Policy Changes Key to Helping Independent Physicians Thrive

August 3, 2012

Private practice physicians can only do so much to retain their independence. Policies need to change as well.

Recently, we wrote about four ways private practice physicians have kept their private practices thriving despite declining reimbursements, increasing overhead, and hospital acquisition pressures.

But physicians can only do so much to change their practices when it comes to retaining their independence. Policies need to change as well.

A recent report from the Physicians Foundation notes several policy recommendations that could better enable private practices to stay afloat.

The report’s findings and the retention of private practice in general are of crucial importance, Lou Goodman, president of the Physicians Foundation, told Physicians Practice, noting that if private practices die out, physicians who wish to stay independent will suffer, and patients may suffer as well.

“Hospitals are merging and consolidating; insurance companies are merging, consolidating; pharmaceuticals are merging and consolidating,” Goodman said. “...In our environment patient choice is very important and by consolidating and not allowing small practices, individual practices to exist alongside these mega corporations, I think we take something away from patients.”

For one thing, that “something” includes patient choice. The more consolidation that occurs, the fewer choices patients will have when it comes to their care.

For another, it’s still unclear whether larger healthcare systems increase efficiency and care quality, said Goodman. “Until we know the answers to those questions, why the almost blind rush toward consolidating everything and making it bigger?"

Here’s a look at some of the policy recommendations noted in the report:

Increase Medicare’s valuation of E&M services. The report proposes a 30 percent upward valuation in fees for evaluation and management, as well as for diagnostic decisions, under the Medicare program. This increase should not be confined to primary-care physicians, but should extend to diagnostic decision makers such as cardiologists, radiologists, and pathologists, according to the report.

“By providing additional payment for E&M it will allow doctors to be more viable,” said Goodman.

Eliminate Medicare’s site of service differential in physician payment. The report calls for elimination of Medicare’s site of service differential that enables hospitals to charge more for physician services provided in a hospital setting.

According to the report, these payment policies tilt the playing field in the direction of hospital employment and away from independent practice.

Simplification of physicians’ reporting requirements. The report states that a federal commission should be created to evaluate and reduce physicians’ reporting requirements, both for claims payment and quality improvement.

“Each new federal initiative ... brings a fresh layer of complexity that translates into increased documentation time and reduced clinical productivity,” according to the report. That of course, leads to decreased reimbursement for practices.

That’s a major problem when the physician shortage is increasing and an influx of newly insured patients is expected due to healthcare reform initiatives, said Goodman.

“Right now, the average I’ve seen reported several times is about 25 percent of a doctor’s time is devoted to just paperwork, which sounds to me just overly excessive,” he said.

Tort reform. Because hospitals can alleviate their salaried practitioners of the need to purchase malpractice insurance, the current tort liability system is an additional factor that biases physicians toward abandoning private practice, the report notes.

One interesting solution the report suggests is to mandate a 30 percent or better reduction in physicians’ malpractice premiums for physicians who have adopted and implemented EHRs.

This would “reflect the reality that they are practicing safer medicine by becoming meaningful users,” according to the report.

Physician input. Of course, policy changes tend to be linked with politics and leadership.

“What’s missing in the conversation, and I believe this is a key and critical element ... is that the conversation is about healthcare but the caregivers are not included,” said Goodman.

In our 2011 Great American Physician Survey, we asked readers to tell us how they felt about the following statement: “I believe physicians are represented about as well in Congress and the White House as most other professional groups. Sure, a privileged few industries seem to have a direct line to the halls of power, but physicians’ views are heard and respected most of the time.”

Fifty two percent of survey respondents said that “Occasionally the AMA or some other physicians’ group can break through on a specific issue, but in general doctors are not well-represented in Washington." In contrast, less than 1 percent said “the statement understates the influence that physicians have in Washington, which is actually quite significant.”

How do you think the report’s policy recommendations could influence private practices?