Preparing Your Practice for Health Reform

March 18, 2011
Keith L. Martin

How will you and your practice fare in a reformed healthcare market? We surveyed the experts for clarity on what's changing, what's not, and how it's all likely to affect you.

Family physician David M. Boyd thinks integration of patient care under accountable care organizations and patient-centered medical homes is a great idea. The Midlothian, Va.-based physician just wonders how it will happen in reality.

The implementation of a new EHR at Piedmont Pediatrics in Greensboro, N.C., meanwhile, is causing the practice to rush to meet meaningful use criteria, so much so that pediatrician Ron Young says it hasn't focused much on what lies down the road under the Affordable Care Act.
"Our current status? I'd say our left foot is in scramble mode and our right foot is in wait-and-see mode," he says.

Also in wait-and-see mode is Stefan Montgomery, a South Carolina family practitioner who is not rushing into practice or hospital partnerships just yet as he isn't sure there is anything to rush into right now.

"There is not much to do until you see the final rules [from federal agencies]," he says. "Until you have the rules in place, you don't know how to play the game."

And internist and New York solo practitioner Jef Sneider supports the majority of initiatives under the healthcare reform law, even though it likely means the end of the way he currently practices medicine.

"By 2014, I probably won't be in private practice anymore," he says. "I suppose, in one way or another, I'll be working for someone else in a few years."

Thus is the state of many physicians today with changes under federal health reform looming on the horizon.

The Affordable Care Act, signed into law in March 2010, has provided physicians with a year-by-year series of initiatives impacting their patients and their practice. But with some changes years away and others yet to be defined and/or relying on shaky federal funding, it can be difficult for physicians to truly plan ahead.

But there are things you can do today to plan for tomorrow, say our experts, as one thing is definite among all the uncertainty: Change is coming.

The end of today's practice

With 2015 set as the unofficial finish line for a variety of reforms under the Affordable Care Act, those monitoring the changes closely say no matter what, the way you operate your practice today will not be the same in four years.

"Fundamentally, in the future, it will not be feasible for practices to look and operate the way they do right now," says Emad Rizk, MD, president of McKesson Health Solutions.

Rizk says one hurdle to continuing your current operations is increased competition from the new players in your market - for example, hospitals that are acquiring physicians' practices. As these forces consolidate operations, they will have "a much more prominent presence" in your area, he notes.

And the reason for this consolidation lies in medical homes and accountable care organizations or ACOs - cooperative initiatives to streamline care. These new care teams are also accompanied by more complex reimbursements to pay members. One such initiative is "bundled payments," slated to begin in 2013, where fee-for-service payments make way for a flat rate for an "episode of care" by hospitals, doctors, and other providers.

"This is going to become just overwhelming to an individual physician's practice," Rizk says. "If we think it is complex now, it will become even more so."

Perhaps a little more optimistic is David Howard, an associate professor in Emory University's Department of Health, Policy, and Management. Howard says he is unsure if independent and solo practices can survive, as it will depend largely on initiatives yet to be defined under the Affordable Care Act.

First is how the Department of Health and Human Services, the key regulator of the law, "wields its power," Howard says. The law clearly pushes greater links between physician groups and hospitals, but it is still unclear how the federal government will let the two interact outside of formal employment agreements. Will a hospital be able to forge business relationships with private practices that it does not own?

"If the regulations are favorable … in that they allow hospitals, physician groups, and others to collaborate outside of those employment ties, then perhaps independent physician groups will be able to survive," Howard says.

While the waiting game continues, the future of today's medical practices also lies with those who run them.

Kip Piper, a senior consultant with Sellers Dorsey in Washington, D.C., says it is clear practices have to change, but their attitude toward change is also important.

"Can a practice stumble along and continue as they have been operating? Probably. But that will have consequences," he says. "It will have the consequences of lower reimbursement, lost business, the potential of losing patient volume, and others."

Piper warns physicians not to mistake the Accountable Care Act for a fad or a simple policy change. The law and its initiatives are a major shift in the nation's healthcare system and cannot be ignored.

"You have to understand what we are seeing, what we are experiencing now is very different in what we will have after we go through all of these changes," he says. "The systems of care, the approach, the marketplace itself, the role of physicians - and that of patients, health plans, and the government - will be fundamentally and forever changed."

