Primary care in Rhode Island is facing an immediate and unprecedented crisis, and the gravity of the situation is not entirely understood. Across the state, patients are struggling to find primary care providers as practices close and physicians retire or leave the state. Over the past two years, the cracks in our system have deepened. Yet, there is a lack of awareness of the imminent collapse that could leave tens of thousands without essential healthcare.
Consider the case of VillageMD, a company that promised to revolutionize primary care by acquiring practices and leveraging value-based payment models like Medicare Advantage. It all looked promising at first – by managing a large patient population under risk-based contracts, they hoped to deliver better care while making primary care financially sustainable. However, when VillageMD sold its practices to Walgreens, the financial challenges quickly became apparent. In late 2023, Walgreens announced it would exit the Rhode Island market, leaving 40-50 primary care providers and their patients at risk.
What went largely unnoticed is that a crisis was narrowly averted when a physician from Massachusetts engineered an acquisition that kept those practices open. However, the underlying issue – inadequate reimbursement coupled with an unstable business model dependent on delayed payments from value- based contracts remains unresolved. The public saw little of this drama unfold, but the warning signs are clear: without systemic change, the primary care foundation in our state will crumble.
Adding to this crisis is the decline in funding for community health centers, which provide care for the state’s most vulnerable populations. Thundermist Health Center – serving 60,000 patients across Woonsocket, West Warwick, and South County – is facing severe financial distress. Thundermist plays a critical role, particularly in serving the LGBTQ community and those with limited access to health care. Yet its fate remains uncertain. If Thundermist or similar centers close, tens of thousands of Rhode Islanders will lose access to essential care, and the state’s primary care system cannot absorb those patients. With practices already overburdened and stretched thin, there aren’t enough providers to take on the influx of displaced patients, further compounding the access crisis.
When we look at the numbers, the problem is stark. The narrowly averted loss of the VillageMD practices and the potential loss of Thundermist‘s services could have affected nearly 120,000 patients. This, coupled with a broader trend of doctors retiring or leaving the state, has led to more patients reporting that they can no longer find a primary care provider. The inevitable conclusion is that our primary care system is collapsing.
The broader factors creating instability in primary care
Focus on value-based contracts: For years, policymakers have placed enormous faith in value-based contracts as the solution to rising health care costs. The idea was simple: shift the focus from volume to value by rewarding physicians for managing patient populations efficiently. However, in practice, these contracts have created financial uncertainty for primary care providers. Payments are often delayed for up to two years, and many practices report significant financial losses when they accept risk that is beyond their control. Pharmaceutical costs serve as a perfect example.
Increased administrative burden: Primary care physicians and their teams are being asked to do more with less, managing increased workloads and demands without adequate reimbursement. Physicians must perform enhanced screening, quality reporting, and ever-changing innovative care models while operating on a limited fee-for-service (FFS) base. This is already in the context of administrative burdens such as electronic medical record documentation, prior authorizations, increasing billing and coding requirements, and improved patient communication through EMR portals. All the while, the physician must maintain sufficient patient visit volume to generate revenue for the practice.
Rhode Island is less welcoming than adjacent markets: Rhode Island is a more hostile environment for physicians. Reimbursement across Medicare, Medicaid, and commercial payers is significantly lower. The medical malpractice environment is more challenging. Housing prices, which had been a positive for Rhode Island, are now rising and becoming more in line with Conn./Mass.
The role of hospital systems
Another issue is the trend of hospital systems acquiring primary care practices. With few new physicians choosing to open or join private practices, hospitals have acquired and expanded primary care practices. However, this is not a sustainable solution. Hospital systems often supplement $140,000 to $150,000 per full-time equivalent physician due to inadequate reimbursement, have a higher Medicaid mix, support undergraduate and graduate medical education, and have more significant regulatory requirements than a private practice. While this approach has helped to stabilize primary care, it does not address the underlying issue. In addition, when systems acquire and expand their primary care networks, they expect to channel downstream clinical referrals to their hospitals, labs, and other facility-based services. This pressure to utilize services can be at odds with value-based care goals. A mix of private and employed practices best serves any market. The failure of the reimbursement system has created an environment where more and more private practices have become unsustainable. If we fix the reimbursement system, we will see a resurgence of private practices and, as a result, greater primary care capacity and more options for physicians seeking different practice options.
A path forward
So, how do we fix this? First, we need to increase funding for primary care immediately. One way to do this is by raising fee-for-service rates for primary care physicians. While fee-for-service is imperfect, it is a necessary stopgap to keep practices afloat in the short term. Primary care doctors need financial stability today, not promises of delayed payments years down the road.
In the long term, however, the solution lies in a more stable payment model: primary care capitation. Under capitation, physicians are paid a fixed amount per patient per month, regardless of how often they see the patient. This provides a steady and predictable revenue stream, allowing physicians to make necessary investments in team-based care – such as hiring nurse navigators, care managers, and behavioral health specialists – that improve patient outcomes over time. Capitation moves away from the transactional nature of fee-for-service and enables doctors to focus on long-term care management rather than volume.
Additionally, we must eliminate downside risk contracts until primary care is stabilized. Payers and health systems must collaborate to ensure that reimbursement rates are fair, that infrastructure funding is restored, and that primary care practices have the resources they need to thrive. Moreover, addressing disparities in reimbursement between Rhode Island and neighboring states is essential to creating a more equitable and sustainable healthcare system.
Conclusion
Rhode Island cannot afford to wait any longer. The primary care crisis is real, and solutions are within reach. By increasing funding and transitioning to capitation, we can stabilize the system, prevent further practice closures, and ensure that every Rhode Islander has access to the primary care they need. The time to act is now.
(Dr. Wagner is CEO and president of Care New England Health System.)