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

In an age of profound change, medical practices look for ways to prevent anxiety from disrupting everyday work life.

By Victoria Stagg Elliott — Posted Nov. 21, 2011

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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."

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What happens if Medicare pay cuts go through?

The Medical Group Management Assn. surveyed 2,176 medical groups representing more than 93,000 physicians who participate in the organization's Legislative and Executive Advocacy Response Network. Of those who replied, 95.3% fully participated in Medicare. Here is how they handled cuts threatened in the past by calculations of the sustainable growth rate formula and how they may respond to potential future cuts.

If Congress does not intervene to avert the Medicare cut, currently projected at 27.4% for Jan. 1, 2012, which of the following actions will your practice take? (Percentage of groups answering "yes")

51.0%: Reduce number of appointments for new Medicare patients

34.8%: Reduce number of appointments for current Medicare patients

30.9%: Stop accepting new Medicare patients

26.9%: Accept only established patients aging into Medicare

9.0%: Cease treating Medicare patients

Has the uncertainty created by annual threats of Medicare payment cuts caused your practice to make any of the following business decisions? (Percentage of groups answering "yes")

64.7%: Delayed purchase of new clinical equipment and/or facilities

60.3%: Expanded revenue from other sources

53.4%: Reduced staff salaries and/or benefits

51.7%: Reduced charity care

48.7%: Reduced number of administrative support staff

39.0%: Reduced number of clinical staff

31.0%: Delayed EMR purchase

23.3%: Delayed e-prescribing purchase

23.3%: Closed satellite office(s)

If Congress does not intervene to avert the Medicare cut, currently projected at 27.4% for Jan. 1, 2012, what business decisions will your practice make? (Percentage of groups answering "yes")

68.7%: Delay purchase of new clinical equipment and/or facilities

67.4%: Expand revenue from other sources

62.2%: Reduce charity care

60.7%: Reduce staff salaries and/or benefits

56.7%: Reduce number of administrative support staff

51.0%: Reduce number of clinical staff

31.6%: Close satellite office(s)

30.0%: Delay EMR purchase

24.1%: Delay e-prescribing purchase

If Congress does not intervene to avert the scheduled 27.4% Medicare cut, what do you expect your practice's Medicare status will be in 2012?

29.4%: Uncertain

27.8%: Some combination of participating and nonparticipating where different physicians have different individual status

26.9%: All physicians will be participating

1.8%: All physicians will be nonparticipating and accept assignment

1.1%: Practice will not accept Medicare patients

0.6%: All physicians will be nonparticipating and will not accept assignment

Source: Medical Group Management Assn., SGR LEARN Results

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Business tips from MGMA meeting

Sessions at the Medical Group Management Assn. meeting addressed ways to help physicians increase their bottom lines. Among the topics:

Dealing with different generations of patients. Medical practices need to know how to relate to patients from various generations to serve them well, according to a presentation by Cam Marston, president of Generational Insights in Mobile, Ala.

Baby boomers, defined by the Census Bureau as born from 1946 to 1964, comprise 24.3% of the population. Generation X, born from 1965 to 1979, are 19.8%, and millennials, born from 1980 to 2000, are 28.8%. Matures, born before 1946, are 12.2%, and the post-millennial generation, born after 2000, are 14.8%. Baby boomer is the only generation defined by the Census Bureau, but other designations are widely used by researchers.

Experts say baby boomers' increasing longevity is leading to increased demand for care that will continue, because millennials and post-millennial generations have come of age expecting certain medical services. That prediction comes despite various studies showing a decline in office visits.

"Just hang in there," Marston said. "We have got an extraordinary amount of patients."

Practices must respond and adapt to each generation's view of physicians and how they want to receive communication from the practice.

For example, baby boomers appreciate being told how the practice will save them time and want as much face-to-face communication as possible. Baby boomers are more likely to heed expert advice. Generation Xers tend toward skepticism and expect input in most decisions. As for communication, Generation Xers prefer email, with text messages acceptable in some situations. Millennials want advice specific to them and prefer text messaging and communication through social media.

"Baby boomers view their experts as shamans and trust their view," Marston said. "The X-ers and millennials are going to want to negotiate. They were raised to question experts. Physicians are going to want to talk to them about all their options if they want to keep these patients long term."

Negotiating with insurers. Analyzing insurance contracts and the history with a particular company should help a practice during negotiations, according to a presentation by Bette Warn, executive director of ATD Resources, a 45-physician group in Denver.

"You need to know where you are and where you want to be when you finish with the negotiation," Warn said. "Contract reading can be really boring, but you need to understand them."

Such an analysis should include what percentage of claims a payer denies, how easy it is to work with the payer, how fast it pays bills and the proportion of revenue it brings to the practice. "If it is a very small membership volume, you may not want to participate with that contract," Warn said.

Collecting from self-pay patients. Practices are challenged by collecting from patients who are paying an increasing amount of money out of pocket for medical services. Experts recommend that practices have a written policy routinely communicated to staff and patients.

"Every time you interact with the patient is a really good time to talk about your policy," said Ellen FitzPatrick, senior product marketing manager with athenahealth, a provider of cloud-based services to medical groups.

Experts recommend analyzing where policy is failing, whether with patients or staff. "These are uncomfortable conversations, but we need to think about ways to support each other," she said.

Experts also recommended calling patients' cell phones when reminding them of outstanding bills, because mobile phones are more likely to be answered. Practices should devise strategies to prevent old bills from weighing down on the books.

"Look at all the A/R older than 120 days," FitzPatrick said. "Send them to collections, or write them off and be done."

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External links

Medical Group Management Assn.'s 2011 Annual Conference (link)

To download MGMA survey of their Legislative and Executive Advocacy Response Network (link)

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