Adam Katz-Stone


The generation that changed the way Americans think about rock-n-roll, free love, and the Volkswagen Beetle will soon turn its energies in new directions. Just as popular culture received a major overhaul at the hands of the youthful baby boomers, medical care in this country is poised to get a thorough once-over in the coming decade, as members of the post-war generation reach their golden years. 

The first boomers will turn 65 in 2010, and experts estimate some 78 million people, born between 1945 and 1960, will reach retirement age in the next 20 years. This means there will be significantly more senior citizens in this country than ever before - and thanks to advances in medical care, those seniors will eventually boost the average age considerably. According to the U.S. Census Bureau, the number of people over age 85 will double, to 7 million, between 1994 and 2020. 

Inevitably, this glut of gray-haired individuals will arrive at physicians' offices with the usual varieties of age-related ailments: diabetes, arthritis, hypertension, and chronic heart disease. But they will bring something else, too. Call it consumer savvy. Call it high expectations. Call it "attitude," if you will. With money, smarts, and high-speed Internet connections, a few tens of millions of geriatric baby boomers are about to take the healthcare profession on a wild, magic carpet ride. 

But where is it going? And what will it all mean to physicians and the way they practice medicine? 

 talked to numerous analysts, experts, academicians, and other such soothsayers to put together this speculative view of what healthcare in 2010 may look like. 

First and foremost, aging baby boomers by and large will be "empowered consumers," according to a report by the Institute for the Future, a think tank in Menlo Park, Calif. Such consumers "have considerable discretionary income, are well educated, and use technology (including the Internet) to get information about their health. These new consumers increasingly will engage in shared decision making with their physicians," states the institute's "Health and Health Care 2010: The Forecast, The Challenge," which was released in 1997 and describes the critical factors that will influence health and healthcare in the first decade of the 21st century. Among the topics addressed in the report are demographic trends, consumers, health insurance, the healthcare workforce, medical and information technologies, and public health. 

"We have [with the baby boomers] one of the most self-centered, self-important generations in human history, people who expect to live forever and to remain eternally youthful," says Tom Miller, director of health policy studies at the Cato Institute in Washington, D.C. 

The implications for medical providers may be staggering. At PriceWaterhouseCoopers in Dallas, Associate Director of Research Sandy Lutz compares the future of healthcare to current financial markets. 

"Today we have very empowered investors - who manage their own portfolios online, who pick their own stocks, who trade their own stocks very frequently, who are not loyal to stocks, and who constantly are trying to figure out where the value is," she says. "What we have seen in the financial markets could happen in healthcare." 

It is not exactly clear how this kind of enhanced self-determination is going to play out in the medical arena. Although boomers likely will not swap docs as readily as they drop their losing stocks, the analogy does suggest that the coming generation of seniors will put unprecedented new demands on physicians' performance, in terms of both the services they provide and the results they produce. 

Moreover, the ready availability of electronic information, as it has done in the financial realm, will feed this newly empowered consumer of medical care. Physicians are beginning to see signs of this trend already, as a growing number of patients are arriving in their offices with reams of downloaded documents in their arms. 

Boomers are among those already using this information, but they are interested in it for more than just sparking conversation. These are by and large highly educated individuals, and their easy access to medical information is going to have profound effects on the doctor-patient relationship. 

Historically distrustful of authority, successful in their careers (and therefore comfortable with taking charge), boomers will likely have no qualms about self-diagnosing and -perhaps more significantly -second-guessing their physicians. If they've read about a new form of treatment, or have visited online discussion groups where the efficacy of a procedure is called into question, they will likely raise those concerns with their practitioners. 


Some say the flood of information is nothing to fear. 

"There is so much out there that people can read and understand, and hopefully this will better equip elders and their families to understand their conditions and know what treatment options are out there," says James Fanale, MD, president of the American Geriatrics Society. "As long as this knowledge is used in a proper manner, that's a good thing." 

Others shudder at the prospect of rampant self-analysis and presumption. In such circumstances, Lutz says, physicians may need to fight fire with fire. 

"A lot of doctors will choose to put up their own Web pages, saying in effect: Here is the content I want you to click on and download, rather than coming into me with hundreds of pages from who knows where," she says. 

In addition to putting some control back in physicians' hands, a Web page can save a physician from repeating routine information all day long. 

Technology is only a piece of the "empowerment" puzzle, however. There are strong indications that aging baby boomers will not only be better informed about medical topics, but also more demanding of their medical-care providers. 

"The post-war baby boomers, who have been an egocentric and demanding group at each stage of their lives, are now becoming the key healthcare consumers, purchasing care for their own aging bodies, as well as for their frail parents," PriceWaterhouseCoopers notes in its "HealthCast 2010" report, which discusses the future trends of healthcare policy makers. 

