How much revenue do physician generate for hospitals?

2019 Physician Inpatient/Outpatient Revenue Survey was released recently. Merritt Hawkins (MH) conducts longitudinal surveys covering physician staffing issues including physician recruiting incentives, physician practice patterns, physician appointment wait times, and related topics. The 2019 survey was sent to 3,000 hospital chief financial officers (CFOs) and other financial managers nationwide.

The average annual revenue generated by all physician specialties for their affiliated hospitals over a period of 16 years has remained relatively constant at $1.5 million annually. Note that 50% hospitals in the survey had < 100 beds and only 20% had > 300 beds.

The average NET revenue generated by PCP’s was $2,133,273 and for specialists was $2,446,429. The survey does not tell us whether this accounted for downstream revenue or not. CV Surgery and Neurosurgery has the highest net revenue (>3.4M). The average annual net revenue generated by all 19 specialties in the 2019 survey is $2,378,727, a significant increase of 52% compared to 2016.

Although it is not clear what was included in compensation, MH also compared ‘salary’ to average revenue generated for physicians. CV Surgery had a ratio of 5.9 (generated revenue 5.9 times salary), Family Practice (FP) 8.87 and General Surgery 7.7. The FP number is surprising with the high revenue generated but I must assume this counts downstream revenue or referral partial revenue whereas for specialties it does not. But I could be wrong.

 

Growth in hospital revenue

The Medicare Payment Advisory Commission (MedPAC) data released for 2017 shows hospitals' Medicare margins declining to their lowest levels in ten years. However, hospitals' all-payer margins (including Medicare) continued their upward climb. MedPAC is an independent US federal body established by the Balanced Budget Act of 1997 and based in Washington, D.C.  Its mandate is to advise the US Congress on payments to private health plans participating in Medicare and health providers serving Medicare beneficiaries as well as to evaluate beneficiary's access to care and the quality of care received.

Not-for-profit hospitals has negative margins of -11% and was -9.7 for all 6210 hospitals. Similarly, urban hospitals had margins of -10% whereas rural hospitals were only -5.9% due to the boost in reimbursement for rural hospitals enacted previously.

Despite this, the hospitals continued to be ‘profitable’ (revenue over expenses) with aggregate all payer margins going from 6.4% in 2016 to 7.1% in 2017. Operating margins (Operating Margin = Operating Earnings / Revenue) stayed about the same at 5.9%.

What is not surprising is the rate of growth of the out-patient business. “The American Hospital Association's 2019 Hospital Statistics report showed hospitals' net outpatient revenue was $472 billion and inpatient revenue totaled nearly $498 billion in 2017, the latest year for which the report covers, creating a ratio of 95%, up from 83% in 2013.”  

Interesting though that there were some (including myself) who thought that the number of hospitals in the US would decrease. Not so. There are 9% more hospitals now than 10 years ago (6210 versus 5708).

What's up with Locum Tenens jobs?

Locum Tenens physicians

In a recent survey (Staffcare) of healthcare facility staffing needs, 94% of managers surveyed reported using one or more locum tenens (LT) physicians sometime during the last 12 months. This is up from 74% in 2012. Consistent with workforce physician shortages, Primary Care physicians made up 43.5% followed by hospitalists, behavioral health and emergency department physicians. Surgeons were used as LT in 10.8% of facilities. Most (3/4) facilities use locum physicians till they staff up with permanent replacements. But other needs include substitutions for vacations, illnesses, and additions for peak times. Managers cite consistency as an advantage and cost a disadvantage with LT.

Managers rated 65% of LT physicians as excellent or good and accepted by other physicians.

 

Comment: I have seen several physicians, (even surgeons) work LT once or twice a month and not necessarily after retirement. They claim they like the flexibility and make decent money without the management headaches. Compensation depends on the demand in the specialty, type of facility (rural have more needs) and special skill sets. According to CHG Healthcare, on average physicians who work LT full-time make $32.45 per hour more than non-LT doctors. While non-surgeons are generally paid $90-200/hour, surgeons are paid by the day from $900 to 2000. LT physicians do not have to worry about malpractice coverage, credentialing, licensure, travel and housing. We may see more millenials opting for this mode adding to workforce shortages.

