Very recently, a provider that I have known and worked with for a long time informed me that he was leaving his practice. He gave me a copy of an article from The Health Care Blog titled “How to Discourage a Doctor1” by Richard Gunderman, MD, and stated that the essence of this post is his reason for throwing in the towel. The article itself was written by a doctor who appears very misled as to where certain drivers of policy and procedure originate. It begins with the provider finding a document left behind in the hospital administration waiting room titled “How to Discourage a Doctor,” and takes a satirical view in detailing the many bureaucratic challenges facing physicians. The article identifies the “most important driver of costs in virtually every hospital will be its medical staff.” To maintain a favorable balance sheet, administrators must “gain control of their physicians,” which can be accomplished by “transforming previously independent physicians into employees” and “tying physician compensation directly to the execution of hospital strategic initiatives,” which thereby increases “hospital influence over their decision making.” Finally, it cites the mandated use of technology, evidence-based care guidelines, and payer reimbursement structures as hospital-driven tools resulting in a discouraged provider.
Having worked for independent physicians, for hospital-employed providers, for the hospital itself, and currently as a Healthcare IT consultant, I feel I have had adequate exposure from all sides of the fence to give an objective evaluation and break down the flaws in the highlighted assumptions. Yes, hospitals have to put some constraints on providers to control costs and balance budgets, however those budgets and strategic goals are not dreamed up by hospital executives or other stakeholders trying to drive the market. We are part of a culture driven by a broken economic system, and in trying to correct this, have grown dependent on payments from the insurance industry to sustain our practices. Some of the comments regarding the article came from providers that have escaped this cycle by opting to do a cash-only business, but let’s face it, most consumers cannot afford to pay out-of-pocket for healthcare. Additionally, the cost of healthcare has risen in part due to the need for providers to protect themselves from claims of malpractice. As I break down a few other facilitators, it becomes evident that while there are discouraging drivers within the medical community, many extend far beyond the hospital’s control.
First – the Government
Ahh, we love the alphabet soup: MU, PQRS, PCMH, ACO, CCJR are just a few, and of course Healthcare Reform as a whole. Let’s assume we all agree that communicating between entities regarding patients’ healthcare is a great idea. At a provider level, if all systems could talk, a click of a button could show that your patient was admitted to the ER the night before, is seeing multiple providers, or was prescribed meds unbeknownst to you. All of this information helps tailor a treatment plan accordingly to a patient’s needs.
Taking the same philosophy at a macro level, if the CDC or FDA could aggregate data and identify an emerging epidemic or a pattern of complications from a specific drug usage, why would we not want to support that? Large sums of money are spent on medical research to cure diseases such as cancer, MS, or ALS, but imagine if researchers had access to the aggregate health data of hundreds of thousands of patients. How would that expedite the progress of developing cures for horrible afflictions? The potential to avert a disaster and better patient health outcomes drives the need for enhanced interoperability between systems and regulations for EHRs, hence all the Meaningful Use, PQRS, CQM and many other buzzwords you hear about today. Hospital executives do not make these requirements, however, if they want to see patients and get paid, they have to comply and they cannot do it without support of providers.
Second – Malpractice
Many people may not be aware of how much it costs an individual provider to carry malpractice insurance for one year. Despite the tort reform that has been passed in recent years, there are still many states that have extremely high liability costs. Below is an example of three specialties in three different states.
With other overhead costs continually rising and payment from health payers decreasing, it is difficult for a provider to survive with the cost of medical liability coverage, and many have been known to reach out to hospital-based provider networks where they can join in on a group coverage to help defray this expense. To contractually qualify for this group coverage, the provider or his practice has to be affiliated with the hospital network. Many times, this will require an employment agreement of some fashion. Of course with an employment agreement, the physician is then required to abide by all the regulatory obligations of the contract. In this instance, this is a financial benefit to the provider and not a control game played by the hospital system.
Third – Insurance Payers
Have you ever examined your Explanation of Benefits and seen how much of a write-off your provider/hospital is taking? Take for example a patient who receives an outpatient procedure where the physician’s bill for the service is priced at $900. Insurance pays nothing because the patient had not met their deductible, so the provider is forced to write off $750 due to contractual obligation, leaving the patient with a $150 balance. This is a very typical example of contractual write-off between health plan and provider. Nowhere did the hospital executive dictate to my provider what was paid (or not paid in this case) for the services performed. Believe me, as an employer of that provider, I am sure they would have much rather received even a portion of that $750 than have written it off as uncollectible.
It has been my experience that hospitals and provider networks are trying to work together as a group to meet insurance payers’ requirements for increased reimbursements. Many payers are paying incentive bonuses when a facility meets a goal such as PCMH accreditation, quality of care guidelines or measures, and some readmission or emergency care goals. Blue Cross and Blue Shield states “member plans saved more than $1 billion through programs that ‘emphasize prevention, wellness and coordinated care while reducing costly duplication and waste in care delivery2.’” CMS provides the following background for their Bundled Payment for Care Improvement plan.
Traditionally, Medicare makes separate payments to providers for each service they perform for beneficiaries during a single illness or course of treatment. This approach can result in fragmented care with minimal coordination across providers and health care settings. It also rewards the quantity of services offered by providers rather than the quality of care furnished. Research has shown that bundled payments can align incentives for providers – hospitals, post-acute care providers, physicians, and other practitioners – allowing them to work closely together across all specialties and settings3.
Everyone in the healthcare industry knows that CMS dictates the trends, and other payers shortly follow. Managing hospitals and provider groups develop policies and protocols to meet these objectives so that they can receive more reimbursement for their services, while simultaneously managing their patient populations more effectively.
We can’t direct all our frustrations with the challenges of today’s providers towards the hospital executives, as there are obviously external forces driving these regulations. Players across the entire healthcare spectrum need to come together and find resolutions for each obstacle, and Healthcare IT organizations like Galen Healthcare Solutions exist to facilitate synergistic change. We should not discourage our providers out of practicing, but instead strive to make them partners in the future of healthcare. Contact us to let Galen help you with your challenges, whether it involve migrating to a new system, custom reporting for incentive programs, or optimizing your portfolio of applications!