As such, "they are incredibly fickle," says Mary Cain, director of Healthcare Horizons at the Institute for the Future. "They will change [their] physicians because of customer service issues, because of lack of control over their own treatment process. In a world of excess capacity of physicians, this means physicians will have to market their customer service in ways they never have in the past." 

It's not a prospect that delights physicians, and yet Cain and others insist that changes in compensation mechanisms are going to make that kind of salesmanship a must. 

"Third-party payments have always protected physicians [from the whims of consumers] in the past, and all that is getting blown wide open," says Cain. Employers are getting out of the healthcare business, handing the money and the control directly to workers, "and as it becomes much more consumer-driven, it becomes much less rational." 

Under these circumstances, "[healthcare] will have to become much more of a service industry," she says. 

This may mean weekend office hours, e-mail consultations, and a general willingness to stop talking and start listening. 

"We call it 'popping the God bubble,'" says Cain, referring to the long-standing model in which patients have viewed their physician as the supreme - and often inviolable - source of medical information. 

Dean of the University of Texas at Houston Medical School, Dr. Maximilian Buja is anticipating this change. Today's curriculum, he says, prepares a medical student "to be a partner with the patient in crafting a diagnosis and a treatment plan, as opposed to the more traditional notion of the physician being the all-knowing and omniscient, god-like figure." 


Just as the aging boomers will demand more from their physicians, they will likely demand more from their elected officials on healthcare issues. If they don't like the healthcare system - a system upon which they will come to rely ever more heavily in their retirement years - it's a safe bet they will lobby hard to change it. 

At the Cato Institute, Miller says the demands of aging boomers will almost surely force a change in how the government reimburses physicians for the care they provide to seniors. 

"You have more of the population shifting over to the side of the healthcare system that is the least modernized - that is, the traditional Medicare program. So all these folks who in their young age have enjoyed prescription drug coverage and some degree of managed care will find themselves suddenly operating in a very different system," he says. "As the population shifts, we cannot continue to have one set of standards for the working population and then have this very different system for people over 65." Without major changes in Medicare, he adds, "ultimately physicians may say that they cannot survive in a world where there are all these rules and rigidity with relatively limited compensation." 

In one model, experts project that Medicare may come to reflect the best practices of commercial managed care - and that could be a plus for physicians. 

"If physicians get into a changed environment, one in which they feel that they can serve individual patients more effectively, they will find their approach to medical practice is much more of what they originally envisioned," Miller says. 

It is almost inevitable, for example, that some form of prescription drug coverage under Medicare will arise in the coming years, giving doctors greater latitude in their pursuit of treatment options. Also, as the Institute for the Future suggests in its report, tomorrow's senior will likely push for the availability of more diverse insurance products, including POSs and even PPOs. Fanale agrees that pressure from politically confident seniors could force changes that will benefit practitioners. 

"I think it takes a lot more time and effort to care for a frail 90-year-old person than it does to take care of a healthy 65-year-old person," and reimbursement levels will need to start recognizing that disparity as a greater percentage of the population reaches advanced age, he says. 

Fanale's analysis raises an interesting question: What will be the actual physical condition of this vast gray generation? What are the medical issues at stake here? 

On the plus side, in their early years, the aging boomers may be in fairly good shape. They have largely pared down their smoking. They work out a bit and live within some reasonable level of dietary moderation. This state of affairs, combined with tremendous medical advances, means that they will live longer.

They may in fact live to be very old: The Institute for the Future projects there will already be more than 100,000 people over the age 100 in this country as early as the year 2010. Thus, in the long run, doctors may have more chronic diseases to deal with - including heart disease, emphysema, diabetes, and high blood pressure. 

This means that more specialists will need to familiarize themselves with the needs of seniors - and this applies to physicians in a surprisingly diverse range of fields. For example, in addition to orthopedists, who traditionally have treated a big portion of the senior population, professionals in fields such as physical therapy and cosmetic surgery also will increasingly be called upon by this generation that experts say will expect to retain the full mobility and allure of youth, long into its twilight years. 

"The geriatricians cannot care for all older people," says Fanale. "They specialize in frail, older people, but the general elder population will need to be cared for by all, so we will need to make sure that specialists everywhere are trained and equipped to care for older people in their own specialties and disciplines." 

Those who do care for this aging population also will need to have new weapons in their arsenals. 

"We will have to have more tools where people can be monitored electronically - where they send data telephonically or through the Internet to their doctors' offices, and if a red flag goes up, the doctor is alerted," Lutz says. "There are a lot of Internet companies that are developing these models, and that makes sense. Ten years ago we heard a lot about disease management, and now the Internet will really allow that to happen." 


In fact, a number of applications along these lines are already on the market. As the availability of higher-bandwidth transmission lines escalates over the next three to five years, it is likely these applications will proliferate rapidly. 