New volume on 'personal finance' on kindle or in pdf form

Like Volume 2 on billing, compensation, I have updated many parts of the ‘Smarter Physician’ Volume 3 on personal finance, now in kindle form or in pdf form at https://payhip.com/b/0frB

Topics include:

Chapter 1: Setting Your Course: How to Take Charge of the Financial Planning Process 

Chapter 2: Investments: What You Need to Know about Stocks and Mutual Funds

Chapter 3: Investing in Bonds and Other Fixed-Income Instruments 

Chapter 4: Do Your Assets Correlate? 

Chapter 5: Planning for Retirement 


Chapter 6: Life Insurance: Tips for Buying It and Using It 

Chapter 7: Estate Planning Essentials: Protecting Your Family and Your Legacy

Chapter 8: Disability Insurance: Protect Your Income When Illness or Injury Occur 

Chapter 9: Saving for Higher Education Expenses 

Chapter 10: It Is Your Life: Managing Your Time, Your Career, and Your Life

Some new terms to learn and yet story is the same!

Get used to the new disruptors and terms. Business models such as Vertical Integrators, Employer Activists, Technology Invaders and Health Retailers.
 

New deals occurring: CVS Health announced its intention to purchase Aetna for $69 billion. Cigna Corp. has announced an agreement to buy Express Scripts Holding Co. for $67 billion. UnitedHealth Group’s Optum purchased DaVita Medical Group for $4.9 billion. Albertsons Cos. has agreed to merge with Rite Aid Corp. (https://www.albertsons.com/albertsons-cos-and-rite-aid-merge/)


Remember the partnerships announced recently including one among Amazon, JPMorgan Chase & Co. and Berkshire Hathaway Inc. ? In 2017, 967 deals occurred in the US health services market, including healthcare payers and providers.(https://www.pwc.com/us/en/health-industries/publications/pdf/pwc-health-services-deals-insights-year-end-2017.pdf)
PWC says "The US health system is starting to reorganize to obtain more favorable pricing and reimbursements. Companies are building capabilities to cut costs and meet customer needs in more convenient and transparent ways. Companies with capabilities across vast swaths of the health ecosystem are emerging, offering consumers one-stop shops for care, treatments, financing and risk management, wellness products and services—and in the case of retailers, toys, milk and wireless speakers."
The four main types of healthcare deals are said to be:

"Vertical Integrators
What: Companies looking to control the costs of their supply chain by owning more of it
Examples: CVS Health/Aetna; UnitedHealth Group’s Optum/DaVita Medical Group; Cigna Corp./Express Scripts Holding Co.

Employer Activists
What: Employers seeking to limit the growth of their healthcare costs
Examples: JPMorgan Chase & Co., Berkshire Hathaway Inc, Amazon,
Health Transformation Alliance

Technology Invaders
What: Technology companies seeking to grab a greater foothold in healthcare
Examples: Google, Apple, Amazon, Uber, Lyft

Health Retailers
What: Retailers looking to gain market share by better understanding consumer desires and behavior, and providing some types of healthcare directly
Examples: Walmart, CVS Health, Amazon, Albertsons Companies/Rite Aid."

Bottomline: New players and more money spent on who will eventually control the 18% or more of GDP. Whatever benefits the consumer may get the focus for large mega companies is control. If cost comes down and quality improves, it may be a good side benefit but a fair sized chunk of the $ will go to for profit companies. Count me as a cynic!!

This gives all those who are pushing for a single payer government system more power and voters eventually may side with them.

(Source: PWC The New Health Economy in the age of disruption)

Turf wars between insurers & hospitals

The turf war between hospitals and insurers for physician practices continues even though hospitals started much earlier and are ahead. FP Academy reports insurers only own 2% of it's members practices. In contrast, consulting firm Avalere reports hospitals acquired 5000 practices between July 2015 and July 2016.

Insurers leading the charge are UHC with it's Optumcare subsidiary, National Insurer's Centene Corp, Humana and now Anthem. Optumcare bought the large DaVita medical group, which employs 750 PCP's for $4.9 B in December 2017. Humana went for post-acute care Kindred healthcare for $4.1 B. Humana was also part owner of Curo Health Services, a hospice operator for $1.4B.
Humana paid another $190M for a FP group in Orlando for $190M. Their reasons vary but in general are: control spending, increase influence, protect revenue stream from aggressive hospitals and increase access for it's members.
Some do it to bring down costs such as Humana's Kindred purchase to reduce cost for its Medicare Advantage group.
Not all ventures have been successful. Humana bought Concentra an urgent care provider for $790M but sold it for a small profit because it did not 'align' with it's overall strategy. Now, that is a buzz word still looking for a definition!!

