How to carry on in the midst of uncertainty
Healthcare reform is a moving target. Congress and the president had hoped to make a clean break from the past this spring, but were unable to do so.
“We’re going to be living with Obamacare for the foreseeable future,” said Speaker of the House Paul Ryan in late March, following the Republican party’s decision to pull legislation to repeal the Affordable Care Act from consideration on the House floor. Meanwhile, the president tweeted, “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry.”
So where does that leave the rest of us? In the face of uncertainty – either living with Obamacare for the foreseeable future and/or waiting for it to explode – how are providers and their distributors supposed to proceed?
Calmly, suggests Michael Einhorn, CEO, Dealmed Medical Supplies in Brooklyn.
“We’re all trying to speculate,” he says. “Right now, the Republicans control the House; but things will change, and then they will change again. For the foreseeable future, healthcare will be a big item on the national agenda, regardless of who is in control. Adapt. Accept it. Don’t fight it. Don’t get upset. As long as you accept that you have to change, you’ll be all right.”
Too much
Amidst the turmoil in Washington and beyond, a few truths will remain, says Mark Dixon, president of The Mark Dixon Group. “Healthcare costs too much; entitlement reform is necessary. Radically reducing the cost structure and making healthcare more affordable will be a working strategy in any environment.”
Cost pressures will probably only grow, with consequences for providers and their suppliers, says Dixon, a former hospital executive who now serves as a consultant to medical suppliers and integrated delivery networks. Providers, on the average, lose roughly 9 percent on every Medicare patient they treat, according to the Medicare Advisory Payment Commission, he says. If one figures that the Medicare population is only going to expand in the next decade or two, those losses mount. Add in the fact that the Affordable Care Act calls for price reductions for future years, and all of a sudden, private insurers and employers are left holding a pretty big bag.
In response, big, multistate employers will place great pressure on commercial insurers or may contract directly with the country’s biggest health systems to provide care for their workers, says Dixon. No doubt they will demand price reductions from those providers. “So you have huge price compression on the commercial side, which will only add to that on the government side,” says Dixon.
As cost pressures rise, providers and their suppliers will no longer get by simply by doing the same things for less money, he says. “Instead, we have to change the way we do things, by reworking and rethinking what we do.” For example, how can we remove excess capacity from the system, or improve safety and reduce medical errors?
What’s more, healthcare providers will have to adjust themselves to the growing sense of consumerism that is pervading healthcare, he continues.
“Healthcare is getting much more transparent. Much more information is available about price, quality and safety.” Patient experience and satisfaction are a bigger deal than ever, with providers pondering how they can engage people before they become patients, so that the public will want to come to their facilities when they need to, rather than going to them with a sense of dread.
As people face higher copays and deductibles, and face more accountability for their own health, they are going to demand more from their providers, continues Dixon. For example, consumers will prefer doing business with providers who make themselves accessible by smartphone or computer instead of those who insist that patients hop in the car and make a visit to the provider’s office. People want to be able to schedule visits online, and they want to see their provider when it’s convenient for them, at a price that seems reasonable.
Finally, regardless of what happens on Capitol Hill, healthcare providers will have to work with their physicians differently than they have in the past, says Dixon. “Physicians need to be part of the solution, not just bystanders.
“Regardless of whether you’re Republican or Democrat, all of this will keep evolving,” he says. “But where is our true North? We will have to compete by creating a better product, not just getting bigger and leveraging better prices. And ‘better product’ will be clearly defined by achievement of the Triple Aim – improved quality/safety, lower cost, and better patient experience.”
Fear of uncertainty
The greatest challenge or threat facing healthcare providers in the United States may very well be their fear of uncertainty, says Chris Hopkins, area sales manager, north Florida and south Georgia, McKesson Medical-Surgical. Smaller medical practices may bear the brunt of the changes lying ahead.
“Most physicians I talk to want to do one thing and one thing only – practice medicine,” he says. “They want to make sick patients better. That’s why they got into the field to begin with.
“What we have seen take place in the last 10 years is anxiety and confusion about what the ‘rules’ of healthcare are. Many that only want to practice medicine and not have to worry about keeping up with changing and complex rules have given up their autonomy and sold their practice.”
Reimbursement is near the top of their concerns. So is their ability to provide their own staff with affordable healthcare coverage, says Hopkins. “To control costs, they are faced with reducing employee hours or potentially trying to do the same amount of work with fewer employees. The irony here is, most of these businesses need more resources to help them navigate these new waters – new billers, new coders, someone to do claim denial followup and have followup quality-of-care conversations with patients. No question, all of these factors will likely continue.”
In Hopkins’ opinion, regardless of changes on Capitol Hill, four elements of Obamacare are likely to remain in place:
- Continued coverage availability for patients with pre-existing conditions. This will continue to drive patient volume into the physician office, he says.
- Allowing dependents up to age 26 to remain on their parents’ coverage. This too will continue to drive patient volume.