The ACO and physician independence

Of the myriad of changes under the Affordable Care Act, perhaps the one at the forefront of practice-based contemplation right now is the ACO.

While CMS has yet to issue its final rule on what these integrated health systems will truly look like, the basic premise is that hospitals, physicians, and others would join together to coordinate patient care. If they do a great job in reducing medical spending, they'll keep some of that savings.

Many physicians like Boyd love the premise, but don't have much more to go on at this time.

"Practices, especially the private ones, may be in a rush to get their ducks in a row when they don't exactly know all the intricacies of making that happen yet," he says.

Roland A. Goertz, president of the American Academy of Family Physicians, says that the potential impact of ACOs is already being felt among the organization's more than 94,000 members.

"A lot of the anxiety and concern I hear is driven by the fact that larger organizations may be, for lack of a nicer term, taking advantage of that anxiety and saying, 'You better join us now or you won't have a future,'" he says, defining "larger organizations" as hospitals and larger physician groups.

Having met directly with CMS officials regarding the future structure of ACOs, Goertz says he has "gotten assurance" that "all practice types will and should be able to survive in this model … as it will be more market driven."

Rizk agrees and reminds physicians that no single ACO model will emerge, so focusing on what that model might be is not an effective use of time, in his opinion.

"Many are looking at their geography, their local regional area, and asking what the definition of ACO is for their area," he says. "…I think what the hospitals are doing is that they would like to ensure the physicians are there because that is the feeding system or referral system to the hospitals. That’s why we've seen a great deal of movement in terms of the purchase of practices and I think that will continue."

Piper says when it comes to any kind of power play now for future ACOs, it actually lies with physicians.

"Everyone - including me - is telling hospitals and health systems that you have to work with your physicians as it is absolutely critical," he says. "You won't be able to know what you need in order to improve performance and ultimately receive the savings … or even provide 'accountable care' without physicians. You can't do it."

Michelle Mudge-Riley, president of career guidance firm Physicians Helping Physicians, says ACOs do grant physicians an incredible opportunity for healthcare leadership, but also come at a price.

"I see ACOs increasing quality and decreasing utilization for sure," she says. "But I think health reform is going to really endanger physicians' practices. The push towards quality, efficiency, decreased utilization, and performance guarantees and measures are all coming together and are really going to make it impossible for a solo practitioner to make it."

Prepare today for tomorrow

So a major change in the way you run your practice is coming. But how do you prepare for the unknown? Simple, say our experts: Start with what you know best - your practice.

Understand your own performance. There's a lot you cannot control under health reform, so focus on what you can control. Piper advises getting clarity on where your practice stands today before panicking about tomorrow. Monitor a few key indicators of your clinical, economic, and patient performance. Then, see how you compare against some other practices in the same specialty and in your marketplace. "The problem that most physicians face … is that you run into two fundamental problems - you can't fix what you can't see and you can't manage what you don't count," he says.

Practices that are in the habit of paying close attention to their business fundamentals will "be better positioned for whatever happens," says Goertz, who practices in Waco, Texas. "Worrying too much about the outside when we don't know what the rules are going to be or what the market forces will be will deter you from the task that will prepare you the best - running the best practice."

Embrace technology. Chances are you are somewhere between "still considering implementation of an EHR system" to "cashing your first incentive check from the federal government" on the meaningful use spectrum.

Don't just look at technology as "something mandated on high," Piper says, but instead as a useful tool for your practice's future.

"Look at it as you would look at a new drug … a new medical device, or even your prescription pad," he says. "It is a means to an end. It facilitates something."

Although it is the economic stimulus package that supplied incentive dollars, EHRs are also promoted under the Affordable Care Act as a key way to reduce paperwork, administrative duties, and hopefully medical errors through better communication.

"If a practice is small or a solo practice without being technology enabled, without being a virtual part of the larger network, those practices are pretty much doomed in the long run," Piper says.

Young notes that Piedmont Pediatrics is dedicating so much effort to EHR use - both for its own benefits and "to be a good corporate citizen here" - because it's doing its best to become a link between the local hospital system and the residents of the area.

Rizk adds that even if deploying new technology like an EHR results in a revenue decrease this year, it will help you in 2012 and beyond. This goes back to assessing your practice and how it operates, he says.

"[Practices] need to start looking at their infrastructure and figure out how, in the next year or two, how they can automate as many processes as possible," he says. "That is the only way to do it. …If everything they do is manual, they will see an erosion of margins."

