Facing a reckoning on physician compensation?


Doctor salaries have shot up 30% in past decade over fears of ...

As health systems take tentative steps to resume non-emergent procedures and office visits, it’s increasingly clear that volume will not quickly return to pre-COVID levels. According to a health system chief physician executive we spoke with this week, this has forced medical group leadership to reevaluate physician compensation, at least for the rest of 2020.

“We’ve kept our doctors pretty much whole for the past three months,” she said, “but given the losses we’re facing for the rest of the year, we can’t keep it up much longer.” We’ve had a flurry of calls in the past two weeks with systems in the same position. Most of their doctors are primarily paid based on their productivity. “We all loved the upside opportunity,” mused one physician leader, “but we never thought something could happen that would completely wipe us out.”

This point got us wondering whether we might be seeing the beginning of the end of RVU-based physician compensation, as physicians seek greater stability and safety. But moving to a salary-driven model is far from easy. How much upside are doctors willing to trade off for security? The survey data used to benchmark compensation, based on last year’s business model, is essentially irrelevant—and likely will be for next year as well. According to one consultant, “Given that there’s no consistency in volume or compensation strategy, the 2020 data will be garbage, too.” Not to mention, dramatically shifting the way doctors are paid has huge cultural and operational ramifications.

There are no easy answers, but we think this conversation about the future of compensation, and the larger issues it raises about doctors’ relationship to, and role in, the health system, is long overdue. One executive shared his system’s plan to pay their doctors 85 percent of their 2019 compensation through the summer. He’s not sure yet what the other side of August looks like. “Maybe we’ll have physicians who want to continue to be paid on productivity like a car salesman. But if you want that kind of upside now, the safety net likely won’t be there the next time.” However, he hopes this experience “provides a reset point that gets us to a more sustainable—and professional—way of working together for the future.”  





Consumers trust providers but aren’t hearing from them


Last week, we reported that consumer healthcare confidence is down—it’s unclear when people will feel safe enough to return to reopened care sites. Recent polling data provided by our friends at Public Opinion Strategies, and detailed in the graphic below, shows that direct provider communication is crucial to reengaging patients and rebuilding their trust in seeking care.

The majority of Americans receive health-related information from news media outlets, but only 18 percent say they regularly hear it from their doctors or providers—yet 66 percent of Americans view doctors and providers as highly trusted sources of information. Consumers are looking to providers to demonstrate and communicate a commitment to safe operations that are as “COVID-free” as possible.

In particular, many patients would feel safe returning to a healthcare facility if their doctor assured them it’s safe to go. Health systems are taking myriad steps to provide COVID-safe care—staggering appointments, eliminating waiting rooms, screening temperatures upon arrival, providing masks, enhancing sterilization and testing at-risk patients—more communication about the specifics of their efforts, directly to patients, will be vital to restoring consumer confidence. (See more survey data gathered by Public Opinion Strategies here.)





Now Is the Time to Address Surprise Billing


Tips to avoid surprise medical bills

The doctor-patient relationship is being undermined.

Private equity companies have spent millions in dark money to stall and effectively kill all versions of surprise billing reform. But this week, the issue will come before Congress again. Legislation was introduced Tuesday in the House that, among other things, would further assist hospitals with more relief funds. With this potential third disbursement of federal dollars comes an opportunity to finally address the embarrassing problem of surprise billing that has eroded the public trust in our great medical profession.

Physicians across the country are now signing a letter urging leaders of Congress to address surprise billing once and for all. I have already signed this letter and encourage you to consider doing so as well.

One reason the medical profession is the greatest profession in the world is that patients put their faith and trust in us. But 64% of Americans now say they have avoided or delayed medical care for fear of the bill. As more and more patients lose faith in the system, the doctor-patient relationship is being undermined by surprise billing and the modern-day business practices of price gouging and predatory billing. In fact, these egregious practices have become part of the business model of some private equity groups, which seek to replace physician autonomy with corporate medicine.

