Top 10 challenges facing physicians in 2014
Every challenge is an opportunity.
And while this list of 10 challenges facing physicians seems daunting and nearly insurmountable for smaller office-based practices, many believe there is tremendous upside for primary care physicians in leading healthcare delivery in the United States in 2014 and beyond. The result could mean more autonomy; it could mean better quality of life for you and your patients, and hopefully result in less interference with the doctor-patient relationship.
But it’s going to take work, management experts say. Physicians will need to reinvent their operations to create efficiencies and thoroughly evaluate the revenue cycle to maximize cash flow. That means you will need to review payer contracts, and look at adopting technology to improve patient care. You may have to re-engineer workloads, workflows and staff responsibilities.
It is this premise that Medical Economics is showcasing with this list of 10 challenges and opportunities facing physicians next year. We believe that understanding the dynamics of a changing market will ultimately help physicians shape it, adapt to it and succeed.
Over the course of this past year, we have learned through interviews and surveys that you find tremendous professional satisfaction from helping patients improve their lives. In fact, it continues to be the reason you entered medicine, and the reason you will stay. At the same time there are trends outside of this relationship that are interfering with your time with patients and continually threatening the economic viability of your practice.
Healthcare is in the throes of great change. And history has shown that large-scale disruption incubates innovation. Our collective opportunity as a healthcare profession is to build a stronger healthcare delivery system rightfully led by primary care that seeks to remain cost conscious, efficient in its delivery, and fairly compensated for helping people attain the most precious commodity of all—a healthy life.
—Daniel R. Verdon
Challenge #1: Payment for medical services
ACA and changing payment trends
Healthcare’s ailing reimbursement system will likely take a turn for the worse in 2014, before it recovers.
And while 2013’s payment structure seems dehydrated to many physicians because of tighter negotiated payments by health insurers, escalating costs of doing business, and the seemingly endless cascade of bureaucracy tied to payments, some believe relief won’t be felt for the cadre of U.S. physicians in office-based practices for some time.
Why? Healthcare is in the midst of transformational change in the way it is financed. Fifteen of the 16 key provisions of the Affordable Care Act (ACA) will take effect in 2014, and they will most definitely impact the numbers of patients you see and the way you are paid for medical services.
Despite the flawed rollout of the insurance exchanges this fall, coverage for new health insurance enrollees begins on January 1. The new law stipulates that insurance companies cannot drop coverage based on pre-existing conditions. For states that have opted to expand Medicaid, that coverage also begins in January.
While more people are reportedly enrolling in the exchanges, U.S. residents will be required to have qualifying health coverage or face financial penalties. Wellness programs allow employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards. The ACA also creates a 10-state pilot program (by July 1, 2014) to track and monitor successes.
On March 31, the insurance exchanges close for 2014 enrollment, and we will have a barometer to gauge how many newly insured Americans entered the market. Data related to physician payments for services by health insurers will also offer another indicator.
Here are some of the keys to watch for next year.
The narrow networks squeeze
Payers are consolidating networks and repositioning in markets as a result of the ACA. We saw the results play out from October through December as physicians received termination notices from key health insurers in more than 10 states regarding network consolidation for Medicare Advantage. (See related story, p. 37.) These moves have impacted thousands of physicians and patients, and this trend may not go away anytime soon.
Narrow networks are believed to offer payers more bargaining power in negotiating contracts with providers and lowering costs of care. Narrow networks also limit choice for patients with a smaller pool of providers and hospitals.
Quality and quantity
The year 2014 will be about cost control, says a recent report from consulting giant pricewaterhousecoopers (PwC) titled “Medical Cost Trend: Behind the Numbers 2014” despite one of the greatest healthcare insurance expansions in history. “For an industry that until recently had consistently seen double-digit growth, the ongoing slowdown poses immediate financial challenges. At the same time, the imperative to do more with less has paved the way for a true transformation of the health ecosystem, from fee-for-service medicine to consumer-centered care that rewards quality outcomes,” PwC says.
Traditional fee-for-service is moving toward a payment structured leaning toward compensation based on outcomes. And many variations will likely surface. Models that will be further developed include:
- bundled payments for services,
- (and in some cases bundled payments for multiple providers),
- episode of care,
- (providers paid to treat a specific condition over a period of time),
- Physician Quality Reporting System (incorporating quality metrics),
- shared savings programs
- (physicians split savings with the insurer), and
- Patient-Centered Medical Home
High-deductible health plans will also pose business challenges for most practices and will require a more aggressive collection policy at the time of visit. PwC estimates that employers offering high-deductible plans as their only option has grown 31% since 2012.
And while the predictions sound dire, there are plenty of opportunities for primary care to assert its leadership, showcase its status as a relative bargain among healthcare providers, and advance its mission to experiment with direct pay, ancillary services, and team up with employers and insurers to capitalize on innovative wellness programs to improve the health of your patient population and the practice’s bottom line. Primary care will need to reinvent its services to patients, reassess its use of technology to better monitor population health and engage patients in new ways.