The sweet spot appears to be insurers wanting to collaborate with physicians and not employing them. Physicians are then allowed to do what they do best and insurers work on streamlining processes, billing, collections etc. The totally adversarial relationship between physicians and insurers may have subsided a bit but most attitudes are still strong.

Stay tuned.

Why wait time monitoring is important


One of the most vexing problems for practices is reducing wait times while not creating chaos in the office, pay overtimes or increase stress on the physicians.

Ryu and Lee in the NEJM point to the long wait time being seen by many physicians as a badge of honor indicating how busy their practice is.

Athenahealth recently reported data based upon 4.2 million first appointments scheduled in 2016 with 13,000 providers and concluded that wait times (WT) varies significantly depending on the physician's specialty.
New patients, in their research, waited an average of 2.7 weeks after a call for their first appointment. 20% waited more than 4 weeks, 60% were seen within 2 weeks and 10% were seen the same day. Orthopedic appointments were made the fastest, an average of 13 days.
As we know some of the medical specialties like Rheumatology (44 days), Neurology (32 days), GI (26 days)are the hardest to schedule your patients with.

Well, your % of 'no shows' is going to go up resulting in an inefficient office and revenue loss. Patients waiting > 4 weeks are most likely to either not show or cancel. In addition, Ryu & Lee point out that longer wait times increase the chance of an ED visit or inpatient utilization by a factor of 8 and "each 5-to-8-day reduction in waiting time would lead to a $1-million to-$ 2-million reduction in costs."

The good news is that MGMA reports that among 1,100 medical practice leaders, 49% said their practice has changed its processes in the past year to reduce patient wait times and 22% said they are currently working on new processes.
MGMA also reports that wait times have improved by five minutes from last year, down to an average of 20 minutes total between the waiting area and the exam room. They also found that Physician-owned practices are able to see patients sooner ( up to 2 days sooner) than hospital-owned practices, almost 3/4 practices conduct surveys of patient satisfaction and less than 5 percent of claims being denied on first submission. 

Another study reports "wait times are costly for physicians, with 1 in 5 patients saying they have switched doctors because of long wait times and 30% of patients reporting they have left a doctor appointment because of a long wait." (Finnegan, 4 ways to reduce wait times for patient appointments).
Many solutions have been proposed. No one solution can or will fix all the problems permanently. Double booking can only take one so far.

Technology is an area, which is being experimented with a lot. Patient portals, emailing, texting and automated systems.()
Opening up more appointment slots with expanding hours. 

Efficiency is best planned if there is data on many aspects of patient mechanics and data on all processes in the office.
 

Sampling of important and relevant physician items

Gallup Poll
Gallup regularly monitors citizen concerns including healthcare. With all the turmoil going on, it is interesting to note that 55% of the public worries a 'great deal' about availability and affordability of their healthcare.
This is followed by crime and violence (51%), federal spending/deficits (51%), guns, drug use etc. Some issues are related to the most recent problems but healthcare is tied for either first or second for the fifth year in a row.
As the political food fight continues into the fall, expect these polls to push politicians to discuss this more.

The NPs tussle
A festering issue for PCPs and all physicians is the public face off occurring in the press between physicians and Nurse Practitioners. This is of concern. The public thinks it is all about money. Some of it is but also about what is perceived as respect or lack of it by both sides.
The shortage of physicians, the Affordable Care Act with Medicaid expansion, extensive lobbying efforts by NP organizations have put NPs in many positions where physicians were in practice. ANP, the NPs organization wants total parity nothing less. Undoubtedly, there are bad physicians as well as NPs. Thousands of Nps and physician work together harmoniously to benefit patients. However, when NPs are allowed almost full practice without physician supervision like the VA, it creates a problem. It is obviously about the cost.
The battle is being fought at many State legislatures. The same fight is occurring in many specialties not just primary care NPs. The ideal approach would be to have a dialogue but I think with this many fronts open, this tussle has gone too far ahead. Physicians generally do not come together as long as the issue does not affect them personally and so they do not get involved. Each specialty has a very narrow view and does not look at the big picture.
So, unless that happens the tide has turned towards NPs simply based upon cost. 


