New Healthcare Law Will Impact Physician Practices

If the numbers are correct, and there’s no reason to think they’re not, there are a lot of unhappy people practicing medicine right now.

Consider a 2009 study published in the Annals of Internal Medicine: The survey of 119 clinics in New York and the Midwest revealed that 48 percent of physician respondents said they worked in chaotic environments, while only 25 percent indicated their practices emphasized quality. Fed up with those environments, almost one-third said they would likely leave their jobs over the next two years.

The Patient Protection and Affordable Care Act, signed into law earlier this year, will attempt to reverse that trend and return the joy of practicing medicine to physicians. But change is never easy, and as Tanya Bower, a director with the Ft. Lauderdale-based law firm Tripp Scott, notes, “[the Act] is probably going to impact physician practices a lot on a day-to-day basis.”

Paying for Performance

The healthcare marketplace already has seen the beginnings of the pay-for-performance initiatives that link Medicare payments to physician performance in various categories, such as reducing the cost of caring for chronic conditions. With the new law, Bower says those initiatives will become even stronger.

“It’s all going to be focused on the delivery, and the quality of the delivery of care,” Bower says. “You are going to see some pressure put on physicians to not just treat patients when they come through the door, but truly set the patient up on a treatment plan.”

Bower explains that if physicians’ numbers improve to the point where there are fewer hospital readmissions, or where conditions can be treated through exercise rather than surgical procedures, that will actually reduce Medicare’s costs. “[Medicare will reimburse] physicians more because they’re having better outcomes with their patients,” she says.

Keeping track of those outcomes could require investing in technology, such as electronic medical records. Bower explains that during the congressional debates over the proposed healthcare legislation, proponents regularly pointed to two institutions -- the Cleveland Clinic and the Mayo Clinic -- as leading hospital groups that were providing good care. One of the commonalities of the two institutions is the extensive use of electronic medical recordkeeping.

The Medical Home

The new law also will impact physicians through the establishment of a center for innovation in Medicare and Medicaid. One of the main goals will be to research, develop and test patient-care delivery arrangements. The medical home model that has been piloted in several locations across the U.S. is one such example, as is the bundling of payments as an alternative to the current fee-for-service model.

“Florida and many other states are testing the medical home concept, where patients would go to a single practice with a team of physicians,” she says, with the primary care doctor serving as the medical coordinator. “All those treating physicians will review the same electronic medical records, so there will be no duplication of care or providing care that could be harmful,” Bower adds. “It’s more of a collaborative effort, and will mean a huge push for more use of electronic medical records.”

In a bundled-care model, hospitals would be paid a flat fee to cover all the costs associated with a patient’s care. For example, if a patient needed knee surgery, the hospital could receive a flat fee of $20,000 that would be used to cover the cost of the primary care physician, the orthopedic surgeon, the anesthesiologist, EKGs or other tests, and possibly some of the initial rehabilitation. Instead of Medicare reimbursing each independent provider, the hospital would divide the flat payment among them -- a change that would provide incentive to minimize hospital readmissions and encourage physicians to work together to more efficiently and effectively coordinate patient care.

Bower says that the healthcare marketplace already has begun trending in the direction of bundled care. “There are generations of doctors who have graduated from medical school in the last five to ten years who want to know they have a consistency in payment,” she explains. “They don’t want to be a business person worrying about how many people they have to hire, or how they’re going to handle billing. Physicians are embracing it, saying, ‘Maybe I’m not going to earn $450,000 a year, but I’m going to have a quality of life, and I can guarantee that I’ll be at $250,000 with bonus potential.’ ”

And with nearly half of surveyed physicians reporting that they work in chaotic environments, change might be just what the doctor ordered.