Dr. Jeremy Lam has treated some of the most vulnerable patients over 40 years as a Honolulu pediatrician, but retired eight months ago partially because of a new payment model that is causing anxiety among physicians.

On Saturday, pediatricians will be the last of the Hawaii Medical Service Association’s primary care doctors to undergo a change by which they will be paid a fixed monthly rate per patient in a practice instead of being reimbursed for each procedure or patient visit.

“For a patient with special needs or patient who doesn’t come in, the doctor will get the same payment. (This) is not an incentive for anyone,” said Lam, 70, who intended to practice part time but ended up retiring early. “They have no incentive to go above and beyond and work with the families to see them. Many years ago we’d go in for all our patients. It makes it sometimes easier now for (doctors) to say, ‘Just go to the ER or urgent care,’ because a physician is not getting paid for seeing that patient after hours. It hurts the continuity of care because you have no monetary or other incentive to follow your patients closely.”

HMSA said the change is necessary to improve the health of its nearly 735,000 members. Nationally, the move to alternative payment models is an effort to improve the overall health of the population and contain rising medical costs. The payment model is meant to give doctors more time in the office with sicker patients while providing the flexibility to take care of others through alternative methods like email, phone calls and text messages.

But pediatricians argue that the same payment model for adults doesn’t fit children, particularly because young kids see the doctor more often in their first few years of life. Children’s doctors say face-to-face time is imperative to focus on prevention, including healthy lifestyles, counseling parents and immunizations. Under the new model, pediatricians estimate they will be paid an average of $24.94 per member per month.

“I can’t even get a plumber to come to my house for $24,” said Honolulu pediatrician Dr. Galen Chock. “The basis of payment transformation is that, ‘You know, doctors, you’re really seeing patients too often, so if we just pay you a fixed amount, you guys will figure out you don’t need to see them as often as you have in the past.’ Unfortunately for pediatrics, we have a lot of mandatory visits for newborns.”

Infants’ visits

In the first year of life, doctors see babies about 11 times, not including visits for unexpected illnesses, according to Chock. Under the new payment system, pediatricians would be reimbursed roughly $300 in the first year for a newborn versus about $1,000 in the current fee-for-service model, he said.

HMSA said 120 out of 125 — or 96 percent — of pediatricians who are part of a physicians organization have agreed to accept the flat rate. Ninety three percent — 531 of 572 — of primary care doctors who care for more than 90 percent of HMSA’s members will be paid that way starting next month.

“Caring for Hawaii’s keiki is essential to the program, and we realized early that pediatricians and doctors treating adults have distinctly different practices. That’s why we’ve worked closely with pediatricians and appreciate their two-year collaboration on payment transformation for keiki care,” Dr. Mark Mugiishi, HMSA’s chief medical officer, said in a statement. “Overall physician interest in payment transformation has increased steadily. In addition to better patient care, payment transformation can help doctors build a sustainable practice by growing the number of patients a physician cares for. This is good for the keiki, their families, and the overall health of Hawaii.”

Less incentive

Even with the high enrollment numbers, some physicians say they had little choice but to accept the new payment model. If they didn’t accept it, their payments from HMSA would be reduced, and they would see a substantial drop in revenue.

Aiea pediatrician Dr. Brent Tamamoto said doctors already are spread thin and that the new payment model lessens the incentive for providers to improve patient care and invest in new technologies and in-office procedures.

“It’s been pretty commonplace for me to stay late to see a patient who’s on their way in. I’m often late to dinner with my family and don’t go to functions, but we do it because we think it’s the right thing to do for our patients,” Tamamoto said. “It’s hard to continue doing that when you don’t feel it’s being compensated or it’s being rewarded. We’re doctors, and we would love to take care of even the most fragile, challenging patients, but we also have to keep one eye on the pulse of our practice.”

State Sen. Josh Green, an emergency room doctor on Hawaii island whose physicians group has been part of the new model since April 2016, said it has been working well, once providers got accustomed to it.

“Once people get used to it, they don’t even think about it anymore. They don’t even think about the old days of billing for each case,” he said. “The best part is that this has enabled us to focus on population health and prevention, things that we never got reimbursed for before. The downside is we’re still working out the glitches like attributing patients (to the right providers). Doctors who are worried are still focused on the day-to-day challenges. It’s natural for them to be worried, but it is a very strong model.”