Physician turnover & leadership

This is an interesting piece by a radiologist detailing what radiologists change jobs.
The average turnover rate for physicians is about 11 or 12% for private and academic practices but there is a wide variance. The article lays out these reason: Partnership (or lack thereof), group dysfunction/dishonesty, Group acquisition and lost contracts, Financial dishonesty, Workload expectations, Leadership/management deficiencies, Location and family and proper staffing = security.
While this is an all compassing list, there are some obvious items that should be at the top of the list.
Certainly family and location is one of the top reasons for a change in jobs. But, I would argue that lack of leadership and poor management skills are also very important. The larger the group the more important these skills are. These skills are 'soft' skills but vital. I have been involved in physician development for over 10 years and would recommend all physicians looking ahead to lead in any capacity learn by getting trained in something we as physicians never learnt in medical school, residency or in early practice. 
See https://www.beckershospitalreview.com/hospital-management-administration/6-management-tips-for-physician-leaders.html, https://www.sciencedirect.com/science/article/pii/S0741521413019411, http://bulletin.facs.org/2017/08/2017-leadership-summit-leading-from-behind-building-resiliency-and-strengthening-nontechnical-skills/#.WsjmJIjwaUk, https://www.ncbi.nlm.nih.gov/labs/articles/27101665/ and https://medicine.osu.edu/faculty/fame/programs/leadership/pages/index.aspx
 

How do physicians see medicine today?

Survey findings based upon responses from 17,236 physicians (one million data points) from a 2016 Physician survey conducted by Merritt Hawkins regularly for the Physicians Foundation are now revealed.
1. 54% of physicians rate their morale as somewhat or very negative. Only 37% describe their feelings about the future of the medical profession as positive. 49% often or always experience feelings of burn-out and same % would not recommend the career to their children.
2. 80% of physicians are overextended or at capacity, with no time to see additional patients. 72% indicate that external factors such as third party authorizations significantly detract from the quality of care they are able to provide.27% do not see Medicare patients, or limit the number they see. Physicians spend 21% of their time on non-clinical paperwork, the equivalent of 168,000 physician FTEs not engaged in clinical activities.
3. 20% of physicians practice in groups of 101 doctors or more, up from 12% in 2012.17% of physicians are in solo practice, down from 25% in 2012. Employed physicians see 19% fewer patients than practice owners. Only 33% of physicians identify as independent practice owners or partners, down from 48.5% in 2012.
4. 48% of physicians plan to cut-back on hours, retire, take a non-clinical job, switch to “concierge” medicine, or take other steps limiting patient access to their practices. Only 43% have their compensation tied to quality or value.
5. Only 44% of physicians believe hospital employment of doctors is a positive trend.
6. Only 20% are familiar with the Medicare Access and CHIP Reauthorization Act (MACRA).
7. Only 11% of physicians say electronic health records (EHRs) have improved patient interaction, while 60% say they have detracted from patient interaction. Only 6% indicate ICD-10 has improved efficiency in their practices, while 42.5% say it has detracted from efficiency.

Comments: There are some caveats. 1/3 of respondents were Primary Care and 2/3 were surgical specialists. Average age was 51 years and 60% respondents were in  practices < 10 physicians. While the pessimism is not surprising, to me it is a little much. Physicians I know in my city are aggressive about sending their children into medicine. I also encourage friend's children to embrace medicine. The trend towards hospital employment may be slowing down. See here.
If they want to make a boatload of money for little work, then medicine may not be for them. Millenials will deal with issues much better I think. They may not have the expectations like Xers and Baby Boomers.
 

Alternative Payment Models

In 2016, 29% of total U.S. health care payments were tied to alternative payment models (APMs) compared to 23% in 2015, a 6% increase. 
This is reported by Health Care Payment Learning & Action Network (LAN),launched in March 2015 by the U.S. Department of Health and Human Services, convenes the public, private, and non-profit sectors to drive adoption and alignment of APMs with a target to push APMs to 50% by 2018. https://hcp-lan.org/groups/apm-fpt-work-products/apm-report/
Data is based upon coverage of 84% of lives or 245 million people. 43% are still covered by traditional fee for service (FFS) plans or in Category 1.
28% of health care dollars are paid through Category 2 or pay-for-performance or care coordination fees. A major shift has occurred to this catgeory from FFS.
Finally, 29% of health care dollars paid out in Categories 3 and 4 or shared savings, shared risk, bundled payments, or population-based payments. This category accounts for payment of approximately $354.5 billion dollars nationally.

