Thank you to all of our clients, professionals and friends for making sixteen years possible.
We love what we do and are excited for 2018. Happy New Year!!
Thank you to all of our clients, professionals and friends for making sixteen years possible.
We love what we do and are excited for 2018. Happy New Year!!
In our previous two posts, we looked at the overall decline in primary care physician productivity from 2002 to 2016, and the sharp uptick in capacity for medical sub-specialists during that same time period. For our final installment of this three-part series on the trends in physician productivity, our attention turns to surgical sub-specialties.
In our last post, we demonstrated the overall decline in primary care physician productivity from 2002 to 2016. The decline has yet to rebound for Family Medicine, Pediatrics and Urgent Care while Internal Medicine and OB/Gyn have seen sharp upticks in productivity in the last several years. This week’s focus is on the medical sub-specialties.
In our work helping clients across the country determine the number and type of physicians they need to be successful, physician productivity is a key factor. We have been closely tracking the market forces that impact productivity, as well as the resulting level of ambulatory encounters on a per specialty basis. This week’s focus is on primary care.
We would like to announce that Brittany Foreman has accepted a new position with Baker Botts in the Houston office, and we extend our warmest congratulations. Baker Botts is a global law firm with 725 attorneys practicing in 15 locations. Brittany will manage all digital communications for Baker Botts across all of its locations.
I was in an E-Strategy Committee Meeting at Wellmont Health System on Monday evening when a physician asked a straight-forward question: “What percentage of patients do not have their own primary care physician?” I told him that I was not sure, but that I would find out. So, this week we surveyed just over 3,000 consumers as to whether or not they had their own primary care physician.
Over the past few months, we’ve been noticing some trends in our conversations with our clients. There are three consistent conversations that continue to pop up. The first is about tightening budgets in direct proportion to the uncertainty around healthcare reform. The second is a desire to revisit their Provider Development Plan more often than every 3 years. Finally, clients (and us) are concerned that relying on a Community Needs Assessment for 3 years is not defensible, if need be. In response, we have developed, and are now offering, a subscription service to Provider Development Planning.
With disruptive companies like Amwell, Teledoc, American Well, MDLive, Care Vital and dokita247 offering consumers access to a physician 24 hours a day, from any location in the world, as long as the patient has a computer, tablet or smart phone, we wanted to test to what degree they pose a threat to our clients’ primary care base. So, we surveyed a little more than 3,000 consumers to understand their perspective.
We asked a simple question: “For the same price, who would you prefer to see? 1) Your Doctor at his or her office, 2) Any Doctor via your computer or skype, 3) Any Doctor via your tablet/facetime or 4) Any Doctor via your phone/facetime.”
We at 3d Health have long been interested in the role of the consumer within healthcare – we were the first firm in the country to incorporate patient access results into our Provider Development Plans and we have surveyed thousands of consumers to better understand their perspective on particular topics. Now, we are rolling out our Consumer Strategy Practice to our clients and the industry.
Over the past two weeks we have discussed the evolution of both television and healthcare, and what seems to be the missing consumer revolution within the latter. Republican Senators Bill Cassidy and Susan Collins introduced the Patient Freedom Act on Monday as a replacement bill to the Affordable Care Act. In addition to block grants to the states, the bill calls for pre-funding individual health savings accounts (HSAs) from tax rebates. The HSAs are then coupled with high deductible, catastrophic health insurance.
Basically, some patients would have their own HSA (pre-funded by their tax rebate) and would decide when, how and where they spend their healthcare dollar. Structurally, if anything can spur consumerism in healthcare, this is probably it. So, let’s imaging that a disruption on the scale of Netflix occurs within healthcare, what will consumers demand?
We believe that in the coming wave of consumerism, patients’ demands will center around five elements:
Last week we examined the evolution of television, with a particular focus on benefits to the consumer. This week, we are going to consider the history of hospitals and health systems.
15 years ago this morning, I took the L into the loop to a borrowed cubicle to start 3d Health. Thanks to our clients, professional staff, and friends, we have completed thousands of successful projects since January 16, 2002 and established rewarding relationships with truly great people.
