FAIR Health Board Access Interview with Lawrence P. Casalino, MD, PhD

January 17, 2019

Lawrence P. Casalino, MD, PhD, observes the healthcare system from a unique vantage point that spans both theory and practice. Currently the Livingston Farrand Professor of Public Health and chief of the Division of Health Policy and Economics in the Department of Healthcare Policy and Research at Weill Cornell Medical College, Dr. Casalino is one of the few academic researchers in the United States who also has considerable private practice experience. He is the recipient of the prestigious Investigator Award in Health Policy Research from the Robert Wood Johnson Foundation and has published numerous articles in prominent peer-reviewed journals on topics centered around incentives for physicians and the organization of physician practices. Dr. Casalino spoke with FAIR Health Access about his research in the context of an evolving healthcare environment.

FAIR Health: What influenced your decision to pursue a career in medicine and, later, in healthcare research? To what extent did your experience as a family physician influence your research interests?

Lawrence P. Casalino: I majored in philosophy as an undergraduate, and then worked as a community organizer for the United Farm Workers union of Cesar Chavez and in the anti-Vietnam War movement, particularly with a group founded by Joan Baez. After several years as a community organizer, I realized that I wanted a career that would allow me to help people directly, one-on-one, and see the results of my work. That’s why I decided to pursue a career in medicine. I was in private practice as a physician for 20 years, and I enjoyed meeting a wide variety of people every day, getting to know them and helping them. In that sense, medicine is a very rewarding career. At the same time, I had always known that I wanted to pursue intellectual and policy-related work. After 11 or 12 years in medical practice, I cut my work hours from about 65 to 50 hours a week in order to pursue a Master of Public Health degree. Later I received a PhD from the University of California, Berkeley. My experience as a family physician has influenced my research interests a great deal; that’s obvious from the work I’ve done. Having worked as a physician in the community, I have a sense of the way physicians in this country think about issues.

FH: In 2010, you published an article titled “A Martian’s Prescription for Primary Care: Overhaul the Physician’s Workday.” Since that time the healthcare environment has evolved considerably, due in large part to the effects of the Affordable Care Act. How might today’s prescription for primary care compare with that of 2010? How might the physician’s workday evolve to better engage patients?

LPC: In my first year of practice in 1980, it quickly became obvious to me that if my medical assistant and I were paid to speak on the phone with patients, we could probably take care of many patients a day quite effectively—much more than we could if we conducted only face-to-face visits. As a result, I spent quite a lot of time with patients on the phone. The patients loved it: They didn’t have to take time off from work or spend half a day sitting in the waiting room. Of course, I was not paid for those calls with patients, and I rarely got home before nine o’clock at night, in part because of the time I spent on the phone.

Most reasons for visiting primary care physicians actually do not require face-to-face visits. This was the point I made in the article: We need to go back to the drawing board and think about primary care as a Martian would. Physicians are highly trained and they are expensive—are we really using their time wisely? What would be the best way to manage that time? Ideally, a physician’s day would include a mix of seeing patients face-to-face when necessary and using the telephone, email or video to communicate with them otherwise.

Physicians today are seeing just as many patients as they were before, if not more. They’re dealing with all kinds of hassles with electronic medical records, and then—if they’re good physicians—they’re also spending time with their patients on the phone and by email. Still, the individual physician is not paid for the additional work of communicating with patients outside of in-person visits. I think that’s one reason so many physicians, especially primary care physicians, report being unhappy and burned out. Although the healthcare environment is becoming more favorable to non-visit communication between physicians and patients, we still have a long way to go.

FH: As physician practice consolidation continues, small physician practices are becoming increasingly rare. What challenges do both small and large practices face with respect to delivering high-value care to patients? How does the organization of a practice affect patient care and outcomes? What is the future of small and solo physician practices?

