U.S. healthcare is in a phase of extreme complexity. Birthed as a result of skyrocketing healthcare costs, reimbursement (payment) reform is the driving force behind the wave of changes taking place. While healthcare services in this country continue to be paid for primarily in a fee-for-service manner – the more one does the more one gets paid – both government-based insurance (Medicare) and commercial insurance companies alike are gradually implementing variations in the way they reimburse healthcare providers for medical services. Examples include quality and outcome-related bonuses; performance-based payment modifiers; shared cost savings agreements, such as the formation of Accountable Care Organizations (ACOs); population-specific pre-payments; and financial penalties for non-compliance. Small, independent medical practices are finding themselves unable to comply with the myriad of new payer regulations and requirements due to the lack of manpower, resources, and time. However, even large healthcare systems are not immune to the challenges that come along with reimbursement reform, particularly on the primary care side, and being equipped for the years ahead is a proving to be difficult for all. In order to maintain favorable profits, both small medical practices and large healthcare systems are navigating this current by choosing one of three common pathways:
Option 1 – play the game. It is not surprising that only large integrated delivery systems (or healthcare networks/systems) and practice associations that possess robust, integrated electronic medical records and massive administrative forces are best able to comply with new, changing regulations and its considerable subsequent overhead costs. This is essentially why you have seen long-time community physicians become traditional employees of large healthcare networks. All over the country, hospitals are merging; what equates to healthcare system “franchises” are popping up in office parks and strip malls; and large healthcare systems are amongst the largest employers in metropolitan areas.
Option 2 – charge an administrative fee for all patients. Uncommon at the moment, this is something that may become popular in the coming years, particularly amongst reputable, high-performing healthcare systems with strong name recognition.
Option 3 – work outside of the system. This is the basis of concierge medicine and other subscription-based practice models. Under such models, physicians accept a small select set of patients, who pay up to several thousand dollars annually for more individualized attention; improved physician access; and nontraditional, yet popular, health services such as health coaches, fitness assessments, nutrition consultations, chef demonstrations, spa-like amenities, and office bells and whistles. Concierge and subscription-based practices yield high praise from its physicians, who consider themselves free of bureaucracy, and from consumers with considerable disposable income, but this model is obviously not for everyone.
Over the last several years, the St. Louis market has seen a lot of shifting, moving, and musical chair playing amongst physicians, making it difficult for patients to find and stick with a preferred provider. This unfortunately is a trend being experienced all over the country as physicians look to find their place in a new, fluid system. I hope that some stability is in sight as physicians chose which way to best weather the storm. And, hopefully, you can understand why it is difficult to find and keep a good doctor.
Kenneth G Poole, Jr, MD, MBA is a senior associate consultant at Mayo Clinic Arizona in the Division of Community Internal Medicine. He previously practiced internal medicine in St. Louis.
