Steering in troubled waters
Medical group managers face raft of tricky issues in down economy
Istarted my work as the new president and CEO of Medical Group Management Association and the American College of Medical Practice Executives about a week ago. What better way to hit the ground running than by attending the MGMA’s annual conference in Las Vegas this week. I feel fortunate as I take the helm of the associations to see our members in person in my first weeks of employment.
As I’ve been connecting with members, I’ve sensed the pressure they are feeling from the changing healthcare environment. They describe their plates as already full as they are tasked to adopt new information technologies and implement new business processes to accommodate health reform, all the while ensuring that their practices run in the most efficient and effective manner possible. This stress also was present in 2005 when I was the chair of the MGMA board of directors. Then, too, our members faced cuts to Medicare physician payments, but I would have never imagined our members would be facing an almost 30% cut today. Our members look to the MGMA and ACMPE to act as a lighthouse amid all the burdens they must overcome to run an efficient medical practice. We’ve been diligent about letting them know what they can be doing today to help ensure their practices are as healthy as possible tomorrow. Here are a few of our recommendations:
Create a contingency plan for potential Medicare physician payment cuts. Many practices are bracing for these potential cuts and are trying to quantify the impact. Practices also need to scrutinize commercial contracts where reimbursement is directly tied to Medicare rates. Many practices already have cut their operating expenses as closely as they can. According to the MGMA’s Cost Survey, medical practices cut operating expenditures 2.2% in 2010 as they anticipate a potential cut to payments.
Create a strategic plan for your organization. Many practice leaders are facing critical strategic decisions: Join an accountable care organization? Sell to a hospital? Merge with other practices? Go it alone? A planning process can provide direction even though the conclusion may be, “We’re comfortable staying as we are for now.” Planning will require some effort, including potentially hiring an outside facilitator and using evidence and data to drive these decisions. The plan should con- records under the stimulus act.
Create or update your disaster plans. This past year’s horrifying tornado in Joplin, Mo., and other natural disasters remind practice leaders that we need to be vigilant. Practices must understand their role following a natural disaster and how to protect their businesses as well as care for and protect their communities.
Prepare for a value-based approach to contracting. Although we have some idea of what value-based contracting looks like, there remain many unknowns. As these waters become less murky, we are working diligently alongside our members to help lead this massive change. You can start preparing your staff to track and report on a variety of quality and utilization metrics. Be prepared to deal with a variety of both fee-for-service and value contract combinations.
Hire a credentialed, professional medical practice leader to help the practice have the best chance in this tough economy. Medical groups must contend with overwhelming administrative complexity and regulation with the end goal of providing a safe, satisfying patient experience and helping the practice to succeed. A certified practice leader with reputable credentials, such as the certification and fellowship program by the American College of Medical Practice Executives, can give a practice the best chance of success in this difficult marketplace.
Measure your practice against industry standards and know what indicators to watch. Frequent benchmarking to appropriate and meaningful standards takes on greater importance as reimbursements stagnate or decline. The successful practices will recognize and react quickly to adverse financial trends.
I look forward to working with our members and industry colleagues to face down these challenges, and to take advantage of all the opportunity for growth and innovation to help improve our healthcare delivery systems.