From Obamacare to Trumpcare – implications for gastroenterologists
Ultimately, physicians will need to make strategic guesses and rapid adjustments to sustain financial viability and provide high-value care. Strategies differ depending on your practice situation. Keep in mind the five principles listed in the opening paragraph of this article. It is likely that the most important principle to factor into your practice strategy is continuing reduction in reimbursements. No matter what model is adopted to reform the ACA, the financial pot (Medicare, Medicaid, commercial insurance, bundled payments, fee-for-service payments) will be reduced, and the number of uninsured patients will increase. How would you change your practice if Medicare was your best payer (“manage to Medicare”)?
Independent practices
Physicians in small- to medium-size independent practices continue to struggle with reducing reimbursements, reporting burdens, increasing overhead expenses, crushing regulatory requirements, and provider burnout. Trumpcare will favor small practices more than Obamacare from a policy (not necessarily a financial) perspective. Regulations on small business and reporting burdens may ease, but the move toward value-based reimbursement as outlined in the MACRA (passed with overwhelming bipartisan support) will not end.16 Practices in small communities continue to thrive because they give excellent care with limited competition and low overhead. Some practices in suburban and urban centers struggle because payers tend to favor (with enhanced managed care rates) larger practices and health systems. Large, horizontally integrated, efficient gastroenterology practices will continue to thrive because they can develop a “must-have” position with payers. Building remote patient monitoring, teleconsulting, and capabilities around value demonstration will be strategically advantageous.
Options for independent physicians include 1) maintaining status quo, 2) retiring, or 3) exiting the independent business model through a practice sale. Traditionally, physicians who wanted to sell their practices turned to hospitals or health systems. Recently, a physician-run model funded by venture capital has emerged where reduced overhead (through centralization of services) is combined with enhanced power during payer negotiations (because of scale). This model has allowed practices to merge into a physician organization and remain free from health system employment.17
Large health systems
Physicians employed by large health systems, whether they are nonprofit, for-profit, or AMCs, will see their future tied directly to health system success. If bundled payment, alternative payment, and capitation models of health care financing continue to grow in popularity, then success will be determined by a health system’s market share and its ability to form true clinical integration. In a capitated environment, expansion of market share (especially of relatively healthy patients) will help support margins. However, financial success will come from a system’s ability to manage high-cost patients, those 5% of patients who consume 50% of health care resources.18
Hospitals with a financially challenged patient base (safety-net hospitals) will have enormous financial pressures going forward. Repeal of ACA without restoration of pre-ACA funding will affect directly the financial health of systems including AMCs. AMCs and other health systems will be forced to reduce fixed overhead, enhance productivity of faculty, and restrict nonfunded activities (teaching for example). Although most AMCs are now in an active acquisition mode, this strategy is naturally limited by the number of remaining acquisition targets. Traditional high managed care rates enjoyed by AMCs will shrink, as will federal research funding (which typically comes with high indirect financial support). Health systems and GI societies will need to dedicate much more attention to state policy makers as Trumpcare progresses.
Finally, all providers will need to manage the business implications of retail health. As people assume higher deductibles and copays and health savings accounts grow, patients will change their patterns of purchasing services. Reputation counts for less when people are facing large price differences, so attention to patient-centric amenities, price, patient engagement, and patient satisfaction will become even more important.
Conclusion
The United States has undergone a massive and rapid political transformation. The mandate felt by conservative politicians, perhaps not supported by numbers, will carry a conservative platform forward. In areas where progressive Democrats emphasized federal power and socialized regulation (religion, education, civil rights, income security, and health policy), conservatives will transfer decision power as much as possible to states, local communities, and individuals. Maintaining the concept of “health as a right” will test the conscience of all of us.
References
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