Meanwhile, the number of ACOs in 2016 was about 474 compared to 404 in 2015 and 353 in 2014.MACRA is projected to accelerate the trend towars physicina employment by large practices or health systems.
A survey of healthcare CEOs indicates their view: 91% see continued growth in the employment area,  73% see increased stress for physicians (surprised?), 52% see more practices taking on risk based contracts and 42% see more physicians leaving Medicare.

Comment: And by the way, healthcare costs are now projected to bump up to 6.5% in 2018 from a steady 6% or less. (Source PWC data) For ordinary people, From 2011 to 2016, the average health premium for family coverage purchased through an employer rose 20 percent. In the same period, wages increased just 11 percent.

For physicians, the stress continues to rise. Burnout rates are up to 50%. Pressure to cut out 'low value' services is on. Physicians indicate fears of malpractice, patient demand and satisfaction, concern about missing an underlying, serious diagnosis still exist with no relief in sight.
A Harvard Business Review article recently suggests a link betwen Work Life balance and what you saw your parents do!!
Be sure to read this.
https://hbr.org/2017/10/your-feelings-about-work-life-balance-are-shaped-by-what-you-saw-your-parents-do
 

Want to retire?

Recent surveys show > 50% prevalence of burnout, frustration with extra time of almost 2 hours daily with EMR, increasing overheads, constant change in compensation by insurers etc.

You probably know 'retired' physician friends who fall in three camps.
First, those who are not really retired, work part-time maintain a flexible schedule and yet keep their hands in either clinical practice or related healthcare activity.
Second, those who are truly retired and bored to death and wish they had not.
Third, retired completely but have enough hobbies and lead a busy and productive life.

A recent survey by CompHealth shows that 30% of physicians are 60 years of age or older (26% in 2010) and the average age of actively licensed physicians is 51. The average age at which physicians intend to retire is 68. Surgical specialties are the least excited about retiring. Of those intending to work past 65, 58% say they love patient care, 56% enjoy the social aspect and 50% because  they wish to maintain their current lifestyle (aka income).
The survey reveals that > 90% of physicians say social interaction is at the top of the list of things they will miss upon retirement. So, they are holding off retirement and 76% look forward to more travel when they do retire.
Almost 51% of physicians are working part-time.

Conclusion:Like everyone I wish I had done some things differently. One of the things I did right was life/work balance. 44% of physicians in the survey wish they had done that. My advice, which seems to resonate with millenials, is join practices where this is a priority.
Another survey finding is that physicians wish they had started retirement planninge earlier. Again, of the few things I did right, this was drummed in to me. Another bit of advice for younger physicians is this: start planning on hobbies or planning for what will occupy your life when you do retire.
The planning should start ten years before your target date. Of course, life happens and the plan may need tweaking. That neck pain may get worse and curtail the tennis game. Or, golf game may go from 18 holes twice a week to nine holes every other week. It makes sense to have several hobbies/interests some indoors and some outdoors to keep you busy. I also recommend staying connected to something you know well. Healthcare. If patient care is tiresome, choose something else related. Teaching, clinical research, mentoring residents or students, writing about healthcare etc. Take my word for it: Your spouse will be happier you are busy and not home all day!

Do physicians really want single payer?

A recent survey of physicians by Merritt Hawkins shows a 56% support single payer coverage in the US. In 2008, 58% of physicians opposed single-payer. This has coincided with < 50% of physicians owning their own practice. Also coincided with decreasing morale and frustration with more and more time with EMR and rising practice costs.
Any correlation? Probably. Physicians are tired with endless red tape, billing nightmares and appeals to mindless clerks.

Single payer means that one payer (Government) will control the massive payment system through its bureacracy. Can physicians really be in favor of exchanging insurance company bureacrats for facelss, government gnomes?
Senator Sanders (VT) has pushed  single payer, in effect Medicare for all. There is an attraction there for certain. At least, there are pre-determined rules for Medicare, reasonable certain payment and an appeal system with recourse through Congress. The cynics opposed to the Affordable Care Act (aka Obamacare) say that it was designed to fail and lead to single payer payment system.