In addition to thinking more about better methods of diagnosis, physicians also will have to do more to keep themselves on top of the relative pros and cons of treatment trends. For example, Fanale notes that, though pharmaceutical advances bring great promise, those advances often come with a heavy price. 

"One of the biggest pressing issues is the cost of pharmaceuticals. It is clear these costs are rising at double-digit percentage rates, and physicians will have to deal with that," he says. 

As increasing numbers of patients leave the workforce and find themselves on fixed incomes, doctors will need to become increasingly sensitive to cost concerns. 

"We need to be much more aware of the newer drugs on the market and of the older ones that work, and we will need to think about the cost of the selections that we make when we prescribe a particular drug," says Fanale. 

While gerontologists have long weighed such considerations, it is likely that all physicians will have to get into the habit in the coming years. 

By the same token, all physicians will have to think about the role they will play in helping to support the medical needs of seniors in settings other than the office. Analysts say boomers will stay in their homes for as long as possible, rather than move into nursing homes, and that fact will fuel a demand for doctors who are willing to travel. 

Does this suggest a return to the days of physicians making house calls? In fact, that may just be the case. 

"There is a lot of care that can be delivered at home," and if Medicare will adequately compensate that care, increasing numbers of physicians may choose to incorporate home care into their practices, says Fanale. 

All this begs the question: What do physicians need to do in order to be ready to embrace the changes that are coming? The experts offer a few practical suggestions.

Go back to school. Devote some continuing-education time to learning the basics of care for seniors, since they will likely come to represent a larger portion of your practice. 

Get computer savvy. Keep up with the literature regarding advancements in technology, such as the clinical use of e-mail, and start to think about how electronic information is going to factor into your work. How will you practice in a world where geography matters considerably less than it has in the past? 

Face the "alternative." Like it or not, physicians in a customer-service-driven healthcare environment are going to have to justify to their patients the rationale for choosing traditional remedies instead of - or at least in addition to - so-called alternative therapies. 

Take a customer-first attitude. Along those same lines, physicians will somehow have to address the amorphous issue of "customer service." This will reach into every aspect of one's practice: from where the office is located, to what the hours are, to who answers the phone, to how the waiting rooms are set up. No longer a mere appendage to a doctor's practice, the waiting room will become a marketing vehicle. If service is key, that means patients will want comfy chairs, reading material that does not date back to the previous year, perhaps even a hot cup of coffee while they wait. 

And don't make ,em wait. These choosy consumers will expect to be seen at their appointed time, and they will demand the freedom to make those appointments at their convenience. This may push docs toward evening or weekend hours, or even toward some system of limited open-door time at the beginning or the end of the day, during which patients with immediate needs can simply drop by. 

All this speaks to the broader issue of marketing. As Price-WaterhouseCoopers notes, "[i]t used to be that the physician was the brand, and thus the consumer's dependency was to the physician. If a physician moved across town, the patient still went to him or her." 


Although managed care has steered patients away from that model by telling them which practitioners they can and cannot see, analysts say tomorrow's seniors will increasingly regain control of their own healthcare dollars, which could put an increased marketing burden on doctors. 

As seniors become empowered to make more of their own healthcare choices, doctors will need to find new ways to market themselves. This may take the form of a welcoming Web page; it could mean forming a voluntary association with other like-minded doctors who together can forge a unified message about the nature and quality of their care; or it might mean physicians will take a more proactive role in alerting patients about their qualifications and credentials - something a little less subtle than a diploma hung discreetly over the desk. 

Marketing also means hearing a friendly voice on the phone. 

"That person is your front line and will be the person to determine how you are perceived by your patients," says Cain. In a competitive environment, human-resource decisions that once were routine can become make-or-break issues. And the physicians themselves will have to change - at least, those who can change. 

"Some physicians simply are not in the mode of having a customer-friendly bedside manner, and I don't think you can go back and reeducate them to be that way. I don't think they have a class for that," says Lutz. "Those physicians who are used to a supply-side model in which they call all the shots, those who don't want to accommodate a more consumer-driven action, may very well end up retiring early." 

This article originally appeared in the November/December 2000 issue of Physicians Practice.

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The generation that changed the way Americans think about free love and the Volkswagen will soon turn its energies in new directions.

2010 Vision


Mark Estroff, who provides management advice to physicians, has a client whose entire income depends on a single hospital. That's a bankruptcy waiting to happen, he says.

"You have to plan your affairs so that losing a major contract will not ruin you. If this person isn't careful, if he falls from grace with that hospital, he could be out in the cold," says Estroff, a principal with the Atlanta-based accounting and consulting firm Gates, Moore & Company.

Financial experts say this scenario - physicians' practices going bankrupt because of failed relationships with other companies - is becoming increasingly common. The downfall of a number of major insurance carriers and practice-management groups in recent years has put the medical world on notice. "Insurance-company failure is happening more often than it has in the past. We are not yet seeing a large number of physician bankruptcies as a result, but it is something that could start happening," says Darrell Schryver, a principal consultant with the Medical Group Management Association (MGMA), which represents about 200,000 physicians.