Healthcare has often been compared to other “stodgy” industries such as banking and utilities - change-adverse industries that experienced consolidation and some degree of technical revolution for the consumer. But, what if healthcare is in for a more radical change? Maybe considering the dramatic change in how consumers access and view television is a better barometer of what is to come in healthcare.
President-elect Trump and the Republican-controlled Congress have been very clear about their desire to fully repeal Obamacare, even on Day 1 of the new Administration. This desire brings up many questions from the rest of us. Is this possible? Are they being literal? What are the biggest hurdles to getting this done?
Representative Tom Price is a Republican from Georgia, and, as you probably know, was recently nominated by President-elect Trump to head the Department of Health and Human Services. Price, 62, is an orthopedic surgeon from the Atlanta suburbs and the Chair of the House Budget Committee. Price began focusing his energies on dismantling Obamacare almost as soon as President Obama signed the law in 2010. Since then, he has drafted and promoted a series of largely market-based substitutes to overcome what he has described as “oppressive” federal government strictures and runaway costs.
So, what makes Tom Price unique on Capitol Hill?
On Tuesday, President-elect Donald Trump announced that Seema Verma would be his CMS Administrator, working under Representative Tom Price who was tapped by Trump to head the Department of Health and Human Services. By all accounts, Verma is very bright. She holds a master’s degree in public health from Johns Hopkins University and a bachelor’s degree in life sciences from the University of Maryland.
Verma is the President, CEO and Founder of SVC, a national health policy consultancy. Verma is well known to Vice President-Elect Mike Pence. She was the architect of Gov. Mike Pence’s Medicaid expansion in Indiana that is expected to play a key role in determining how Republicans “replace” President Barack Obama’s health care law. Her past actions could help us understand her strategy for healthcare moving forward.
In last week’s post we examined President-elect Trump’s policy prescription reforming healthcare. Our overall take-away was that thus far, the President-elect has outlined a limited number of free market principles that he would like to see implemented in healthcare, and his policy prescription is quite light on details.
Here is what we do know: Donald Trump has said that Mike Pence will lead the Administration’s healthcare efforts; Mike Pence respects Paul Ryan’s policy acumen and considers him a friend; and it is completely plausible that the Administration plugs into a more detailed plan and makes it their own. So, what is Paul Ryan’s plan?
Tuesday’s election of Donald J. Trump brings with it a high degree of uncertainty for the healthcare industry. President-elect Trump, along with the Senate and House leaders, have been very clear in their desire to completely repeal the Affordable Care Act. Conventional wisdom is that a total repeal is nearly impossible and the ACA would be shrunk rather than abolished. But, Trump has never been labeled conventional.
In an effort to continue to provide the most comprehensive and interesting data in the industry, we are constantly gathering information. A few weeks ago we discussed patient expectations for access to their primary care physicians. In this study, we learned that 77.4% of respondents expect to see a new primary care physician in seven days or less, which is much quicker than the reality across the country.
Recently we completed another national study of 3,030 potential patients and posed the question, “Where would you prefer to be treated for a minor illness?”
I know, I know, everyone is tired of thinking about MACRA. But, the final rule came out last week and it allows more flexibility than the proposed rule. In April, the CMS proposed their rule for implementing the Medicare Access and CHIP Reauthorization Act (“MACRA”). MACRA replaces the sustainable growth rate formula for physician pay under Medicare and attempts to shift the reimbursement methodology away from fee-for-service to a value-based payment system.
For many hospitals and health systems, planning for the succession of their physician base often is one of the largest components of their Provider Development Plan. While actual planned retirement age varies by market, physician specialty, the economy, the state of our industry, and life’s circumstances, it is important to project the need for replacing aging physicians as accurately as possible.
Over the last 25 years, there have been at least five different legislative measures that have stirred rumors of physicians either retiring early or going to find something different to do for a living. While the first five proved to be largely false alarms, one does wonder whether the implementation of MACRA will be the tipping point for many physicians.
Through 3d Health’s Provider Development Planning work across the country, we receive a number of Requests for Proposal (“RFP”) through-out the year. Many of the RFPs are constructed quite well while others seem to lack focus on what is most important in completing a plan.
In our work with thousands of primary care physicians across the country, we have found that only 30% of physicians are able to offer a new patient appointment within seven days. Our hypothesis was that patient expectations would vary from this reality. So, we completed a national study of 6,725 potential patients across the country and asked “how many days are you willing to wait to see a new primary care physician?”
