Hawai’i Primary Care Providers Say Payment Plan Burdens Providers, Hurts Patient: New Report


Survey Finds More Than Eight In Ten Primary Care Providers Would Not Recommend New Practitioner Come To Hawai’i As State Battles Physician Shortage Amid COVID-19 Crisis

WASHINGTON, DC. — A new report released today found that changes to primary care provider (PCP) payment model by the Hawaii Medical Service Association (HMSA) has restricted practitioners’ ability to deliver care and has imposed greater administrative burdens and financial strains. The report was produced by Aimed Alliance, a non-profit that works to protect and enhance the rights of health care consumers and providers.

These findings reveal significant risks in the Hawai’i health care system amid the coronavirus pandemic, as the state’s providers face a surge in patients and are working to control the spread of hundreds of COVID-19 cases across Hawai’i. Already dealing with concerns from the dwindling number of physicians on the islands, the outbreak of coronavirus cases upended Hawai’i’s health care system, forcing some providers to temporarily close their doors and leaving many to reassess the existing models for PCP payment. Others are subsisting on payments from HSMA alone.

As part of its “Māhie 2020” initiative, HMSA rolled out “Payment Transformation” in 2015, which would shift provider payments away from a traditional fee-for-service model and instead provide a capitated payment for each HMSA member attributed to each provider in efforts to transition to more value-based care.

The new report, Trouble in Paradise: Assessing the Outcomes of Payment Transformation in Hawai’i, presents the findings of a survey commissioned by Aimed Alliance to assess whether the goals of the Payment Transformation implemented under HMSA’s “Māhie 2020” initiative are being met. It is based on quantitative data analysis and follow-up interviews from 60 health care professionals in Hawai’i. Data for the survey was collected between late December 2019 through early January 2020 — prior to the widespread outbreak of COVID-19 in the United States.

“At a time when Hawai’i is relying heavily on and cannot afford to lose primary care providers, we found that the Payment Transformation is putting practitioners in the state in a difficult position,” said Stacey Worthy, counsel to Aimed Alliance. “Payment Transformation did not account for the unique demands of different practice areas within primary care, and the result is that providers are now forced to make difficult financial decisions when they should be focusing on their patients.”

“Practitioners across the islands have spoken loud and clear that they are feeling the strain from the Payment Transformation, and they need support now more than ever as they work tirelessly to protect Hawaiians from the coronavirus. We hope that HMSA listens to these concerns and explores ways it can support providers as they look to provide the best care for their patients.”

Aimed Alliance’s survey also found that:

  • A majority of PCPs (55 percent) somewhat or strongly disagree that Payment Transformation has enabled them to deliver higher quality of care.
  • Nearly 80 percent of surveyed PCPs felt that Payment Transformation has caused an increase in administrative tasks. Among those, a significant majority have had to work longer hours, receive support from their provider organization, or hire more staff.
  • More than 80 percent of Hawai’i providers feel that Payment Transformation has worsened the primary care physician shortage in Hawai’i.
  • Nearly 65 percent of surveyed PCPs report knowing a primary care practice that has closed because of Payment Transformation, particularly small and solo practitioners.
  • Nearly all (93 percent) surveyed PCPs believe that Payment Transformation needs to be improved.

Based on the findings of the report, Aimed Alliance recommends that HMSA considers blending the capitation model with fee-for-service payments to maximize the quality of patient care, as well as allowing providers to be paid using a fee-for-service model for the first two years of their practice to support new providers entering the field. Additionally, Aimed Alliance recommends that HMSA explore ways to reduce the amount of time that providers must spend on patient attribution tasks.

A full copy of the report can be found here.



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