Cartoon – Questionable Leadership Skills
Cartoon – Old School Leadership Qualities
Cartoon – Sign of the Times (Cell Phones)
Hastening the demise of independent physician practice
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
A new report from consulting firm Avalere Health and the nonprofit Physicians Advocacy Institute finds that the pandemic accelerated the rise in physician employment, with nearly 70 percent of doctors now employed by a hospital, insurer or investor-owned entity.
Researchers evaluated shifts to employment in the two-year period between January 2019 and January 2021, finding that 48,400 additional doctors left independent practice to join a health system or other company, with the majority of the change occurring during the pandemic. While 38 percent chose employment by a hospital or health system, the majority of newly employed doctors are now employed by a “corporate entity”, including insurers, disruptors and investor-owned companies.
(Researchers said they were unable to accurately break down corporate employers by entity, and that the study likely undercounts the number of physician practices owned by private equity firms, given the lack of transparency in that segment.) Growth rates in the corporate sector dwarfed health system employment, increasing a whopping 38 percent over the past two years, in comparison to a 5 percent increase for hospitals.
We expect this pace will continue throughout this year and beyond, as practices seek ongoing stability and look to manage the exit of retiring partners, enticed by the outsized offers put on the table by investors and payers.
A new divide is making the workforce crisis worse
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
Health system executives continue to tell us that the top issue now keeping them up at night is workforce engagement.
Exhausted from the COVID experience, facing renewed cost pressures, and in the midst of a once-in-a-generation rethink of work-life balance among employees, health systems are having increasing difficulty filling vacant positions, and holding on to key staff—particularly clinical talent. One flashpoint that has emerged recently, according to leaders we work with, is the growing divide between those working a “hybrid” schedule—part at home, part in the office—and those who must show up in person for work because of their roles. Largely this split has administrative staff on one side and clinical workers on the other, leading doctors, nurses, and other clinicians to complain that they have to come into work (and have throughout the pandemic), while their administrative colleagues can continue to “Zoom in”. There’s growing resentment among those who don’t have the flexibility to take a kid to baseball practice at 3 o’clock, or let the cable guy in at noon without scheduling time off, making the sense of burnout and malaise even more intense. Add to that the resurgence in COVID admissions in some markets, and the “help wanted” situation in the broader economy, and the health system workforce crisis looks worse and worse. Beyond raising wages, which is likely inevitable for most organizations, there is a need to rethink job design and work patterns, to allow a tired, frustrated, and—thanks to the in-person/WFH divide—envious workforce the chance to recover from an incredibly difficult year.
Is it time to take Physicians off the Hamster Wheel?
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
In theory, the idea of salaried compensation for employed physicians makes a lot of sense. For one thing, it’s blessedly simple, with the potential to remove the tensions that arise in shifting to value-based payment or implementing lower-cost (but lower-reimbursement) care models like telemedicine.
However, medical group leaders have long feared that productivity would tank if doctors were put on salary. (As a consulting colleague said recently, the switch to salary would cause a 20+ percent drop in productivity in the medical group, creating a challenge akin to keeping an airline profitable after removing a quarter of the seats on its planes). We’ve been expecting that more doctors might seek stable compensation models in the wake of the pandemic, and so weren’t entirely surprised when the question of moving to straight salary came up in three conversations over the past two weeks.
In all three cases, leaders are hoping to create more predictability, and to decrease the resources and effort needed to execute against a menu of complex plans. They believe that a move to salary is inevitable, and their questions have more to do with timing.
Gauging when to make the move should be determined not by external market shifts, but by internal cultural and operational readiness. Are the systems in place to enable doctors to work at a high level of efficiency? And do we have the group collaboration needed to maintain high performance without paying doctors as if they are salesmen on commission?
Another wrinkle has popped up for groups who might be ready now: the past year has upended the benchmarks that groups might otherwise use to inform decisions on where to set salaries. Nevertheless, over time we expect more groups to move in this direction, with the hope of getting off the “hamster wheel” of compensation committee meetings and ever more exotic permutations of bonus plans, in search of a more stable model.
Private equity accelerates its push into physician practice
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
As we reported recently, healthcare M&A hit record highs in the first quarter of 2021—with deal activity in the physician practice space surging 87 percent. The graphic above highlights private equity firms’ increasing investment in the sector over the last five years. Both the number and size of PE-backed healthcare deals have increased substantially from 2015 to 2020, up 39 and 45 percent respectively.
In 2020, physician practices and services comprised nearly a fifth of all transactions, with PE firms driving the majority. One in five physician transactions involved primary care practices—a signal that investors are banking on profits to be made in the shift to value-based care models.
Meanwhile, PE firms are still rolling up high-margin specialty practices, with ophthalmology, orthopedics, dermatology, and anesthesiology groups all receiving significant funding in 2020. PE investment in physician practices will likely continue to accelerate, as investors view healthcare as a promising place to deploy readily available capital.
