An optional pilot program to provide lower cost and higher quality care in the SEHBP

Healthcare costs in the United States are among the highest in the world, yet our healthcare outcomes fall below most other developed countries. New Jersey has healthcare costs that are among the highest in the nation. Shifting costs to employees, whether through increased premium sharing or higher co-payments, deductibles and co-insurance, does little to control the cost of healthcare while perpetuating the problem of fragmented services and substandard outcomes.

In most other countries, a primary care physician (PCP) is typically the first stop on a patient’s healthcare journey. Outside the U.S., PCPs outnumber specialists by a 2-to-1 margin. Here, the opposite is true. Under our fee-for-service payment model, PCPs are pressured to increase the number of patients they see in order to generate income, particularly in a time of declining reimbursements for primary care visits. These larger patient loads have led to excessive wait times to see a PCP, including both the time to get an appointment and time in the waiting room. In addition, the high-volume model dramatically reduces the face-to-face time patients have with their physician during the appointment. A 2012 study in the Annals of Family Medicine Journal estimated that “a primary care physician would spend 21.7 hours per day to provide all recommended acute, chronic, and preventive care for a panel of 2,500 patients.” Instead of delivering that recommended care, PCPs have become referral engines, quickly sending patients to specialists where care is much more expensive.

New Jersey has a unique opportunity to change how healthcare is delivered in the state. Its population is large and its geographic size is small, providing optimal conditions for changing the care delivery model. That change starts with PCPs, who need time to develop relationships with their patients and customize personal health plans that follow clinically recommended best practices. When the treatment needed cannot be provided by the PCP, the physician must be in a position to make high-value referrals based on transparency tools that include such things as provider quality and cost data.

Change to care delivery in New Jersey should start with an optional pilot program to transform selected PCP offices to Direct Primary Care Medical Homes (DPCMH). DPCMHs optimize the delivery of high quality, patient-centered ncare in the most cost effective settings. DPCMHs include the following key elements:

1. Increased patient access to primary care doctors, without out-of-pocket costs.

  • Guaranteed same day or next day urgent care appointments and direct 24/7 telephone and electronic access to a personal PCP or nurse practitioner working under the direction of the PCP.
  • Convenient DPCMH access in or near communities where employees and their dependents live and work.
  • Patient panels for participating DPCMH physicians that do not exceed 1,000 patients per physician, giving each physician time to provide the highest standards of care and care coordination.
  • No patient out-of-pocket cost sharing (no co-pays, co-insurance or deductibles)
    for DPCMH services for enrolled employees and dependents.

2. Changed payment model for PCPs: a salary-plus-incentive model that aligns financial incentives for physicians, patients and payers.

  • Compensation paid to DPCMH physicians will be based on components such as a defined salary, a portion of medical home per-member per-month (PMPM) revenues, compensation bonuses based on clinical outcomes, patient engagement, and patient satisfaction.
  • No fee-for-service reimbursement for a DPCMH or the PCPs employed there.
  • A DPCMH physician may not receive payment based directly on reduction in per-patient spending.
  • DPCMHs will be compensated for delivery, coordination and management of all comprehensive medical care services, with a PMPM fee for enrolled participants.
  • Care delivered outside of the DPCMH setting by specialists, hospitals and other outpatient service providers will be paid for in accordance with current fee-for-service or other applicable procedures.
  • DPCMH ownership and management shall be independent of hospitals or insurers.

3. Highest quality standards and patient satisfaction scores.

  • DPCMH physicians will be expected to achieve care quality standards equal to or higher than the most recent Healthcare Effectiveness Data and Information Set (HEDIS) commercial health maintenance organization (HMO) averages.
  • Participating DPCMHs will periodically assess patient satisfaction through patient surveys that include, at a minimum, the Net Promoter Score (NPS).
  • DPCMH will continuously monitor care quality in accordance with a standardized set of clinical outcome and process metrics. At a minimum, these metrics will monitor such things as patient engagement, disease prevention and chronic disease management.
  • DPCMHs will be accountable for fully transparent reporting of clinical outcomes metrics, practice standards, patient engagement, and patient satisfaction data in a secure setting, adhering to the highest standards of patient privacy, so advanced analytics can be applied to aggregated data to measure DPCMH success and drive continuous improvement in patient care.

4. Expanded scope of primary care.

  • The DPCMH will provide comprehensive primary care services, including preventive care, episodic sick care and basic urgent care, chronic disease management, medication management, basic procedures, health and wellness coaching, immunizations, basic prescription dispensing and laboratory draws and collections in a clinic site, as well as coordination of comprehensive specialist, hospital and outpatient services delivered, as medically appropriate, to enrolled participants.
  • The DPCMH will have direct responsibility for delivering and coordinating quality health care across all care settings, while preserving patient choice of providers.
  • Working with their patients, physicians will develop customized personal health plans designed to promote patient adherence to clinically-recommended and evidence-based protocols for disease prevention and management, meet individual patient health needs and reflect patients’ individual lifestyle preferences.
  • DPCMH health information technology systems will enable secure electronic medical record keeping; user-friendly patient access to personal medical records; population health management tools including a disease registry, clinical performance and outcomes reporting; secure patient-provider electronic mail communications; online scheduling of appointments; and patient access to health education resources.

5. Referrals based on high quality and cost-efficient providers.

  • DPCMH will offer each enrollee choice of PCPs who will be responsible for coordinating patient care across all care settings, overseeing transitions in care between settings and minimizing the risk of gaps in care for their patients.
  • The DPCMH will develop and continuously update a transparent preferred referral network of high-value specialists, hospitals and other service providers. Selection of high-value providers will be based on transparent quality and cost data, patient satisfaction data, and measures of secondary and tertiary provider willingness and ability to coordinate care with the patient’s primary care provid er when such referrals are medically appropriate or elected by the patient.
  • DPCMHs will ensure that protocols between primary care providers and high-value secondary and tertiary providers in order to coordinate care and ensure patients return to care provided by their PCPs as soon as clinically appropriate.
  • DPCMH physicians will not restrict patient choice of providers or limit access to providers to which patients otherwise have accesses.


New Jersey can deliver high-quality evidence-based healthcare while at the same time substantially reducing overall costs. With the large number of participants in the School Employees’ Health Benefits Program (SEHBP), it is an ideal program to launch pilot programs in three regions with potential total enrollment of up to 60,000 covered individuals. Eligibility for the pilot program will be determined by the Design Committee and is not expected to include Medicare Retirees. These pilots would be overseen by the Design Committee, with the goal of improving care quality, making access to care more convenient, and increasing patient satisfaction, while reducing the overall cost of healthcare for New Jersey and its school employees.

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