Sally Pipes a long time opponent of government payer has laid out her objections here https://www.forbes.com/sites/sallypipes/2017/10/02/docs-need-to-inoculate-themselves-against-single-payer/#37d4a3f33258.

She points out that the only way Government can control costs is either ration care or pay physicians less. Ms. Pipes says "The American Hospital Association estimates that Medicare and Medicaid underpaid healthcare providers by nearly $58 billion in 2015. Hospitals received 88 cents for every dollar they spent treating Medicare patients, and 90 cents for each dollar spent treating those on Medicaid."
Most physicians know that they count on private insurance payments to cover the under payment by Medicaid for instance.
Another view is expressed by Chris Conover here: https://www.forbes.com/sites/theapothecary/2017/10/07/the-5-reason-bernie-sanders-medicare-for-all-single-payer-plan-is-a-singularly-bad-idea/#1d26c2992f80

He estimates that Senator Sanders plan has hidden costs of $1.25 trillion to $2.8 trillion a year or $3,800 to $8,500 per U.S. resident!. In his analysis, he cites several cost estimates worth reading.

Conclusion: While I do not think Congress is anywhere close to a single payer system, I am not surprised at physicians simply being tired of fighting. We do not have the moral courage (translated and transferred to our elected politicians) to face reality. The can keeps getting kicked down the road with the hope that some miracle will happen and the $201 T we owe will just disappear.
The cost of healthcare is a major contributor to our financial disorder.
 

Future of healthcare & physicians

Bain & Company, a major consulting group recently reported that they feel that it will take a hands-on approach by physicians as the best way to shape a better future for healthcare.

Their survey (conducted in 2017, included a total of 980 physicians, 100 procurement officers and 100 finance officers from the US) shows that “bringing physicians back into the decision-making process helps create greater momentum for change. Physicians who are not aligned and engaged with their organizations have more reasons to resist new structures and systems, such as value based payment models. By contrast, those who have a say in management decisions are much more satisfied with their working environment and more willing to lead change.” They also state “60% of the physicians we surveyed believe it will become more difficult to deliver high-quality care in the next two years as they struggle to cope with a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape.”

  • > 70% still prefer fee-for-service even though they recognize the cost because they don’t yet believe that vale based payments work.
  • > 80% of surgeons and others involved in hospital purchases cooperate with hospitals with dealing with vendors.
  • “Seventy percent of nonsurgical physicians believe payer restrictions (prior authorization requirements, appeals process) limit their prescribing decisions, and 59% believe these restrictions decrease their ability to deliver high-quality care, both percentages up slightly from our survey in 2015. However, just how constrained physicians feel varies by specialty.”
  • > 2/3 believe delivering care will be even more difficult in two years.

Are Physicians ready for MACRA?

Starting in 2019, the Quality Payment program (QPP), which was put into place by the Medicare Access and CHIP authorization ACT (MACRA) of 2015, will begging to adjust payments to physicians. The Merit-based Incentive payment system or MIPS is one option and calls for reporting some quality measures and EMR use. The other option the Advanced Alternative Payment Model (APM) will consist of a 5% lump sum payment (and exclusion from MIPS) if a physician has a certain portion of their revenue or patients in APM. This was in place of repeal of the SGR or Sustainable Growth rate

A KPG/AMA survey of 1000 practicing physicians showed that 51% of physicians were somewhat aware if MACRA/MIPS and 70% were preparing to meet QPP requirements in 2017. Only 8% feel ‘very prepared’ for long-term success. There was no difference between primary care or specialist physicians.

56% expect to participate in MIPS in 2017 and 2% expect to meet APM standards. However, of those participating in MIPS 90% felt that these requirements were burdensome with the time requirement representing the most challenge. Multi-specialty practices were more knowledgeable about issues. The most difficult questions to understand were: how the quality basis was going to be measured and reported and which practice improvements were going to be acceptable.