Judith A. Mackarey saw this scenario unfold when Pennsylvania's Allegheny Health, Education and Research Foundation went under a couple years back. Doctors affiliated with the health system discovered that their rents hadn't been paid in months. Worse still, the health system's collapse meant that those doctors might never see the money Allegheny owed them, explains Mackarey, a principal in the Philadelphia-area law firm of Mackarey and Davidson.

Rather than declare bankruptcy themselves, many of these doctors simply walked away from their Allegheny ties and tried to start up new practices. However, the effect of Allegheny's bankruptcy was essentially the same as if the doctors had gone broke themselves: It left them with no cash, no credit, and a long uphill road to face.

To avoid becoming involved in such a situation, Mackarey says, physicians need to be extraordinarily diligent in their relations with practice management groups and other entities. "Watch very carefully how they are doing financially. If they are not paying you on time, or if an HMO is not paying what it owes you, they may be in breach of your agreement and that may give you an option to terminate. That is when you terminate -  not when the worst has happened, because then it is too late," she says.

Such advice may seem a bitter pill to physicians who are more interested in practicing medicine than in balancing books, but experts agree that the best way to protect yourself is to be in touch with the business end of your practice.

"The healthcare environment is such today that you have to have sound business techniques if you are going to survive," Schryver says. "Many of those I know who have gone bankrupt had absolutely no clue about the business of medicine. For example, they may have signed managed-care contracts that did not cover their costs, simply because they did not know what their costs were."

Even those who refuse to sully their hands with fiscal concerns can take preemptive measures that may save them from the stigma of bankruptcy further down the road. "You don't have to be a CPA, but you have to be interested in your practice, or at least appear interested," Estroff says. "Make the staff put a daily report on your desk. Even if you don't always know what you are looking at, the personnel at least will know that you are paying attention to your practice."

Of course, the collapse of an outside entity is not the only thing that will force a physician into bankruptcy. About 1.3 million Americans declare bankruptcy each year, and medical professionals are not immune. Sometimes the cause is simple - one vacation house too many or a spouse run amok with a credit card - or more complicated, such as involvement in a failed investment scheme.

Whatever the cause, however, personal bankruptcy can have a direct and devastating impact on a doctor's practice. "The bankruptcy code is set up to give you some time to put things together and get your life back in order. Sometimes you can't regroup, however, and then the creditors come in and demand the return of your equipment [and] the landlord terminates the lease. These things can happen," says Bonnie Weir, an attorney and senior counsel with the New York-based law firm Kern Augustine Conroy & Schoppmann, which dedicates its practice to the legal needs of physicians.

If a practice is incorporated, its assets may be protected in the case of a personal bankruptcy, but most practices aren't incorporated and such protections are limited. Moreover, Weir says, the typically high income a doctor enjoys can complicate efforts to declare personal bankruptcy. A pricey home or high credit card debt, for example, can rule out the possibility of declaring a Chapter 13 reorganization.

The alternative is a Chapter 7 filing, and it's not a nice one. Chapter 7 pays creditors pennies on the dollar and can do serious harm to one's future credit rating, making it harder to bounce back from bankruptcy in the long run.


The only other option is Chapter 11 -  a form of bankruptcy used mostly by corporations. Individuals can file under this too, "but there are massive reporting requirements," says Weir.

The smartest course of action is to avoid the bankruptcy scenario altogether, and the best way to do that is to get help early.

"It can be very difficult for a doctor to admit that he or she has made a mistake that has resulted in financial problems. They don't want to face it early on. As a result, it is difficult to prevent bankruptcy in many cases," says Weir. "As soon as you see that you are in over your head in any way, shape, or form, immediately contact your attorney and try to find a way out," she adds.

"That may mean entering into agreements with people for extended payment plans or paying them some percent on the dollar. If you have just hit a short-term snag, and you can target where you need to protect yourself in order to continue your operations, you [may] avoid going through the bankruptcy at all. If you wait too long to approach your creditors, it will be much more difficult to negotiate with these people," she says.

Estroff concurs, adding that an early start can make all the difference when a practice is in financial straits. In addition to appeasing creditors, a preemptive strike can give a physician greater flexibility at the bank.

Estroff recommends that, as soon as trouble looms for the practice, the doctor should skip a paycheck or take a pay cut to build up the cash reserves. At the same time, he or she must work with the bank to arrange a short-term loan or line of credit that can carry the practice through until cash flow gets sorted out. "Then you are using credit as a tool, rather than as a desperation tactic," he says.

This article originally appeared in the May/June 2000 issue of 

How to avoid bankruptcy when key partners go belly up

Author | Adam Katz-Stone

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