Our system today is unnecessarily complicated and works against patients’ interests by putting them in the middle of a finger-pointing blame game, which leaves them holding the bag. It doesn’t make sense for us to accept people with open arms, treat their ailment, and then ruin their lives financially. Medical science is a bastion of scientific and intellectual genius. We can fix this problem. Already, some efforts are advancing price transparency by creating a transparent marketplace for patients.

I’ve spent many years looking at the systematic cost issues that face our health system and patients. Simply put, the lack of fairness and transparency in pricing and billing practices has created financial toxicity and increased the general mistrust of the medical system for millions of Americans. No one designed it to be this bad. In fact, we have good people working in a bad system. When I explain details of pricing, billing, and collections with doctors and hospital leaders, they are invariably shocked and furious to learn how out of control their billing offices have gotten in overcharging patients and shaking people down for more than a reasonable amount for a service.

The current COVID-19 crisis is a stark reminder of the gaps in our health system that exacerbate the pressures facing providers and patients. Many Americans are getting crushed right now. Despite many years of debate in Washington and bipartisan agreement that something must be done, there is still no federal protection in place to safeguard consumers from an egregious surprise medical bill if they need emergency care or have limited options. The reality is that special interests — including the very private equity firms that stand to benefit financially from these exploitative business practices — continue to spend millions to maintain the status quo.

It’s time for a bipartisan compromise to end the non-transparent game of surprise medical billing. It’s time that Congress takes meaningful action to protect patients during this COVID-19 crisis and finally address this issue. Congress has solutions on the table that would bring much greater fairness and transparency to the healthcare system, protect patients from these predatory charges, and ensure that physicians are paid fairly for our services, as we deserve. It’s time we put an end to the cycle of financial toxicity and rebuild the great public trust in the medical profession.





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Doctors Without Patients: ‘Our Waiting Rooms Are Like Ghost Towns’

18 of the Spookiest Ghost Towns in America - Most Haunted Places

As visits plummet because of the coronavirus, small physician practices are struggling to survive.

Autumn Road in Little Rock, Ark., is the type of doctor’s practice that has been around long enough to be treating the grandchildren of its eldest patients.

For 50 years, the group has been seeing families like Kelli Rutledge’s. A technician for a nearby ophthalmology practice, she has been going to Autumn Road for two decades.

The group’s four doctors and two nurse practitioners quickly adapted to the coronavirus pandemic, sharply cutting back clinic hours and switching to virtual visits to keep patients and staff safe.

When Kelli, 54, and her husband, Travis, 56, developed symptoms of Covid-19, the couple drove to the group’s office and spoke to the nurse practitioner over the phone. “She documented all of our symptoms,” Ms. Rutledge said. They were swabbed from their car.

While the practice was never a big moneymaker, its revenues have plummeted. The number of patients seen daily by providers has dropped to half its average of 120. The practice’s payments from March and April are down about $150,000, or roughly 40 percent.

“That won’t pay the light bill or the rent,” said Tabitha Childers, the administrator of the practice, which recently laid off 12 people.

While there are no hard numbers, there are signs that many small groups are barely hanging on. Across the country, only half of primary care doctor practices say they have enough cash to stay open for the next four weeks, according to one study, and many are already laying off or furloughing workers.

“The situation facing front-line physicians is dire,” three physician associations representing more than 260,000 doctors, wrote to the secretary of health and human services, Alex M. Azar II, at the end of April. “Obstetrician-gynecologists, pediatricians, and family physicians are facing dramatic financial challenges leading to substantial layoffs and even practice closures.”

By another estimate, as many as 60,000 physicians in family medicine may no longer be working in their practices by June because of the pandemic.

The faltering doctors’ groups reflect part of a broader decline in health care alongside the nation’s economic downturn. As people put off medical appointments and everything from hip replacements to routine mammograms, health spending dropped an annualized rate of 18 percent in the first three months of the year, according to recent federal data.

