10 Healthcare Reform Market Changes Affecting Physicians

Laura P. Jacobs, MPH, for HealthLeaders Media, March 16, 2011

While the specific regulations from the Patient Protection and Affordable Care Act (“ACA”) are still evolving, the “barometer reading” for change is clear. Market place trends and healthcare reform have clear implications for physicians. The pace of change will depend on specific market dynamics, private payer initiatives, and the degree of physician organization and physician-hospital integration, not to mention government action. 

Physicians in private practice have been faced with a series of challenges and opportunities in recent years, and some assume that “this too shall pass.” The risk, though, of ignoring market trends is to face the downside of evolution – extinction. Here are the top ten ways in which these market forces, dominated by healthcare reform, affect physicians. They may not all affect you now, but your radar should be scanning for “blips” of change in your market.

1.      Traditional payment will decline. Since the ACA did not “fix” the Medicare formula driven by the sustainable growth rate (“SGR”), there will be threats of decreases in the traditional Medicare fee schedule – this year close to 30 percent. While it likely that these decreases will be periodically “patched” by Congressional action, it is unlikely that Medicare fees will increase in the near future. Since many private payers link their fee schedules to Medicare rates, this means no increases for the foreseeable future. For some specialties, it will mean decreases, since Medicare and some other payers are shifting dollars from specialty services to primary care – but not adding any new money to the “pot.” The only hope of “upside” will come through new payment models such as bundled payment, shared savings, and pay-for-performance.

2.      EMR and connectivity are “table stakes.” With the passage of the American Recovery and Reinvestment Act of 2009 (“ARRA”), physicians have the opportunity to earn incentives up to $44,000 from Medicare for implementation of electronic medical records (“EMR”) that meet “meaningful use” criteria. But after 2015, penalties are imposed if practices fail to meet these criteria. Additionally, the need to be clinically integrated with other physicians and hospitals is growing due to various new payment methodologies, not to mention patient expectations. Within the next few years, it will not be a “benefit” to have an EMR AND connectivity with other providers, it will be a requirement to stay in the game.


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