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Physicians are feeling the impact of the Affordable Care Act and shifts in payer reimbursements. Concierge medicine might be an option to address these changes head-on.
Physicians have once again avoided the Sustainable Growth Rate (SGR) “correction” to Medicare reimbursement rates. For all intents and purposes, SGR is now a non-issue. Yet physicians still continue to talk about uncertainty and fear of the unknown.
But here’s the reality of today: While it is still a political “hot potato,” SGR is no longer a real threat to the level of reimbursements. Ongoing downward pressure on global Medicare reimbursements, however, remains real.
But that’s not what we should be talking about in 2013. Let’s be honest. It’s not really fear of the unknown that’s bothering many of us; it’s really disappointment in the present. When it comes to the future of healthcare, things haven’t quite gone the way some wanted them to go. Many physicians are threatening to leave Medicare - to retire early or basically pack up their toys and play elsewhere.
And that’s one option. In reality, physicians today have three choices: 1) leave medicine; 2) stick their heads in the sand and do nothing; or 3) adapt and retool for the coming changes in the marketplace. In my opinion, those that make adjustments to meet the realities of the inevitable future will win, those that don’t, won’t.
Let’s start by looking at what we do know and what is going to happen in the next few years:
• The current reimbursement system is unsustainable. Revenue is limited and demands for healthcare will only continue to increase under the Affordable Care Act and as the population ages and has increasing healthcare needs.
• Reimbursement rates will change - there is simply no way around it. However, on the positive side, I also believe that legislators will recognize from past attempts that they must be careful not to cut so much as to create a stampede of physicians leaving government programs.
• There are going to be adjustments on both sides: to the benefits side (those who are covered, when covered and how much) and to the compensation side (who gets paid and how much they will be paid). The only uncertainty is how much and when.
• Changes in reimbursements, especially for specialists, will directly impact practice revenue, especially for smaller groups. Primary care will be slightly more protected than specialty care.
• Many physicians are considering leaving Medicare to avoid the ongoing marketplace uncertainty. At least for the time being, this is an idle threat given the size of the market that Medicare patients represent.
All these realities directly impact physicians and patients, and more specifically, choices available such as concierge medicine.
Retooling for the Future
Unfortunately, some physicians will not have the option or choice in the delivery system they participate in or offer. For those physicians who are part of a larger entity, in certain markets, just starting out, or who must participate for various reasons in government programs, going private or offering full model concierge programs will not be possible.
Here’s why: In the emerging healthcare marketplace, managing the vertical delivery of services will become more and more important in controlling costs. Full models of concierge care are not consistent with such an approach as they require a more personalized, but also more costly, approach to care - one physicians and patients love - but insurance and government do not.
Hybrid concierge programs offer options for physicians, patients, and payers. Hybrid concierge programs rely on private funding while still maintaining a large panel of patients participating in third-party plans. They also enable specialists such as cardiologists, gynecologists, or others already providing a significant amount of primary-care services to patients to add in a controllable, predictable, and certain revenue stream into their practices.
Yet another benefit of the hybrid is that the stable and private source of revenue enables practices to continue to see all patients - even those on Medicare. In eight years, none of the physicians in our hybrid program have left Medicare. This is a critical feature as more baby boomers enter the system and as we seek to promote models that encourage more physicians to enter and stay in the current healthcare system to address physician shortages.
I’m not saying that those who believe that the future is uncertain are missing the point. However, in light of the changes that are inevitable, I am saying that rather than worry, it is time to take action.
What are some of the ways you plan to adapt to the ongoing changes in healthcare today? Have you considered concierge, hybrid, or direct pay models? Or do you simply want to sell your practice and gain some short-term security?