But we remain convinced that private equity investors have little interest in being long-term owners of practices, and will ultimately look for an exit by selling “rolled-up” physician entities to health systems or insurers.
Benjamin Franklin’s fight against a deadly virus: Colonial America was divided over smallpox inoculation, but he championed science to skeptics
Exactly 300 years ago, in 1721, Benjamin Franklin and his fellow American colonists faced a deadly smallpox outbreak. Their varying responses constitute an eerily prescient object lesson for today’s world, similarly devastated by a virus and divided over vaccination three centuries later.
As a microbiologist and a Franklin scholar, we see some parallels between then and now that could help governments, journalists and the rest of us cope with the coronavirus pandemic and future threats.
Smallpox strikes Boston
Smallpox was nothing new in 1721. Known to have affected people for at least 3,000 years, it ran rampant in Boston, eventually striking more than half the city’s population. The virus killed about 1 in 13 residents – but the death toll was probably more, since the lack of sophisticated epidemiology made it impossible to identify the cause of all deaths.
What was new, at least to Boston, was a simple procedure that could protect people from the disease. It was known as “variolation” or “inoculation,” and involved deliberately exposing someone to the smallpox “matter” from a victim’s scabs or pus, injecting the material into the skin using a needle. This approach typically caused a mild disease and induced a state of “immunity” against smallpox.
Even today, the exact mechanism is poorly understood and not much research on variolation has been done. Inoculation through the skin seems to activate an immune response that leads to milder symptoms and less transmission, possibly because of the route of infection and the lower dose. Since it relies on activating the immune response with live smallpox variola virus, inoculation is different from the modern vaccination that eradicated smallpox using the much less harmful but related vaccinia virus.
The inoculation treatment, which originated in Asia and Africa, came to be known in Boston thanks to a man named Onesimus. By 1721, Onesimus was enslaved, owned by the most influential man in all of Boston, the Rev. Cotton Mather.
Known primarily as a Congregational minister, Mather was also a scientist with a special interest in biology. He paid attention when Onesimus told him “he had undergone an operation, which had given him something of the smallpox and would forever preserve him from it; adding that it was often used” in West Africa, where he was from.
Inspired by this information from Onesimus, Mather teamed up with a Boston physician, Zabdiel Boylston, to conduct a scientific study of inoculation’s effectiveness worthy of 21st-century praise. They found that of the approximately 300 people Boylston had inoculated, 2% had died, compared with almost 15% of those who contracted smallpox from nature.
The findings seemed clear: Inoculation could help in the fight against smallpox. Science won out in this clergyman’s mind. But others were not convinced.
Stirring up controversy
A local newspaper editor named James Franklin had his own affliction – namely an insatiable hunger for controversy. Franklin, who was no fan of Mather, set about attacking inoculation in his newspaper, The New-England Courant.
One article from August 1721 tried to guilt readers into resisting inoculation. If someone gets inoculated and then spreads the disease to someone else, who in turn dies of it, the article asked, “at whose hands shall their Blood be required?” The same article went on to say that “Epidemeal Distempers” such as smallpox come “as Judgments from an angry and displeased God.”
In contrast to Mather and Boylston’s research, the Courant’s articles were designed not to discover, but to sow doubt and distrust. The argument that inoculation might help to spread the disease posits something that was theoretically possible – at least if simple precautions were not taken – but it seems beside the point. If inoculation worked, wouldn’t it be worth this small risk, especially since widespread inoculations would dramatically decrease the likelihood that one person would infect another?
Franklin, the Courant’s editor, had a kid brother apprenticed to him at the time – a teenager by the name of Benjamin.
Historians don’t know which side the younger Franklin took in 1721 – or whether he took a side at all – but his subsequent approach to inoculation years later has lessons for the world’s current encounter with a deadly virus and a divided response to a vaccine.
Independent thought
You might expect that James’ little brother would have been inclined to oppose inoculation as well. After all, thinking like family members and others you identify with is a common human tendency.
That he was capable of overcoming this inclination shows Benjamin Franklin’s capacity for independent thought, an asset that would serve him well throughout his life as a writer, scientist and statesman. While sticking with social expectations confers certain advantages in certain settings, being able to shake off these norms when they are dangerous is also valuable. We believe the most successful people are the ones who, like Franklin, have the intellectual flexibility to choose between adherence and independence.
Truth, not victory
What happened next shows that Franklin, unlike his brother – and plenty of pundits and politicians in the 21st century – was more interested in discovering the truth than in proving he was right.
Perhaps the inoculation controversy of 1721 had helped him to understand an unfortunate phenomenon that continues to plague the U.S. in 2021: When people take sides, progress suffers. Tribes, whether long-standing or newly formed around an issue, can devote their energies to demonizing the other side and rallying their own. Instead of attacking the problem, they attack each other.
