Managing the uncertainty of health system reform (MGMA annual meeting)

When several hundred members of the Medical Group Management Assn. -- historically an organization of people running small to midsize medical groups -- were asked whether they were working in private practice, only about half attending an educational session at the organization's annual meeting Oct. 23-26 raised their hands. The others in the room represented practices owned or run by hospitals.

Marc Halley, president and CEO of the Halley Consulting Group in Westerville, Ohio, then asked how many were at a private practice where a physician has contemplated selling or moving on to work for a hospital. About half of those in a private practice still had their hands up.

"Next year there will be more hands," Halley said.

He then asked audience members to raise their hands if they know exactly what is going to happen with health system reform. Silence. No hands went up.

Medical practices are under a great deal of strain from declining payments, escalating expenses and declining patient volumes. Patient numbers may shoot up, because as baby boomers age, the newly insured enter the system because of health reform -- or they may not, because of escalating out-of-pocket health costs. Practices are trying to prepare, but none can anticipate what they are preparing for.

"There are lots of changes happening," said Kenneth Hertz, principal consultant with MGMA Health Care Consulting Group. "The problem is that we don't know what these changes really look like. Each practice has a different ability to negotiate change. It's going to be hard, and people are going to be stressed."

The Centers for Medicare & Medicaid Services on Oct. 20 released the final rule for accountable care organizations to participate in Medicare's shared savings program, but there are a number of facets of the Patient Protection and Affordable Care Act that have yet to be settled.

Practices are asking how they can meet greater patient demand expected from a population that will get older and sicker just as millions of previously uninsured Americans gain coverage in 2014, all while physicians are in short supply. That's assuming those patients will come in the first place; in recent years, patient volume has declined in large part because of the economy, and a turnaround that was expected by now hasn't materialized.

"Nobody knows. Everybody is waiting to see," said Anders M. Gilberg, MGMA's senior vice president of government affairs.

Uncertainty is expected to remain intense for the immediate future, but experts have several recommendations that can help medical practices continue ticking, prevent anxiety from disrupting operations and keep physicians focused on patient care.

They all say the first step is to communicate as much as possible with staff.

"You need comprehensive communication," Hertz said. "We can help people get through change by helping them."

In addition, it makes the most sense to prepare for what is most likely to happen.

"We have got to be ready for three things: reduced reimbursement, increased costs and increased demand," Halley said. "It's a perfect storm."

Practices have become good at controlling costs. The cost of operating a practice declined 2.2% in 2010, according to MGMA data released Sept. 20. An informal survey of 59 participants on the listserv of MGMA's primary care assembly revealed that only 12% of respondents said increasing expenses were their biggest concern.

Declining reimbursements were a larger issue, with 39% saying those were their biggest concern. About 56% said the chances of a Medicare cut were high or very high; a cut of 27.4% is on the table for Jan. 1, 2012.

Experts called on practices to avoid any alignment strategies where any party loses money. Hospitals are buying practices and employing a growing number of physicians, for example, but many of these deals are not profitable and can jeopardize longevity, at least initially. There are many other workable alignment strategies, experts said, including co-management agreements, joint ventures and other arrangements that link the entities but give practices more control or independence.

"Don't go into win-lose scenarios," Halley advised. "They're not sustainable. Establish governance that is based on sustainable models with groups of physicians coming together, or groups of physicians and hospitals coming together."

People running medical practices suggest structuring physician compensation to incorporate bonuses requiring the meeting of quality metrics. These are increasingly common. Various aspects of health system reform -- such as Medicare shared savings -- base reimbursement on meeting quality measures. Shifting physician compensation in this direction is a way to prepare for this.

"You need to stay ahead of the curve," said Wendy C. Elliott, executive director of Pickaway Health Services in Circleville, Ohio. "Quality incentives are where things are going."

There are already concerns about how physicians are handling the stress of uncertainty. Sessions on disruptive physicians have been held at numerous MGMA meetings, but this year's attracted a standing-room-only crowd.

"I'm surprised at the turnout, but it's not OK to just look the other way and hope it's going to be OK," said Alan Rosenstein, MD, medical director of Physician Wellness Services in San Francisco, which provides stress management services to doctors. Dr. Rosenstein helped lead the session on handling disruptive physicians.

"Some people think yelling and screaming is OK as long as you didn't punch the person. Physicians and others need to understand that that is not true," he said.

Presenters warned against punishing physicians for their bad behavior. Rather, any disruptive action and the effect it has on staff and patient care should be pointed out. A study Dr. Rosenstein wrote and published in the August 2008 Joint Commission Journal on Quality and Patient Safety found that disruptive behavior damages staff morale and reduces communication and collaboration. Counseling and coaching may help the individual, and a wellness program geared for physicians may be of assistance. Linking physicians with a mentor also may improve the situation.

"Doctors don't reach out for help," said Michelle Mudge-Riley, DO, a physician consultant and career coach in Richmond, Va., who helped lead the session on disruptive physicians. "They don't know that they can reach out for help. They use alcohol or drugs to get through it. Some of them leave their organizations, or they leave medicine entirely. Helping doctors be aware of their personal wellness is a simple way to start. Physicians are trained to talk to patients about this, but they're not trained to look after their own wellness."

Practices may want to look at the company's culture or how the practice is set up to determine whether something needs to be changed. For example, do patients flow through the office smoothly or is the process frustrating for all involved? If the practice has an electronic medical record, does it work well?

"With 99% of disruptive individuals, there is a disruptive organization," Dr. Rosenstein said. "There are always organizational issues that need to be addressed."

Practices that do not address this issue risk staff turnover and increased cost of patient care, experts say. This is considered particularly important, because so much of health system reform is focused not just on improving quality but also cutting expenses through programs such as bundled payments.

"There's growing complexity in health care," Dr. Rosenstein said. "Twenty different providers are touching one patient. We need to be able to communicate with the other members of the team."

Experts say that despite the best efforts, physicians and others at medical practices must accept that change will continue, uncertainty will remain and sometimes the chosen response will not always help. This will be true even if communication is clear, alignment strategies are strong, physician compensation is well-structured and disruptive behavior is addressed.

"It's not going to be perfect the first time," MGMA's Hertz said. "The rules will change. People will change. The environment will change. Things are changing constantly."