What Physicians Can Look Forward To: Change

Laura P. Jacobs provides a clear and perhaps eye-opening account of what the future holds in store for physicians in a HealthLeadersMedia article titled 10 Healthcare Reform Market Changes Affecting Physicians. While Republicans talk of repealing the Patient Protection and Affordable Care Act (ACA), those in the healthcare business are taking it quite seriously. They see big changes on the horizon, and are beginning to embrace the directives for change. For the individual physician it will no longer be practical to exist as an independent business working within the traditional fee-for-service model.



Jacobs leads with this sobering comment.

“Physicians in private practice have been faced with a series of challenges and opportunities in recent years, and some assume that ‘this too shall pass.’ The risk, though, of ignoring market trends is to face the downside of evolution – extinction.”

Her first warning is to not expect increases in income because Medicare reimbursements rates are becoming a relative standard and they are not going to increase much in the near future. The only way to beat this trend is to change the business model under which one operates.


Much discussed within the healthcare industry, but little mentioned in the popular media are Accountable Care Organizations (ACO). In its simplest form it is a group of providers who band together with the goal of providing better healthcare results at lower costs. Taken to its logical conclusion, an ACO is Kaiser-Permanente. ACO formation is encouraged within the ACA for participation in Medicare, where the incentive is that if savings are accrued relative to the fee-for-service experience, the savings can be shared with the ACO. To be considered an ACO one must have at least 5000 Medicare patients under coverage. The system is being forced to economies of scale, and each provider is placed in a cost sharing system where the incentives to over treat for greater income are inhibited.


If the ACO model works for Medicare it will work for all patients. The healthcare industry has bought into this as the future. There will be many trials and errors before the best manifestation of the ACO concept is determined, but it is expected to be a viable model for controlling costs and improving healthcare.


What does this mean for the individual physician?

“ With the passage of the American Recovery and Reinvestment Act of 2009 (“ARRA”), physicians have the opportunity to earn incentives up to $44,000 from Medicare for implementation of electronic medical records (“EMR”) that meet ‘meaningful use’ criteria. But after 2015, penalties are imposed if practices fail to meet these criteria. Additionally, the need to be clinically integrated with other physicians and hospitals is growing due to various new payment methodologies, not to mention patient expectations. Within the next few years, it will not be a ‘benefit’ to have an EMR AND connectivity with other providers, it will be a requirement to stay in the game.”

Physicians’ healthcare success will be open for public scrutiny.

“The Physician Quality Reporting Initiative (“PQRI”) program was expanded in ACA, so that there are increasing incentives to participate through 2014, then the penalties for non-participation begin (sense a theme here?). Results will be posted publicly on the to-be developed “Physician Compare” website sponsored by CMS. This is in addition to the data gathered by payers and other private rating websites such as HealthGrades. Whether or not the measures are “right,” they will be published and available to consumers. The forward-thinking physician organizations are collecting and sharing this information among physicians now to provide timely feedback and improve organization-wide performance and outcomes.”

The methods of doing business will change.

“Providing the estimated 32 million or more currently uninsured individuals with access to health insurance will likely create or exacerbate access issues for medical care.... Only through redesigning care delivery models, implementing electronic visits (e-visits) and other electronic tools such as telemedicine, effectively utilizing a broad array of healthcare practitioners and support staff, and empowering patients to play an active role in their health will an access ‘meltdown’ be avoided. Even today, patients are increasingly expecting ready access (defined by the patient) to their healthcare providers through e-mail, portals, and, when necessary, the face-to–face visit at home. Physicians who cling to the traditional office visit as the only venue for care will risk declining patient preference and limited – hence declining – patient revenue.”

The role of the physician within the medical community will also have to change. Economics demands it, and it appears the younger physicians also demand it.

“ In addition, the generational shift in expectations among young physicians – for employment models that provide greater security, balanced work life, and part-time options that many small private practices cannot offer – creates a dynamic in many markets where the big groups (or hospital-owned) get bigger, and the small practices disappear as physicians retire. All this requires physicians to evaluate how their group or practice is structured for recruitment of a clinical workforce to facilitate growth and/or succession planning to meet community need. This may require looking to advanced practice nurses or physician assistants as well as a re-evaluation of compensation plans, benefits, and even medical group structure.”

“The times they are a-changin’.” And it’s about time.