The annual financial conference focused on ways for healthcare organizations to improve revenue cycle operations and effectively shift towards value-based care.
The Medical Group Management Association (MGMA) 19 Financial Conference in Las Vegas wrapped up Tuesday afternoon, after two days of sessions featuring speakers discussing effective approaches to financial stability and navigating regulatory changes.
Among the presentation topics were the potential for blockchain to disrupt the patient data pipeline, techniques to bolster value-based contracting, reducing waste in revenue cycle operations, and considering changes to existing physician compensation models.
Below are some highlights about the statistics and trends healthcare finance leaders are following, along with commentary from MGMA CEO Dr. Halee Fischer-Wright.
Fiscal year 2018 revenue goals:
- 35% of attendees fell short
- 32% of attendees exceeded expectations
- 25% of attendees were on target
- 6% of attendees had no budget
- 2% of attendees wewunsure
Wright told HealthLeaders that in the era of shrinking margins and declining reimbursements, healthcare leaders are becoming more aware of the need to properly manage their organization's finances.
"The thought behind this conference is to promote financial education in a medical practice setting," Wright said. "It's about what you need to do to run your practice efficiently and effectively in a financial perspective. And there are also the higher levels of education regarding the trends in financial reimbursement."
Majority of physicians are not satisfied with their compensation models
In a session hosted Monday, the topic of physician compensation was detailed in depth while measurable metrics associated with the move towards quality are still forthcoming.
Most attendees indicated that they are looking to change their current physician compensation model, aiming to moving towards value-based contracting and reward high performers in their organization.
Since only 17% of physicians operate in a private practice, down from 41% in 1983, medical groups need to devise compensation models that effectively pay physicians and incentivize them for high-quality work.
Four major compensation models were discussed with pros and cons for everyone, including straight salary, guaranteed income, equal share, and productivity-based.
Among attendees, the most popular compensation model was productivity, garnering 42%, while no respondents registered for guaranteed income.
It is important to consider how shifting models will affect the workload seen by physicians though, as employed physicians see approximately 20% less patients than physicians working under incentive models, though it is not simple enough to make a sudden shift for a new compensation model.
Many attendees cited selection bias among physicians, primarily lifestyle preferences, as factors in what model they are willing to work under. This is why a blended model could be the most comprehensive option in the future, as it combines productivity, value, and citizenship.
Another outstanding issue remains in promoting physician happiness, as most attendees stated that physicians have increasingly spent more time conducting nonclinical tasks, such as handling electronic medical records, that take them away from their traditional roles.
Wright told HealthLeaders that AI has the potential to ease the burden facing physicians so they can return to their clinical duties.
"[AI] makes physicians happier, it makes patients happier, creates better outcomes, and decreases costs," Wright said. "This all serves the greater purpose of decreasing costs of care, enhacing satisfaction, and providing better quality."
Why health system physician practices lose money
- Poor revenue cycle management (RCM), commercial payer rates lacking, poor payer mix, and low-volume locations.
- Operating expenses
- Higher costs for shared services, use of more resources, inefficient and sub-optimized operations.
- Physician comp
- The largest line item in any practice.
How to stem the tide:
- Identify the sources of losses.
- Quantify the losses.
- Rectify what you can, or "fix the fixable."
- Consider moving ancillaries back into the practice.
Value-based contracting goes beyond quality, and focuses on the additional goal of getting rid of waste.
The ideal care system is found at the middle of satisfied providers, best quality care, and affordability. This also requires more alignment, more investment, and more infrastructure as the value-based shift gears up.
Annual waste by the numbers:
- $210 billion in unnecessary services
- $190 billion in excessive admin costs
- $130 billion ininefficiently delivered services
- $105 billion in prices that are too high
- $75 billion in fraud
- $55 billion in missed prevention opportunities
Despite the potential to dramatically reduce waste and improve operations, there are still plenty of routine obstacles ahead of organizations.
Scott Steele JD, CMPE, FACHE, who serves as CEO of Centric Physicians, told HealthLeaders that opportunities remain available in the value-based care space and that most organizations are starting to experiment with taking on more risk.
"[Value-based care] is kind of like being a three-year old looking at the swimming pool; it looks really cool but I don't know how to swim," Steele said. "We probably shouldn't jump in, and that's where we are, because one of the things that we're starting to do this year and the next couple of years is [work on] our payer contracting, and we're going to be pushing into getting some reimbursement for value."
- An inadequate understanding of baseline in 'pay for performance' measures.
- Too much risk and not enough data.
- Check-in points and reporting requirements not established.
- Success is not defined or not clearly articulated at start.
Developing a value proposition:
- Articulate the practice's vital stats
- Understand how your practice compares to the competition
- Research payer market position/goals
- Tell your story in written format, make it appealing and simple
In determining an effective value proposition, the final product should align incentives for the patient, provider, and payer to create the best possible outcome for a reasonable investment.
Jack O'Brien is the finance editor at HealthLeaders.