Our clients increasingly ask us whether patients prefer to see their doctor close to home or close to work. Rather than rely on anecdotal information and gut instinct, we completed a national study on the topic and received 3,025 responses – and the results are very interesting.
Historically, hospitals and health systems completed Provider Development Plans in three year cycles and utilized these plans for regulatory purposes without updating them in the intervening years. However, with the implementation of Stark III, we have found that most legal counsel with whom we work are more comfortable with either a “real time” or more frequent approach. It also seems reasonable to assume that the utility of the plan would decrease in direct proportion to the length of time that has passed since its completion.
In April of 2015, Congress replaced the wildly unpopular Medicare Sustainable Growth Rate (SGR) formula in a rare, overwhelmingly bipartisan vote. The elation, however, had more to do with getting rid of the angst of the annual doc fix and less to do with the system that replaces the SGR formula. So, what is replacing the SGR?
The following is Part 3 of our in-depth analysis of the supply, demand, aggregation and distribution of physicians throughout the United States. Now that we know and understand the magnitude of the shortage of physicians across the U.S., the question becomes “what should we do about it?” The answer lies in a combination of increasing the supply of physicians, bending the demand curve, and the long-overdue retooling of the physician practice.
As you would expect, the projected demand curve for physicians closely matches the aging of the U.S. population. The percentage of the U.S. population that is 65 or older grows by 2 percentage points five years out, 4 points ten years out and 10 full points by 2036. As a result, the largest spike in demand for physicians is projected between ten and twenty years from now.
Our team at 3d Health recently completed an in-depth analysis of the supply, demand, aggregation, and distribution of physicians throughout the United States. The results are both interesting and a little scary for those of us in the business of attempting to attract physicians to hospitals and health systems. We are excited to share the results and key findings with our clients and friends throughout the industry.
Cheers to the greatest group of clients that allow us to do what we love! Thanks to you, and the best team we have ever assembled, 3d Health completed 152 projects in 2015 and is 14 years old today.
Congratulations to Ron Flower on his promotion to Director at 3d Health! Ron is not only a tremendous team member, but our clients love working with him. It is a great, well-deserved way for Ron to end the year.
$35 million, $69.5 million, $118.7 million and $237 million - these are all recent fines levied on hospitals and health systems for allegedly violating federal regulations relating to economic relationships with physicians. Several of these fines also included violations of the False Claims Act, which was the result of the original Stark violation.
In today’s hypercompetitive healthcare marketplace, hospitals and health systems are always on the lookout for ways to capture market share and stem outmigration. What is the best way to do this? Give patients what they want – access to physicians in a reasonable timeframe.
3d Health's sister company, Healthcare Valuation Group, is completing its first quarter of operation and has already worked on a number of assingments with clients. The concept of matching senior professionals with superior client service within the valuation space seems to be well received.
After well over a decade with 3d Health, Jon Geise has decided to return to the provider side of the industry and has accepted a position in Strategy and Planning with a health system in Chicago. Jon will miss his interactions with clients, but the lure of "getting off the road" with an expanding family was too much.
Community Needs Assessment, Medical Staff Development Planning, Physician Resource Planning, Provider Resource Planning, Network Provider Development Planning, Recruitment Strategy – regardless of what these Plans are called, the impetus is to project the need for physicians, given a specific purpose.
Community Needs Assessment can be traced back to the late 1990s and IRS Revenue Ruling 97-21. The purpose of the Assessment was basic: determine whether a demonstrated community need existed in the local market in order to financially assist independent physicians with recruitment.
Medical Staff Development Planning was a natural outcrop of the Community Needs Assessment: if an Assessment is already being completed, why not figure out what is needed to support the hospital? From here, hospitals, health systems, and their consultants added one-on-one interviews, physician surveys, and Steering Committees with physicians and Board members. However, projecting the demand for physicians in today’s reality has become a much more robust and complex endeavor.
Over the past 20 years, medical staff development planning for hospitals and health systems has become increasing complex. Physicians continue to sub-specialize, advanced clinical providers (e.g. nurse practitioners, physician assistants) play a greater role in care today, the population continues to age, the physician workforce is changing, recruiting providers can be difficult (it may take years in some markets), physician alignment and institutional commitment are not static, and the level of competition is escalating.
