Physicians: on the payroll
Until a permanent fix is made to the Medicare reimbursement formula, what lies ahead for physicians is unclear. But experts believe change is coming in the way physicians get paid, in the way their relationships with hospitals are structured, and the way they use healthcare information technology.
Sharon Conklin, a vice president at Premier Consulting Solutions, part of the Premier healthcare alliance, says more physicians will become employed by hospitals and health systems, and their reimbursement and incentives will reflect a greater emphasis on teamwork and patient outcomes. She added that this will differ from past compensation formulas, which were driven more by volume than by results.
Ryan O’Connor, vice president of membership and marketing for the American Medical Group Association, calls this “verti- cal integration” and says that, as a survival strategy, practices are working closer than ever with hospitals. But he added that it was a strategy based on providing better patient outcomes rather than just perpetuation of the practice itself.
Physician “groups and hospitals will come together as one system,” O’Connor says, rather than co-existing as two stand-alone entities. He adds, however, that control issues will emerge as doctors seek an ownership stake or a role in governance.
Though O’Connor also says this will come mostly from older physicians, as younger physicians are more interested in a steady, high-paying job and will view being a hospital employee as being little different than being part of a large practice.
A scheduled 21.5% Medicare payment cut for 2010, however, is keeping many people in limbo. “Because physician payment cuts have not been adjudicated, most groups are budgeting for no growth in revenue,” he says.
William Jessee, president and CEO of the Medical Group Management Association, says “there could be a whole lot of scrambling going on” in 2010 to take advantage of subsidies appropriated in the American Recovery and Reinvestment Act of 2009 for the purchase of electronic healthrecord systems and other health IT investments.
“The stimulus effect of the stimulus money is likely to be felt in 2010,” Jessee says. “Frankly, I think it’s going to be difficult for the EMR vendors to keep up with EMR demand.” But, if the Medicare payment formula isn’t fixed, he says practices will be asking “Where am I going to get the money to take advantage of the money?”
Jessee: Look for “the stimulus effect of the stimulus money.”
O’Connor: New pay formulas seen as a survival strategy.