As far as lower fee-for-service payments from Medicare in 2017, about 500,000 clinicians (half physicians) are anticipated to lose about 2% in payments because Physician Quality Reporting System (PQRS) in 2015.( http://www.medscape.com/viewarticle/881870)

An interesting take on MACRA and increasing physician employment by hospitals comes from FITCH, the bond rating agency. "MACRA could provide the nudge needed for markets with less physician employment and integration to consolidate and integrate physicians, disrupting long standing referral patterns and increasing costs as these markets sort themselves out," according to Fitch Ratings. (http://www.beckershospitalreview.com/hospital-physician-relationships/fitch-macra-encourages-hospital-employment-of-physicians.html) A FITCH director also says “"Employing physicians, when executed well, can help solidify a hospital's market position and grow its clinical footprint - offsetting their associated expenses."

 

Comment: The operative phrase here is ‘when executed well!” We all know that part is rare.

Best and worst states for physicians

WalletHub recently posted their analysis of the best and worst states for physicians in the USA. (https://wallethub.com/edu/best-and-worst-states-for-doctors/11376/)

They take into account: average annual wages, average monthly starting wage, insured population rate, hospitals per capita, quality of the public hospital system, primary care shortage, projected share of elderly, current and projected competition, number of CME credits required, punitiveness of state medical board, Malpractice Award Payout Amount per Capita, Annual Malpractice Liability Insurance Rate and Presence of Interstate Medical Licensure Compact Law. They used their own weighting system.

Best states with highest score: Iowa, Minnesota, Idaho, Wisconsin, Kansas etc.

Worst states: No surprises here, mostly East Coast states like NY, NJ,MA, MD, CT etc.

I might disagree with their parameters and the weighting but in general most of us know what they are saying. Most physicians give up some things because of family, quality of life but some because it would be a big hassle to move and start all over again.

One of my medical school classmates moved after almost 30 years to FLA and has been very happy. (You know who you are!) It takes courage but eventually the circumstances and even the weather gets to you.

Why are Locum Tenens positions taking off??

Growth of locum tenens physicians

 

Locum tenens (meaning ‘take the place of’) is a perfect match for hospitals and physicians for many reasons.

In a survey conducted by Staff Care, healthcare facility mangers usedLT all 91% at least once in 2014, 73% at least once in a typical month and 18%  said they used 4 or more LT a month. Primary care physicians (PCP) were in the most in demand as almost 35% of stated they used PCPs at least once in 2014. Following PCP's behavioral health was next at 30%, hospitalists at 22% and surgeons at 14.7%.

68% of these managers said they used LT primarily to fill in till they hired a permanent physician and 71% rated the LT physician skills as excellent or good and 81% felt it was worth the cost. Next, LT is used to fill in a vacancy left by a departing physician. With supply constant and demand rising, LT is just one option for health systems. These physicians have already been screened and vetted and provide continuity of care and prevent loss of revenue due to a vacancy. Daily rates can vary from several hundred to 41500 a day or more.

In a Merritt Hawkins 2014 survey for the Physicians Foundation, 27.6 of physicians were considering cutting back or retiring and 9% working LT. The latter group has increased from6.4% on 2012 to 9% in 2014 and younger physicians choosing LT is increasing. That is, almost 65,000 physicians were considering LT. Flexibility, pay rates, a political nature of work, travel, professional development are main reasons for choosing LT. Disadvantages stated include travel, uncertainty of work, lack of benefits and learning new rules/equipment.

It appears that younger physicians are increasingly choosing LT and for older physicians over half indicate they start LT work in mid-career having walked away from hassles, rising overhead and politics and clash of values at work. What will this do for increasing shortage of full-time physicians? Increasing utilization of ANP’s and PA’s will not be enough.

Jeremy Siegel says he was right about the stock market!

Jeremy Siegel is the Russell E. Palmer Professor of Finance at the Wharton School at Upenn.

His first book was ‘Stocks for the long run’ in 1994 and his second book was ‘The future for investors in 2005. http://www.jeremysiegel.com/ He is a regular on several TV shows and newspaper columns as an expert on finance and markets and is known as the ‘wizard of Wharton.’