While Congress has rushed to send tens of billions of dollars to the hospitals reporting large losses and passed legislation to send even more, small physician practices in medicine’s least profitable fields like primary care and pediatrics are struggling to stay afloat. “They don’t have any wiggle room,” said Dr. Lisa Bielamowicz, a co-founder of Gist Healthcare, a consulting firm.

None of the money allocated by lawmakers has been specifically targeted to the nation’s doctors, although the latest bill set aside funds for community health centers. Some funds were also set aside for small businesses, which would include many doctors’ practices, but many have faced the same frustration as other owners in finding themselves shut out of much of the funding available.

Federal officials have taken some steps to help small practices, including advancing Medicare payments and reimbursing doctors for virtual visits. But most of the relief has gone to the big hospital and physician groups. “We have to pay special attention to these independent primary care practices, and we’re not paying special attention to them,” said Dr. Farzad Mostashari, a former health official in the Obama administration, whose company, Aledade, works with practices like Autumn Road.

“The hospitals are getting massive bailouts,” said Dr. Christopher Crow, the president of Catalyst Health Network in Texas. “They’ve really left out primary care, really all the independent physicians,” he said.

“Here’s the scary thing — as these practices start to break down and go bankrupt, we could have more consolidation among the health care systems,” Dr. Crow said. That concerns health economists, who say the steady rise in costs is linked to the clout these big hospital networks wield with private insurers to charge high prices.

While the pandemic has wreaked widespread havoc across the economy, shuttering restaurants and department stores and throwing tens of millions of Americans out of work, doctors play an essential role in the health of the public. In addition to treating coronavirus patients who would otherwise show up at the hospital, they are caring for people with chronic diseases like diabetes and asthma.

Keeping these practices open is not about protecting the doctors’ livelihoods, said Michael Chernew, a health policy professor at Harvard Medical School. “I worry about how well these practices will be able to shoulder the financial burden to be able to meet the health care needs people have,” he said.

“If practices close down, you lose access to a point of care,” said Dr. Chernew, who was one of the authors of a new analysis published by the Commonwealth Fund that found doctor’s visits dropped by about 60 percent from mid-March to mid-April. The researchers used visit data from clients of a technology firm, Phreesia.

Nearly 30 percent of the visits were virtual as doctors rushed to offer telemedicine as the safest alternative for their staff and patients. “It’s remarkable how quickly it was embraced,” said Dr. Ateev Mehrotra, a hospitalist and associate professor of health policy at Harvard Medical School, who was also involved in the study. But even with virtual visits, patient interaction was significantly lower.

Almost half of primary care practices have laid off or furloughed employees, said Rebecca Etz, an associate professor of family medicine at Virginia Commonwealth University and co-director of the Larry A. Green Center, which is surveying doctors with the Primary Care Collaborative, a nonprofit group. Many practices said they did not know if they had enough cash to stay open for the next month.

Pediatricians, which are among the lowest paid of the medical specialties, could be among the hardest hit. Federal officials used last year’s payments under the Medicare program to determine which groups should get the initial $30 billion in funds. Because pediatricians don’t generally treat Medicare patients, they were not compensated for the decline in visits as parents chose not to take their children to the doctor and skipped their regular checkups.

“This virus has the potential to essentially put pediatricians out of business across the country,” said Dr. Susan Sirota, a pediatrician in Chicago who leads a network of a dozen pediatric practices in the area. “Our waiting rooms are like ghost towns,” she said.

Pediatricians have also ordered tens of thousands of dollars on vaccines for their patients at a time when vaccine rates have plunged because of the pandemic, and they are now working with the manufacturers to delay payments for at least a time. “We don’t have the cash flow to pay them,” said Dr. Susan Kressly, a pediatrician in Warrington, Pa.

