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Trendspotter: Hold Onto Your Hat in 2011, It’s Going to Be a Wild Ride


The old order is fading and a new order is starting to take its place. That new environment will reshape medical practice in ways that can be only glimpsed at present. But here are a few predictions for 2011.

It’s been a very interesting year for doctors, to say the least. Highlights included the passage of the Patient Protection and Affordable Care Act; CMS’ adoption of the final rule on showing meaningful use to get government EHR incentives; and a last-minute, one-year reprieve on the scheduled 25 percent cut in Medicare payments. So what does it all mean?

What it means, in short, is that the old order is fading and a new order is starting to take its place. That new environment will reshape medical practice in ways that can be only glimpsed at present. But here are a few predictions for 2011:

More physicians will go to work for hospitals. AHA statistics indicate that hospitals already employ nearly 200,000 physicians - or roughly 30 percent of the workforce. That percentage will increase as hospitals try to align more closely with doctors, both to fend off competition and to prepare for new reimbursement methods that will emphasize care coordination.

Some physicians will form their own organizations. By that, I don’t mean a groundswell in large multispecialty groups. Instead, some private-practice physicians will try to retain their independence by forming IPAs or reviving physician-hospital organizations. If these doctors can integrate clinically with their colleagues, they’ll be able to bargain with payers for higher rates. They’ll also be well-positioned to form or join accountable care organizations (ACOs).

Payers will emphasize patient-centered medical homes. Some health plans and employers view this trend as a promising way to improve quality and control costs, and they’re providing financial incentives to medical homes. As a result, more and more groups are seeking and obtaining NCQA medical-home certification. It’s difficult for small practices to become medical homes, but some have, and more would if they were paid for care coordination.

The EHR adoption rate will rise. Despite substantial government incentives that begin in 2011, the bulk of physicians aren’t yet rushing to buy EHRs. But a confluence of factors may change that over the next few years: The Health IT Regional Extension Centers will start to help more small practices choose and implement EHRs. Federally funded state health information exchanges will help build the infrastructure needed to exchange key patient data. The spread of medical homes and the emergence of ACOs will create an urgent need for electronic data. And patients will demand that their physicians go online with them as their use of the new mobile technologies explodes.

In-office use of advanced imaging devices will decline. The Deficit Reduction Act of 2005 and the Affordable Care Act both took a whack at physician self-referral to in-house imaging facilities. The reduction in Medicare fees for the technical component and some other restrictions have already had an impact on advanced imaging, which is an important revenue source for one in six physicians. Chances are good that the government and private payers will restrict self-referral revenue even further, not only because many tests are unnecessary but because this is low-hanging fruit for cost-cutters.

Medicare will start to phase in payment bundling. The ACA authorizes a demonstration of payment bundling. Unlike past Medicare pilots, this one can be converted into an across-the-board policy if it shows promising results. So in the not-too-distant future, Medicare may start to offer bundled payments for episodes of care that include certain procedures and 30 days of post-acute services. This will probably be voluntary at first, and mandatory later. Doctors aren’t thrilled about bundling, but it’s going to happen anyway if it saves money. Moreover, private payers will undoubtedly follow Medicare’s lead. So be forewarned: it’s time to get together with your local hospitals to plan strategies.

There will be intense pressure to cut readmissions. Medicare will reduce hospital payments if they have excessive readmission rates, starting in 2012. So your hospital may reach out to you and your colleagues to do intensive disease management so that fewer patients are readmitted. There’s not much money in this for you - unless the original hospital care is covered by a bundled payment--but it could lead to better patient care.

So there are my good, bad, and ugly predictions for the upcoming year. You may or may not take these trends seriously and incorporate them in your business plans. But it seems clear that physicians who embrace change will be better prepared to roll with the punches as healthcare reform gathers momentum.

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