As a new patient, the health care “front door” is usually not the main entrance of the hospital or health system, but rather the front office at a physician practice. A number of converging factors over the past couple decades have created conflicting incentives between institutions and their physician partners in terms of patient access to physician practices. A full schedule is a measure of comfort to a physician that is rewarded financially by seeing more and doing more. However, to a hospital or health system, full schedules at aligned physician practices means potentially turning away new lives and new relationships – which can be particularly problematic in an environment of shrinking admissions and hospital volumes.
Succession planning is a critical component of any hospital’s Medical Staff Development Plan. But what is the average physician retirement age today? With typical recruitment lead times of two years or more, hospitals can ill afford not to pay attention to physician retirement timelines. In a perfect world, physicians and hospital leadership would have a dialogue two to three years before the physicians plan on hanging up the stethoscope. In reality, hospitals often receive a letter on November 30th - or even later - communicating a physician’s plan to retire at the end of the year. Happy holidays, right? This is a difficult scenario no matter the specialty, but can be crippling in specialties with only one or two providers, or with “superstar” physicians.
As such, hospitals must proactively plan for recruitment to support succession planning efforts. At a basic level, this means keeping an inventory of your physicians that are within three to five years of retirement. You can develop this inventory in any number of ways. However, unless you regularly speak with every aligned physician at your hospital about their retirement plans, we recommend developing a simplifying framework you can apply on a routine basis. Usually this involves an age analysis of your medical staff or aligned physicians and identifying those physicians above some set threshold.
Reimbursement for diagnostic imaging services has been in the crosshairs at the Centers for Medicare & Medicaid Services (“CMS”) for as long as the health care cost curve has been bending upwards. Despite recent findings that imaging is currently near the bottom of the drivers of growth in Medicare spending, the 2014 Hospital Outpatient Prospective Payment (“HOPPS”) Final Rule has been controversial for once again cutting imaging reimbursement for Medicare patients.
At the heart of the issue is CMS choosing to use CT and MRI cost center specific information in calculating reimbursement amounts for those modalities. Historically, reimbursement was set using inputs from all radiology and imaging departments in aggregate. The HOPPS proposed rule estimated the associated reductions in CT and MRI reimbursement at 38% and 19% respectively. Industry experts correctly pointed out to CMS some of the flaws under the proposed methodology and the final rule issued late last year reflected a modified approach that only reduced reimbursement for CT by 21% and MRI by 12%.
As we continue to work with our clients’ legal counsel across the country, we are finding that the “shelf life” of the Community Needs Assessment has continued to evolve. At this point, the majority of our clients are re-defining their CMS service area (the hospital Stark service area or "geographic area served by the hospital") and updating the community needs analysis on an annual basis. That said, it does vary by organization and legal counsel.
It seems reasonable to assume that the utility of the Community Needs Assessment would decrease in direct proportion to the length of time that has passed since its completion. From 3d Health’s perspective, the assessment is as accurate as possible on the day it is issued. Our clients and their legal counsel ultimately make the determination regarding how long they can rely on the report and still be in compliance.
In order to best serve the needs of our hospital and health system clients, 3d Health offers two approaches to Community Needs Assessments:
1) We work with clients to complete a comprehensive assessment on an annual basis across 45 different physician specialties. This approach, often done in concert with a Medical Staff Development Plan, offers the most comprehensive coverage for hospitals with significant recruitment activity.
2) We issue Single Specialty Studies on a per recruit basis during the course of the year. This approach ensures a determination of community need on a per recruit basis at the time of recruitment. It also allows for a Community Needs Assessment that reflects the many market changes that take place throughout the year: medical staff retirements, community physician retirements, your hospital’s recruiting activities, and the recruiting activities of competitors within the market.
The looming shortage and mal-distribution of physicians in the U.S. is well documented. By 2020, the overall projected shortage of physicians across the U.S. is expected to be 91,500 (45,400 in primary care and 46,100 sub-specialists) and growing to 130,600 by 2025. In addition, the number of physicians per 100,000 of population varies greatly by market, and it remains difficult to attract physicians to rural and payer-challenged urban markets, exacerbating shortages in those areas.