Compensation is rising for primary care doctors partly due to the rise in value-based payments. However, value based payments are yet to have much effect since the shortage of primary care doctors continues to challenge the market. In addition, it is still difficult to see the direct impact of value based payments in primary care since there is no widely-accepted proof of the value creation.
Despite longer training, it is a better investment to become a specialist and consequently the majority of U.S. medical school graduates have chosen that path. As a result however, the supply of primary care doctors has been reducing over the last 20 years because the structure of medicine made choosing primary care a bad decision mostly for economic reasons. Ironically, primary care doctors are strategically important in the evolving structure of U.S. medicine today. The average primary care doctor has about 2,500 patients in his/her panel and on average, their panel is worth $20 million of healthcare expenditure. The primary care doctor costs about $750,000 and so millions of dollars then flow to specialists, hospitals, imaging, and pharmaceuticals, which clearly shows how much primary care doctors can influence downstream spending.
Hospital systems are hiring more primary care doctors while payers and major plan sponsors are investing more in independent primary care models to balance the power of large health systems. All of these factors are driving up demand for primary care doctors and with current supply limited, salaries are going up. Salaries for nurse practitioners and physician’s assistants are rising fast as well since they can perform much of the same work as primary care doctors. While growing steadily, value-based primary care still needs to prove its value and further an improved payment formula is need to reward the right behavior.
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