; it doesn’t support teamwork nor proactive care.
The Iora Health payment model is based on:
- Risk adjusted fee per patient
- Experience, quality or utilisation targets
- Shared savings from the managed reduction in downstream costs
It means no (managed care functions) codes, explanations of benefits or appeals. Instead teams take proactive responsibility for defined populations – keeping them well and out of trouble. There is also creativity in team mix. Different methods and types of interactions are promoted to meet patient’s need.
Progressive insurers who embrace the model become ‘sponsors’!
Patients love the relationship based care provided. Doctors and the team love the creative way they practice medicine.
Iora health believes primary care spend needs to double to at least 10% of total. In their formula, Iora Health centres get paid for looking after sicker patients using either an individual population risk adjuster tool or a simple formula that is 10% of the previous years total spend for the patient.
They hire clinicians who are intrinsically motivated to work hard and do the right thing, and pay then by a simple, fair salary.
“We are happy to be compared on our patient experience, clinical outcomes, and impact on downstream costs”