Franklin, in fact, became convinced that inoculation was a sound approach to preventing smallpox. Years later he intended to have his son Francis inoculated after recovering from a case of diarrhea. But before inoculation took place, the 4-year-old boy contracted smallpox and died in 1736. Citing a rumor that Francis had died because of inoculation and noting that such a rumor might deter parents from exposing their children to this procedure, Franklin made a point of setting the record straight, explaining that the child had “receiv’d the Distemper in the common Way of Infection.”
Writing his autobiography in 1771, Franklin reflected on the tragedy and used it to advocate for inoculation. He explained that he “regretted bitterly and still regret” not inoculating the boy, adding, “This I mention for the sake of parents who omit that operation, on the supposition that they should never forgive themselves if a child died under it; my example showing that the regret may be the same either way, and that, therefore, the safer should be chosen.”
A scientific perspective
A final lesson from 1721 has to do with the importance of a truly scientific perspective, one that embraces science, facts and objectivity.
Inoculation was a relatively new procedure for Bostonians in 1721, and this lifesaving method was not without deadly risks. To address this paradox, several physicians meticulously collected data and compared the number of those who died because of natural smallpox with deaths after smallpox inoculation. Boylston essentially carried out what today’s researchers would call a clinical study on the efficacy of inoculation. Knowing he needed to demonstrate the usefulness of inoculation in a diverse population, he reported in a short book how he inoculated nearly 300 individuals and carefully noted their symptoms and conditions over days and weeks.
The recent emergency-use authorization of mRNA-based and viral-vector vaccines for COVID-19 has produced a vast array of hoaxes, false claims and conspiracy theories, especially in various social media. Like 18th-century inoculations, these vaccines represent new scientific approaches to vaccination, but ones that are based on decades of scientific research and clinical studies.
We suspect that if he were alive today, Benjamin Franklin would want his example to guide modern scientists, politicians, journalists and everyone else making personal health decisions. Like Mather and Boylston, Franklin was a scientist with a respect for evidence and ultimately for truth.
When it comes to a deadly virus and a divided response to a preventive treatment, Franklin was clear what he would do. It doesn’t take a visionary like Franklin to accept the evidence of medical science today.
Biden administration begins to implement a ban on surprise bills
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
On Thursday, the Biden administration issued the first of what is expected to be a series of new regulations aimed at implementing the No Surprises Act, passed by Congress last year and signed into law by President Trump, which bans so-called “surprise billing” by out-of-network providers involved in a patient’s in-network hospital visit.
The interim final rule, which takes effect in 2022, prohibits surprise billing of patients covered by employer-sponsored and individual marketplace plans, requiring providers to give advance warning if out-of-network physicians will be part of a patient’s care, limiting the amount of patient cost-sharing for bills issued by those providers, and prohibiting balance billing of patients for fees in excess of in-network reimbursement amounts.
The rule also establishes a process for determining allowable rates for out-of-network care, involving comparison to prevailing statewide rates or the involvement of a neutral arbitrator, but falls short of specifying a baseline price for arbitrators to use in determining allowable charges. That methodology, along with other details, will be part of future rulemaking, which will be issued later this year.
Of note, the rule does not include a ban on surprise billing for ground ambulance services, which were excluded by Congress in the law’s final passage—even though more than half of all ambulance trips result in an out-of-network bill. Expect intense lobbying by industry interests to continue as the details of future rulemaking are worked out, as has been the case since before the law was passed.
While burdensome for patients, surprise billing has become a lucrative business model for some large, investor-owned specialist groups, who will surely look to minimize the law’s impact on their profits.
The Supreme Court lets site-neutral payment policies proceed
https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8
This week, the Supreme Court declined to hear an appeal challenging Medicare’s 2019 regulation calling for “site-neutral payment” for services provided by hospitals in outpatient settings, clearing the way for the rule’s implementation. The appeal was filed by the American Hospital Association (AHA), along with numerous hospitals and health systems, after a lower court ruling last year upheld the change to Medicare’s reimbursement policies.
The rule aims to level the playing field between independent providers and hospital-owned clinics by curtailing hospitals’ ability to charge higher “facility fees” for services provided in locations they own. Site-neutral payment has been a longstanding target of criticism by health economists and policymakers, who cite the pricing advantage as a driver of consolidation in the industry, which has tended to push the cost of care upward.
The AHA expressed disappointment in the Court’s decision not to hear the appeal, saying that the changes to payment policy “directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care.” The primary difference, of course, is hospitals’ need to fully allocate their costs across all the services they bill for, making care in lower-acuity settings more expensive than similar care delivered by practices that don’t have to subsidize inpatient hospitals and other costly assets.
Over the years that legitimate business need has turned into a deliberate business model—purchasing independent practices in order to take advantage of higher hospital pricing. As Medicare looks to manage Baby Boomer-driven cost growth, and employers and consumers grapple with rising health spending, expect increasingly rigorous efforts to push back against these kinds of pricing strategies.
HENRY KOTULA 
