In some respects, health care in the islands is the envy of the nation, as Hawaii is frequently ranked among the healthiest states. That’s due in large part to a 45-year-old state law — the Prepaid Health Care Act — that requires employers to provide subsidized insurance plans to anyone working as few as 20 hours a week. Federal law kicks in at 30 hours.

In other respects, though, Hawaii is no different from any other state in that projections for the cost and demand for health care are rising. Fast. In response, Hawaii Medical Service Association (HMSA) — the state’s largest health care insurer, controlling about 70% of the commercial market — conducted a 2016-17 pilot initiative through which it changed how it pays primary care physicians (PCPs).

In place of the conventional fee-for-service model, it offered “payment transformation,” a monthly per-patient flat-rate, along with extra money for the sickest patients and incentives for doctors to meet certain quality standards.

The prestigious Journal of the American Medical Association (JAMA) this month published a study based on data from the pilot year, in which HMSA partnered with 107 doctors on Oahu and Maui. Led by researchers tied to the University of Pennsylvania, the study noted “small improvements in quality and a reduction in PCP visits.”

For HMSA, which rightly views the current status of the American health care system as malfunctioning — increasing in price tag while decreasing in good outcomes — even a glimmer of validation that it’s on track toward something that better aligns payment with desired outcomes is encouraging.

As the insurer is now about midway through a full transition to the flat-fee model, with the move expected to wrap up in 2020-21, it’s clear that more scrutiny is needed. In addressing total cost of care, the study in JAMA found no significant difference in the total cost of care, and noted additional research should size up a larger-scale implementation.

Also, success will hinge on tailoring payment transformation to fit Hawaii’s unique health care needs, which includes contending with a growing shortage of doctors and sets of patients — aging baby boomers among them — poised to need more attentive care.

The flat-fee model is touted as an effort that more effectively links health care costs to value rather than volume. However, generally, the more patients a doctor has, the money he or she gets. The average monthly payment is $24 per patient.

For doctors in high-volume offices that employ care teams as well as technology and innovation to coordinate care for patients, the switch can be liberating, HMSA says. No longer looking to fee-for-services billings to make financial ends meet, those physicians can focus on the sicker patients while deferring routine care and paperwork to other qualified team members.

Conversely, the model could bring trouble to practices with lower patient counts that cannot afford to pay for a care team. The Hawaii Medical Association, which opposes the capitation approach, points out that, due to insurer-imposed payment caps, a single patient with an acute chronic disease could derail a small practice.

That’s particularly concerning given Hawaii’s seemingly never-ending effort to recruit doctors, many of whom presumably start with small practices. Observers say the state’s current doctor shortage is approaching 800, with primary care physicians, especially on neighbor islands, representing up to one-third of the gap.

Since the pilot’s launch, the new model has undergone evaluation based on a triple aim: patient quality, patient experience and the cost of care. This year the insurer added a much-needed fourth element, folding in a focus on provider satisfaction. HMSA and doctors must continue to team up in working toward health care that’s both more affordable and effective.