In his first book he said that were the “best long-term investment and that buying and holding through volatility is the best approach for investors.” http://www.wsj.com/articles/as-dow-nears-20000-stock-market-believer-jeremy-siegel-gets-a-told-you-so-moment-1481371200

He says his research shows that “generated 6.7% in total annual returns, after adjusting for inflation, compared with 3.6% for U.S. government bonds and 0.6% for gold.” He is continuing to say that the stock market will go higher because of the anticipated cut in personal and corporate taxes as well as decrease in regulations. Most people are worried about not only the volatility but an overheated market with a PE of about 24 for the S&P and 21 for the Dow and remember the dot-com crash when the PE of the S&P was close to 30. He favors passive investing and including global stocks as part of a balanced portfolio.

His view on India versus China? “By 2060, India’s economy is projected to be larger than China’s because of its greater population growth. India is forecast to produce about one-quarter of world GDP from 2040 through the rest of this century.”

In April 2013, when the Dow was trading around 14,600, he said it would end the year between 16,000 and 17,000. It closed at 16,577.

In January 2014, he predicted the Dow would finish the year near 18,000. It finished at 17,823.

In March 2015 he said “Dow 20,000, Here We Come.”

http://www.thinkadvisor.com/2015/03/27/jeremy-siegel-dow-20000-here-we-come

 

I guess we should pay him some attention if we have the stomach for volatility!!

What does the ‘dream’ team have in mind for CMS (Medicare & Medicaid)?

That is what President-elect Trump called his proposed nominees Dr. Price and Ms. Verma as Secretary of Health & Human Services and Administrator Centers for Medicare & Medicaid, respectively.

Dr. Price is a six-term Republican Georgia Congressman from Georgia, practiced as an Orthopedic Surgeon in Atlanta and also served on Speaker Ryan’s task force, which authored “A Better Way.” He proposed his own 2015 alternative to the Affordable Care Act (aka Obamacare) called “Empowering Patients First Act”.  His 2015 comprehensive proposal has several items common to other Republican bills and includes federal block grants to states for establishing high-risk pools for people with pre-existing conditions, replaces means-tested tax credits in the ACA with fixed-dollar, age-adjusted premium tax credits, expansion of health savings accounts, including preexisting condition coverage, sale of insurance across state lines, association health plans, balance billing and ability of physicians to collectively bargain with insurer companies etc.

Ms. Seema Verma is the President, CEO and founder of SVC, Inc., a national health policy consulting company.  For 20 years, Ms. Verma has consulted and worked on projects dealing with Medicaid, insurance, and public health as well as several Governor's offices, State Medicaid agencies, State Health Departments, State Departments of Insurance, as well as the federal government, private companies and foundations. Vice-President Pence had Ms. Verma design the state of Indiana’s Healthy Indiana Plan (HIP), which was also then used as a model for Michigan, Maine etc. She also negotiated the waiver of the Indiana HIP program design (1115 Medicaid waiver) with the Centers for Medicare and Medicaid Services (CMS), supported implementation efforts, developed the waiver renewal application and negotiated a financial agreement with the Indiana Hospital Association for the Hospital Assessment Fee program.

Indiana’s Medicaid expansion has covered as many as 410,000 persons and was different in that it supported ‘personal responsibility’ in having those who were able to afford it pay something towards their healthcare as well as take some responsibility for ther health. Although the poor were not required to pay any premiums, of those who were able to afford minimal monthly premiums as low as $4, non-payment made them ineligible for as many services and warranted a six-month lockout from coverage if even a single payment was missed.

Summary: Most experts predict that most parts of the ACA may be repealed but the effects of ACA may be delayed to prevent loss of coverage for over 20 million people. This is likely for several reasons. First, new legislation will need to be ‘scored’ (budget positive/negative) by the Congressional Budget Office and then passed by both houses. Second, if ACA is repealed all the taxes to fund any replacement go away including taxes such as the Medicare surcharge tax, tax on individual investments, health insurer fees, taxes onmakers and importers of drugs. Finally, people covered by exchanges and on current Medicaid expansion plans will gradually switch over to the new replacement plan. Will there be enough revenue if these taxes are repealed to fund the new plan? The President-elect has called for insurance policies to be sold across state lines. However, this may mean 50 different regulatory bodies to oversee insurance companies. How will this work in practice? A Sermo survey of 2,239 physicians including VS showed a 50/50 split on whether to keep or repeal the CA whereas in a previous survey by the Physicians Foundation, 46 percent of physicians gave Obamacare a D or F grade.

We should get a glimpse of the answer within a few weeks.