Jake’s Journey: Payment and Innovation Part V


Dr. Bob Crittenden is the Cambia Grove Executive in Residence Emeritus and brings a wealth of experience and knowledge as a practicing family physician and as a senior policy advisor. Dr. Bob’s blog series weaves learnings from his career while highlighting broader barriers to health care innovation and possible paths forward. Read more about Dr. Bob and his writings here.

In previous articles we have discussed how health care’s payment system interferes with innovation and care improvements. Our patient Jake has health issues that need management. These conditions intersect with Jake’s social determinants of health, non-medical factors potentially affecting his health and interfering with his care: namely depression, low income and unstable housing. He needs a broad range of services to do well. Many insurers and employers pay for a narrow range of health-adjacent services, but do not have a way to support many of the most effective treatments - addressing the root of the social determinants interfering with Jake’s treatment.  

The Problem:

Most payments in health care pay for standard treatment on a fee for service (FFS) basis for services provided directly by a doctor or nurse practitioner. The problem is that the most effective clinical care can include broader services delivered by a team that are not on the list of paid services. For Jake, he does well if a counselor checks on his mental health periodically, if the nurse ensures he is taking his medication and if the social worker supports his job training and hunt for a stable home (addressing various elements of what we refer to as the social determinants of health, SDOH). The doctor doesn’t need to sign off on these discussions – People in the clinic or community can help Jake improve his situation.

Again, the problem is that payment systems have yet to reliably embrace reimbursement for these social factors.

To have an effective team and best utilize each member’s skills, there needs to be a way to pay for these broader services. Some services not addressed in the FFS fee schedule are shown to greatly impact select groups’ outcomes: basics like food for a diabetic; transportation to care for an elderly rural resident; and supportive housing for a mentally and physically ill patient. While it is enticing to just add a new fee for service (FFS) code for an additional service, this small change requires changes at the national level and does not allow providers flexibility in addressing the broad range of issues facing our communities. One community may need more triage, another more beds for homeless, vulnerable people, and another case coordination, to prevent patients falling through the system’s cracks.  

Having funds locally that are fungible  and not closely tied to a charge code allow clinics to creatively address the problems they face as efficiently as possible. Whether all these services need to be paid for by the health system is a good question. Some services are important and need to be included in a clinical setting (e.g. information, case coordination, behavioral health), but, no matter how they are paid for, most communities need a broad range of health and community-based services, so outcomes are improved, and costs restrained. 

Innovation is difficult in a FFS environment. Many new innovations are not defined in a charge code. An example may be a community information exchange (CIE) that connects doctors, hospitals, housing providers, behavioral health provider and transportation among others. If adoption and payment for this innovation has no revenue stream, there will be resistance to adoption. Will it save me money and pay for itself? Or is it another unfunded change? If a clinic gets payments only for visits with a doctor, it is doubtful that this innovation will be adopted unless it creates a big cost savings – enough to overcome the disruption of adoption.  

The larger issue is that,

improvement in our health care system will require a payment system that rewards the overall improvement of Jake’s long term health - including unconventional medical services and social determinant aid.

The most successful changes will improve outcomes and decrease costs – or at least are cost neutral. 

Possible Solutions:

There is a lot of effort in many places to refocus our payment structures. Some employers and public purchasers are paying incentives and measuring outcomes to create change. Some are paying in ways that support primary care and enable appropriate investments in broader issues like transportation and food. There is a lot of resistance to these changes. Employers often do not want to change their payments and often do not see non-traditional services as their responsibility (though they often pay the cost). Health systems have been developed and thrive on the fee for service system. While many organizations understand that there is a benefit to changing the payment structure, there are problems with getting ahead of the curve and investing in an entirely different incentive system while still maintaining viability in the FFS system. There will be a tipping point – variable in different communities – but there is little doubt we will be seeing change. 

Next Steps

In the future, payment systems will change. Some communities are heavily invested in paying for improved quality with the expectation of cost restraints. Many are not moving quickly. Medicare has made some of the largest changes and is trying out different models of payment. These include value-based purchasing and incentive programs in end stage renal disease, hospital care, readmissions, hospital acquired conditions, skilled nursing facilities and home health. Many Medicaid programs are paying more for better outcomes with the expectation of overall lower costs. They may be enough to drive change in the broader health system…or not.

Cambia Grove has focused on payment through its Solutions Lab and has outlined ways to improve the care provided to our patients. This has been reinforced by the 5 Points of Health Care™ Conferences, Fireside Chats and Roundtable discussions. Please join us for an upcoming virtual event and check out what actions we are taking during this unprecedented time so that we can work together to transform the health care system.


About Dr. Bob Crittenden


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