LPC: About 35 percent of physicians in the United States are in small practices, but that number is decreasing. I suspect that this trend will continue because most physicians who complete their training nowadays don’t want to go into a small practice. They want an easier lifestyle, they want more regular hours, they want coverage for calls and they want someone else to handle the business aspect of running a practice. It isn’t like the old days when a physician would finish training and then buy a practice from another doctor; most people coming out of medical training want to work for large organizations.

Physicians are selling their practices to hospitals, health insurers and even private equity companies; our first research on private equity has just been published. There are actually very few large, independent medical groups left in the country. In the changing healthcare environment, large practice size confers certain advantages, such as the ability to handle administrative issues more efficiently. Large practice size also helps when investing in systematic processes that improve patient care. At the same time, much of the advantage that comes with being a large practice is negotiating leverage: The larger the practice, the higher the rates negotiated with health insurance plans. Of course, health plans also are merging and acquiring other health plans so that they can have leverage when negotiating with providers. This trend also speeds up the disappearance of small practices, which lack the leverage to negotiate payments with payors.

According to our research and that of others, however, it looks like small practices and independent physician practices generally do as well as or better than, in terms of quality and cost, large practices and hospital-run practices; large practices seem to raise prices and costs without necessarily improving quality. There isn’t a great deal of research evidence to date, but what there is mainly goes counter to the usual assumption that larger provider organizations are better than physician-owned practices. Certainly there are many outstanding large organizations, but it’s not clear that, on average, large provider organizations as a whole provide good value.

FH: What are the characteristics of delivery and payment models that successfully promote value-based care? How do you think accountable care organizations (ACOs) and patient-centered medical homes are faring compared to the capitated models of the 1990s?

LPC: The capitated models of the 1990s were unsuccessful for the most part—with some notable exceptions, particularly in California—but the new models are more carefully structured, have better data available to them and may fare better. The holy grail would be to give a provider organization—and it would have to be fairly large to do this effectively—a projection of what it would cost to take care of a population of patients for a year. The organization would have the go-ahead to spend the money in whatever way it thought best. For example, if it were determined that a patient with congestive heart failure could avoid a hospital admission during the hot summer by getting an air conditioner, then the organization would spend the money on that. If, at the end of the year, the organization found that it had spent less than the projected amount, and all kinds of risk adjustments were done, the providers at the organization would keep some of those savings. The ACO models of today are moving cautiously in that direction. They don’t yet offer strong enough incentives, or cover a large enough percentage of patients, for provider organizations to drastically change what they’re doing, and that’s why, for example, physicians still have to see as many patients as possible face-to-face.

The idea of patient-centered medical homes is good, but the evidence for how well they work is mixed. When it comes to implementation, there’s a risk that becoming certified as a patient-centered medical home can be an exercise in checking off boxes and not really improving quality for patients.

Value-based programs carry the risk of rewarding physicians and hospitals that avoid patients who are likely to lower their scores; this can increase healthcare disparities. Currently, risk adjustment is based only on clinical and demographic factors, but there have been calls for socioeconomic factors to be incorporated in order to prevent healthcare disparities.

FH: FAIR Health has continued to lead as a source of independent and objective price and utilization information. How are claims data valuable in addressing the system’s current challenges? Looking to the future, how would you predict FAIR Health’s role will evolve?

LPC: I’m excited to be on the board of an independent organization that provides objective price and utilization information. FAIR Health’s growth has been impressive—it seems that hardly a week goes by that we, the Board of Directors, don’t get notice of yet another contract that FAIR Health has signed. Although I’m still very new, the more I learn about what FAIR Health is doing, the more impressed I become.

The claims data are extremely valuable and they position FAIR Health to do many wonderful things. FAIR Health already has published a number of interesting reports. FAIR Health data are so striking that they’ll also go a long way toward informing out-of-network pricing practices and policy making at the federal and state levels. Some of that already is happening. Facilitating greater use of the data for research is another area in which FAIR Health’s role will grow. This research can ultimately affect policy at a high level.