It's all about service. Yes, you went to medical school to heal your patients and keep them healthy, but don't forget there is a service side to your work as a physician as well. Take a closer look at your practice in terms of the services it provides - everything from making appointments, ease of access for patients, and even how your office looks.

Don't forget, with a large number of newly insured patients comes a change to your local marketplace, so it is important to stand out, Piper advises.

"When you are ultimately going to be competing against more consolidated or 'integrated' models of care and those will have the infrastructure to have cleaner, better, bigger, and brighter offices, you have to say 'What can I do?'"

Ask the customer. Use patient surveys as one way of gauging patient opinion about your service and your staff. And have someone talk to your patients to hear firsthand how they would be more comfortable, what they need when they come to see you, and what you could change. Piper notes this can range from more comfortable seats in the reception area to Wi-Fi. Again, he says, don't forget you are providing a service.

Many of the provisions in the Affordable Care Act are geared toward improving care for patients with chronic conditions. Be a leader in that effort and you'll be rewarded, says Howard.
This could be through programs like the Community-Based Care Transitions Program (funded and organized by CMS) for hospitals and their community partners help high-risk Medicare beneficiaries avoid unnecessary readmissions, in part through connecting them to community services.

"Practices who figure out how to successfully manage those types of patients and figure out how to prevent hospitalizations will be in the best position to take advantage of the new incentives under the law," Howard notes.

Build relationships with those around you. Yes, you can sell your practice to a hospital or larger practice, but that isn't the sole way to find strength in numbers, our experts say.

Rizk advises building a strong network with other physicians to see what they are doing and thinking. Physicians haven't always been great at congregating to discuss their industry, but with reform on the horizon, now is the time to hone your networking skills.

"Physicians, especially in their regional areas, should get together more often and discuss these emerging issues that are impacting them," he says.

Take advantage of whatever networking opportunities for physicians already exist in your area, whether through a professional society or something less formal. If nothing exists, consider creating your own group. Gather up professionals from your ZIP code who are experiencing the same large scale and local market changes. Share best practices when it comes to payer relations, cost-saving measures, managing chronic patients, and other areas.

"Have that strategic discussion of, 'We don't have to merge and become partners, but maybe there is a way to become just colleagues without having a major financial agreement,'" Rizk says. "Or maybe you do want to unite and sell to a hospital or become a big, multi-specialty group. The point of the matter is you should build a network around you as much as possible."

In his Syracuse, N.Y., solo practice, Sneider says he is turning to another group of experts for help - those at his local Regional Extension Center. Created under the American Recovery and Reinvestment Act, the centers aid local physicians with health IT-related issues. The center can assist him with such varied issues as a problem with his EHR or helping him meet pay-for-performance benchmarks under Medicare's PQRI (now called PQRS) initiative.

"This is the first time I've gotten to the point where there was something I couldn't do on my own," says Sneider, who has owned his practice for 17 years. "I've been running very easily and nicely … but with all these big programs, it is increasingly difficult for doctors who are not part of groups or part of a network to keep up with what is going on and I think it is going to get worse."

Goertz advises physicians to get to understand their market. He says there is a place for all practices, especially in a nation facing steep physician shortages.

"I think the changes that are happening give us an opportunity … to really sort of rebalance our healthcare system for the future where there is a good foundation of primary care and an appropriate balance of specialty care and tertiary care elements so that we can create this coordinated, highly efficient system for the future," he says.

Want to know exactly what's coming year-by-year when it comes to the Affordable Care Act? See our health reform timeline in the "Tools" section of PhysiciansPractice.com.

In Summary

Trying to figure out the future of your practice under federal health reform? Start with what you can do today:

• Take the pulse of your practice. How is it performing? Is it staffed properly? Are you achieving patient satisfaction?

• Use technology as a tool. Yes, EHR systems and other information technologies can be expensive and cumbersome to implement, but remember the end goals of streamlining service and accessing incentives.

• Focus on service. Patient satisfaction will be key to attracting newly insured patients and keeping current ones relying on you for care.

• Network with colleagues. Your area is full of physicians and other healthcare providers. Find out together what works, what doesn't, and whether you will approach reform united but still independent.

Keith L. Martin is associate editor at Physicians Practice. He can be reached at keith.martin@ubm.com.

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