Urology Times
We’re sure you have read about the plans for physician payment reform, had discussions on how the changes will impact you, and have concerns about what’s coming down the pike. In this article, we will discuss the issues that are important to you and try to put the changes that are taking place into perspective.
One of the authors (Dr. Painter) recently had the opportunity to discuss payment reform with a number of nationally recognized key players. In addition, he attended a seminar, for physicians only, conducted by Harold Miller, president and CEO of the Network for Regional Healthcare Improvement. There were multiple primary care physicians and specialists in attendance. The discussion was lively, serving as a reminder of the old saying, “When you’re being attacked, circle the wagons.” Unfortunately, physicians have a tendency to shoot inward instead of outward when attacked.
There was a lot of discussion about how primary care physicians need to be paid more to manage patients. The biggest concern of the specialists was that those primary care dollars would be extracted from specialists’ income—the same fear we’ve all discussed before in conversation after conversation.
Many ways to cut costs
In reality, it does not have to be that way. There are lots of savings to be extracted from the system if physicians can work together to remove excessive, unnecessary, and/or unnecessarily expensive treatments. Futile end-of-life care, very expensive drugs that have marginal value (or can be replaced with less expensive alternatives), poorly controlled chronic diseases, and hospitalizations and ER visits that could be avoided are just a few of the opportunities for cost savings.
With the shared savings contracts to be offered by Medicare, we actually can make the physician’s share of the pie bigger. The biggest hurdle is for physicians to decide how to split the pie. The next big hurdle is for physicians to remain in control so that contracts with expensive vendors, such as hospitals, can be ratcheted down. Hospitals, in the majority of cases, are not your friends and should be considered a vendor, not your partner.
Medicare wants to bend the cost curve and would be happy to simply decrease the percentage of increase from year to year. First and foremost, Medicare realizes that physicians are the only ones who can assist in accomplishing that goal. That’s the reason the law is structured so that physicians are in control of accountable care organizations (ACOs). As an aside, that’s also one of the reasons hospitals are buying physician practices. In order to protect their income and participate in the cost-savings contracts, hospitals will have to be aligned with physicians. With ownership comes control.
Yes, payment reform is occurring now and in many forms. Many physicians, including urologists, are selling their practices to hospitals. Others have joined much bigger single-specialty groups or are being bought by multispecialty groups. Many of these arrangements pay salaries as well as productivity incentives.
ACO pay structures vary
The law states that Medicare will continue to pay ACOs on a fee-for-service basis. However, the ACO can determine how to pay its physicians, hospitals, and others contracted for services. We think you will find the physician payment structure to be somewhat different in each ACO. However, we anticipate that they will all be a variation of the salary with incentives for quality/cost-efficient care or fee-for-service with incentives for quality/cost-efficient care.
There will probably be some physicians who will remain in fee-for-service medicine for years to come. We would anticipate that the downward pressure on income will continue. We particularly anticipate more and more medically necessary denials and a closer scrutiny of the services we provide.
Lest you think that the future is all gloom and doom, just remember that we have a huge shortage of urologists. Every hospital and every ACO needs an adequate number of urologists. Competition for the diminishing supply of urologists should keep bargaining power high.
While our focus here is mainly physician payment reform, we would be remiss if we did not address the bigger picture. Our health care system is in trouble. We have the technical capability and the know-how to provide a level of care that no society, even America, can afford. The politicians do not have the know-how nor the will to ration care.
The big question is: Will physicians rise to the occasion and seize the opportunity by accepting their role in changing the system? If physicians are willing to provide the leadership needed to rationalize health care spending, the system can be improved and the physician’s role in managing health care enhanced. If physicians do not lead this charge, the failed health care system managed by hospitals and the federal government will likely include rationed health care and lower physician incomes.
