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Katherine Watts

Health Care

Pressure Points for Physicians in Healthcare Transformation

Value-based payments, engaging patients, and effective business models are critical

Published: Tuesday, July 5, 2016 - 11:58

The HORNE Healthcare team has been blogging recently about the necessary business model changes we think are inevitable to healthcare transformation. We’ve focused on the macro level, urging healthcare organizations to take action. Although I believe our advice is sound for large systems, I am additionally concerned about the pressures physicians are feeling in their practices, particularly in small practices. Here, I’d like to introduce three issues I think will be important to physicians going forward. I will write in greater depth on each topic in the coming weeks.

Getting paid for the work they do

Value-based payments are not coming sometime in the future. They are here now, and physicians who are not already in value-based arrangements are months, if not years, behind.

For example, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the Medicare sustainable growth rate more than a year ago, and to date, the recently released proposed rule provides the most concrete guidance on the likely trajectory of physician payment under Medicare Part B for the next decade. The first performance period begins in January 2017, which doesn’t give physicians much time to consider their options, make plans, and implement them, but it has to be done.

The Merit-Based Incentive Payment System (MIPS) included in MACRA creates composite performance scores based on the following four categories:
• Quality
• Cost/resource use
• Advancing care information
• Clinical practice improvement activities

Some physicians may choose to enter into alternative payment models (APMs) rather than be reimbursed under the MIPS track.

Navigating this new environment will take time and a willingness to develop innovative plans to succeed. Physicians are being asked to assume more risk in each transaction, and increasing risk is not comfortable for most people. Risk, however, can be managed.

Engaging patients

One of the keys to making the new healthcare system work well is meaningful interaction between physicians and patients. A part of the new model, certainly, is meaningful clinical interaction, but the model also requires creating an environment where doctors are most effective and patients have a voice.

As consumers, we have grown used to having online access to information whenever we want it. We can shop in the middle of the night, and Zappos will send shoes the next day. Amazon suggests new products that we might want. We can arrange for a car and driver to pick us up at our convenience.

We also want service providers to be available on our schedules. The rapid growth of 24-hour clinics, telemedicine, and online access to medical records proves that our expectations about healthcare are in line with our other consumer behaviors. Patients want to be in charge.

Of course, health is not merely a consumer issue—doctors are not selling light bulbs or socks—but the new consumerism is affecting physicians in dramatic ways and will require adjustments to basic business models to stay competitive. Conducting business as usual, without considering the effect of the new consumerism, will prevent many practices from remaining competitive and effective.

Staying independent or becoming an employee

With regulatory activity increasing and new requirements looming, many physicians must decide whether to stay independent or to become an employee of a healthcare organization. Some physicians who have become employees are now re-examining that decision, and some healthcare systems are re-examining their contracts with physicians.

Certainly, becoming an employee of a healthcare system removes some of the overhead costs and provides support for the physicians, but it also removes the freedom of running an independent practice. Working as an employee isn’t right for every doctor, but every doctor will soon need to adjust to new regulations.

No matter which business model a physician chooses, building networks of specialists and other healthcare providers will be essential to improving outcomes. Patients need help with chronic conditions that may be worsened by poor living conditions, lack of home care, or contributing issues such as poor diet. Collaboration across providers will be critical.

If a physician does decide to remain independent, however, the old model of a solo-practitioner may no longer apply. The trend is for physicians to form large, integrated practices that can compete with services offered by healthcare systems. These large physician practices are able to use data to prove they are delivering value and quality to their patients, something solo practitioners may find difficult to do.

The result of these issues and others is that physicians are evaluating their ability to remain in small practices. Their response to the changing environment requires new thinking about how to provide care efficiently through a network of providers. The model of a solo practitioner may not be viable any longer—not because a solo physician can’t be sustainable—but because quality healthcare may require the participation of other providers.

Moving forward

I believe that creating effective processes is important to transforming healthcare, but I also believe that the interaction between patient and physician is the essence of the system. It would be counterproductive to build a system that addresses data concerns and regulatory requirements but fails to improve the health of our country. Our goal is better care for individuals, better health for populations, and lower costs for healthcare overall. Join me in the coming weeks as I examine some of the issues essential to creating a system that is responsive to physician needs.


About The Author

Katherine Watts’s picture

Katherine Watts

Katherine Watts is the partner in charge of healthcare services for HORNE LLP. She leads a team of certified public accountants and healthcare consultants providing services to physicians, medical groups, hospital systems, ambulatory surgery centers, and other healthcare organizations as they develop strategies to meet today’s market demands. Watts provides healthcare, consulting, and taxation services.