- Continued movement toward a pay-for-quality-outcome versus pay-for-performance/input model. “I find it interesting and troubling at the same time when I hear a doctor tell me that they ‘aren’t worried about MACRA since Obamacare is likely going away,’” says Hopkins. “As we know, the two are not the same, and MACRA is certainly staying put. It puts us as distributors in a sticky position to have to explain the differences.”
- Caps on annual and lifetime limits. This will ultimately keep physicians in the mindset of providing quality care rather than worrying about reaching a financial limit.
But certain things could change:
- The individual mandate could be repealed. If so, doctors could see a reduction in the amount of patient encounters, says Hopkins. “Without insurance, individuals will be less likely to go to the doctor. However, this could lead to a more ‘concierge medicine’ model, which some physicians could find more financially beneficial. Giving patients more control of their plan and their choice could drive traffic in both directions.”
- Limit on health savings accounts could be increased, incentivizing patients to spend time with their physicians. “If more money is being added to the account, that patient may feel inclined to more closely follow a protocol for care, while receiving a tax benefit at the same time,” says Hopkins.
- The long-discussed removal of state lines for insurance carriers could actually occur. “The understatement of the day is that insurance companies and their consumers will play a large part in our physicians’ success,” says Hopkins. “A more competitive landscape in the insurance industry will likely drive down premiums and allow patients the freedom to seek care and be less worried about overcoming large deductibles.”
- The ratio of federal and state spending and control over Medicaid could change. But even if that occurs, primary care physicians shouldn’t be too affected, says Hopkins. “Most doctors I talk to made a decision a while ago to decide how to handle their Medicaid population, with some choosing to eliminate that mix from their practice entirely. I don’t foresee anything coming from changes here that will incentivize primary care physicians to think differently. However, if you’re a physician who owns or practices within a federally qualified [community] health center, the impact here could be massive. Most FQHCs rely solely on federal funding to keep their doors open and expand their offerings. These clinics prospered greatly with the passing of the ACA, as many of them were flooded with the newly insured population.”
Perhaps most important, physicians cannot avoid the movement away from fee-for-service and toward outcomes-based payment, regardless of any modifications to the Affordable Care Act, says Hopkins. “The mass majority of independent physicians are about to go through a compensation change. In my opinion, having an understanding of that piece will be more vital than anything the federal government passes down the line. Their ability to remain independent and grow their own businesses will be dependent upon succeeding through this change.
“From what I’ve seen, a strong need for analytics/data and the ability to access and share those analytics/data when asked, will be crucial,” he continues. “Certainly there are many ways to accomplish that, and a lot of software companies do it very well.
“As a partner in their practice, it is up to me to help them understand how best to maximize their participation in their incentive program and how to provide the best outcomes possible for their patients. I’ve noticed many of our manufacturer partners have begun transforming their literature away from CPT codes and cost-per-test to ‘This is the incentive program that this product qualifies for.’”
Adapt
Among all the challenges facing healthcare providers, perhaps the biggest is their failure to adapt, says Michael Einhorn. By that he means failure to adapt to the rise of consumerism; failure to adapt to new payment models, i.e., MACRA; failure to adapt to technology, e.g., electronic medical records. Take, for example, what is occurring in urgent care.
“Urgent care isn’t higher-quality or better care,” he points out. “But it’s fast, and patients get what they need without hassle or haggling over appointment times. It’s not necessarily about the care, but, ‘I need to get a strep test or flu test, and I don’t want to call up a doctor’s office to see when I can get an appointment.’ This is being driven purely by the consumer. Regardless of healthcare reform, consumerism is going to keep growing, and providers have to have the ability to adapt.”
Example No 2: Referrals. Traditionally, a patient visits his primary care doc, who suggests he see a urologist. The patient consults a phone book or the Internet to see if he can find such a specialist, then phones the office to set up an appointment – but not before learning whether the specialty practice accepts his insurance. Then the patient oversees the cumbersome process of faxing or otherwise transferring his medical records to the new practice. (“Healthcare is the only industry to still use fax,” says Einhorn.)
“Consumers are saying, I’m not going to deal with this,” he says. Instead, they will go to online services, such as ReferWell, to bypass all the hassles.
“This isn’t about healthcare reform; it’s not a political statement. It’s a matter of consumers saying to their providers, ‘We need these things, and if you can’t offer them, we will give our business to doctors who can.’”
Providers will continue to experience cost pressures regardless of what the feds do, continues Einhorn. The implications for the distributor? “Instead of focusing on how much you can save the practice on a pair of gloves, talk about procedures and services that can add value to the practice,” he says. Talk about point-of-care testing and its ability to help the physician provide better care. (It also ties in with the trend toward consumerism.) Talk about products that will bring more patients through the door, or help the practice comply with MACRA.
“At the end of the day, the smart doctors are the ones who are adapting and doing innovative things,” says Einhorn.
“Distributors have a role to play – to make healthcare as efficient as possible,” he says. “But let’s not try to be geniuses. You can talk about healthcare costs all day long. Yes, they can be lowered, but we have to accept as a society that healthcare is expensive. Someone has to pay for it, somehow.
“Predicting the future is silly. Physicians need to be prepared to adapt, as healthcare will constantly be changing.” Distributors can help them do so.