Increasing payments for ambulatory primary care visits may reduce costs overall

A simulation found that increasing the Medicare payment for ambulatory primary care visits by 10 percent could save Medicare money in the long run, according to a report by the Commonwealth Fund. 

For the simulation, The Commonwealth Fund examined what effects that the provision in the health reform law to increase Medicare fees for primary care ambulatory visits by 10 percent for five years starting in 2011 would have.  

The study found that the fee increase would increase primary care visits by 8.8 percent, and raise the overall cost of primary care visits by 17 percent.  However, the study also found that these increases would result in more than a sixfold annual return in lower Medicare costs for other services—mostly inpatient and postacute care. The net result would be a drop in Medicare costs of nearly 2 percent. 

The study concludes that under reasonable assumptions, promoting primary care by increasing fees can reduce Medicare costs in the long run. 

(Sources: AHA News Now, http://ahanews.com, April 9, 2012; The Commonwealth Fund, http://www.commonwealthfund.org, March 2012)