Even those practices that quickly ramped up their use of telemedicine are troubled. In Albany, Ga., a community that was an unexpected hot spot for the virus, Dr. Charles Gebhardt, a doctor who is treating some infected patients, rapidly converted his practice to doing nearly everything virtually. Dr. Gebhardt also works with Aledade to care for Medicare patients.

But the telemedicine visits are about twice as long as a typical office visit, Dr. Gebhardt said. Instead of seeing 25 patients a day, he may see eight. “We will quickly go broke at this rate,” he said.

Although he said the small-business loans and advance Medicare payments are “a Godsend, and they will help us survive the next few months,” he also said practices like his need to go back to seeing patients in person if they are to remain viable. Medicare will no longer be advancing payments to providers, and many of the small-business funding represents a short-term fix.

While Medicare and some private insurers are covering virtual visits, which would include telephone calls, doctors say the payments do not make up for the lost revenue from tests and procedures that help them stay in business. “Telehealth is not the panacea and does not make up for all the financial losses,” said Dr. Patrice Harris, the president of the American Medical Association.

To keep the practices open, Dr. Mostashari and others propose doctors who treat Medicare and Medicaid patients receive a flat fee per person.

Even more worrisome, doctors’ groups may not be delivering care to those who need it, said Dr. Mehrotra, the Harvard researcher, because the practices are relying on patients to get in touch rather than reaching out.

Some doctors are already voicing concerns about patients who do not have access to a cellphone or computer or may not be adept at working with telemedicine apps. “Not every family has access to the technology to connect with us the right way,” said Dr. Kressly, who said the transition to virtual care “is making disparities worse.”

Some patients may also still prefer traditional office visits. While the Rutledges appreciated the need for virtual visits, Kelli said there was less time to “talk about other things.”

“Telehealth is more inclined to be about strictly what you are there for,” she said.

Private equity firms and large hospital systems are already eying many of these practices in hopes of buying them, said Paul D. Vanchiere, a consultant who advises pediatric practices.

“The vultures are circling here,” he said. “They know these practices are going to have financial hardship.”





What we’ve learned from the telemedicine explosion


Why telemedicine could be the next big thing in employee healthcare

In our decades in healthcare, we’ve never seen a faster care transformation than the rapid growth in telemedicine sparked by COVID-19. Every system we’ve spoken with over the past two months reports its doctors are now performing thousands of “virtual visits” each week, often up from just a handful in February. As one chief digital officer told us, “We took our three-year digital strategic plan and implemented it in two weeks!

This week, we convened leaders from across our Gist Healthcare membership to share learnings and questions about their telemedicine experiences. COVID-19 brought down regulatory and payment hurdles, as well as internal cultural barriers to adoption—but leaders expressed a concern that current payment levels and physician enthusiasm could dissipate. Some insurers have hinted at pulling back on payment, although they will have a hard time doing so as long as Medicare maintains “parity” with in-person visits.

Switching to 100 percent telemedicine was easier than most doctors anticipated. But as practices now begin to ramp up office visits, new questions are emerging about how to integrate digital and physical visit workflow, requiring providers to rethink office layout and technology within the practice: is there a good physical space in the office to conduct televisits? Zoom and FaceTime have worked in a pinch, but what platform is best for long-term operational sustainability and consumer experience?

Telemedicine has also raised consumer expectations: patients expect providers to be on time for a virtual appointment—setting a bar for punctuality that will likely carry over to their next in-person office visit. Across the rest of this year, health systems and physician groups will continue to push the boundaries of virtual care, establishing how far it can be extended to provide quality care in a host of specialties.

But at the same time, systems must also prepare for growing complexity in 2021: what is the right balance of in-person versus virtual care? How should telemedicine integrate with urgent and emergency care offerings? How should physician compensation change? And as payers and disruptors expand their virtual care offerings, how can providers differentiate their own platforms in the eyes of consumers? We’ll continue to share learnings as our members work through the myriad challenges and opportunities of this new virtual care expansion.