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Looking Upstream

Rick Johnson, for HealthLeaders News, November 8, 2007

Over the past few weeks, I've been on the road at conferences and meetings talking with healthcare administration and physician leaders. In my conversations with these industry experts, I've asked them to forecast changes that will have the most impact on physicians. Here are five predictions for the near-future:

1. Small practices will perform a disappearing act. We're already seeing many solo and small physician practices close shop. Many of these join large multi-specialty groups that can negotiate with payers, gain operational efficiencies of scale, and better afford capital investments. Simply put, costs are too high and reimbursement is too low for mom-and-pop shops. Expect this trend to continue--especially as more experienced doctors look to sell their practices and fewer emerging physicians look to start their own.

2. Family docs will step aside. In the October HealthLeaders magazine, our cover story investigated what's often referred to as the "looming physician shortage." Many regions are already feeling the impact of this shortage. With family physicians taking the biggest reimbursement hit over the years, we're seeing fewer new physicians entering primary care. Since the need isn't going way, patients are getting care from nurse practitioners--in the office setting as well as retail clinics. One chief medical officer told me recently that he thinks family physicians will someday be a profession of the past. He said NPs are already providing primary care--and in many cases they do it better.

3. Hospitals will keep hiring physicians. One development in healthcare that I find somewhat surprising is how quickly hospitals have taken to hiring physicians. No doubt necessity has required hospitals to break from the traditional medical staff model. Hospitalists have proven effective at improving quality of care and ED throughput, but now many administrators are bringing on orthopedic-, neuro- and cardio-traumatologists. The upside of these specialists has been widely reported, but one potential downside is that independent physicians have fewer reasons to enter the hospital. While the rise of the hospital-based physician might improve coverage, quality, efficiency, and the lifestyles of the medical staff, are they also creating another barrier between independent docs and the hospital?

4. Patients will continue to foot more of the bill. Big employers keep grumbling at the high cost of healthcare. And some have been predicting alternative coverage models for years. Even if you don't buy into the healthcare consumerism movement, the fact is that copays keep climbing. With more of their own money as stake, patients are going to become more selective and demanding about their healthcare purchases. Not only will medical groups need to react to these fickle consumers, but they'll also need good systems in place to be sure patients pay their bills. Collecting from third-party payers might seem like a chore, but consider the challenge of chasing down individual patients.

5. Fewer doctors will take Medicare, Medicaid, and charity care. We've heard this one a few times, haven't we? It seems like whenever Medicare releases the physician fee schedule, the major physician and medical group associations warn that docs will stop accepting Medicare patients. Now practices face a 10.1 percent payment cut with Medicare's release of the 2008 physician fee schedule. Last week at the MGMA conference, I spoke with the association's president, Bill Jessee. He talked about how reimbursement declines are affecting physicians and how he thinks practices will respond. Doctors today have to deal with the high cost of running a practice and lower reimbursement. Factor in that many are practicing in large multi-specialty groups and hospitals. What you're left with are fewer physicians in the community who can afford to care for uninsured and underinsured patients.

I didn't intend for this list to seem so dismal, but these are the things I've heard as I've been on the road the last few weeks. If you have comments, questions, or concerns about what my sources are saying, please drop me a note and correct me. I'd be especially interested in any predictions that are favorable for healthcare. Those are pretty hard to come by.


Rick Johnson is a senior editor with HealthLeaders Media. He can be reached at rjohnson@healthleadersmedia.com.

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