"About 6% to 7% of physicians consider locum tenens to be their fulltime occupation and we anticipate that will grow to 11% of the workforce within the next 18 months," says the head of a healthcare temporary staffing firm.
More new physicians entering the workforce are opting for jobs as locum tenens in hospitals, physician practices, and other provider sites, an industry survey shows.
Staff Care, a healthcare temporary staffing firm based in Irving, TX, polled 2,087 locum tenens physicians and found that 21% began temp work immediately after finishing their medical training. That's up from 16% in 2013 and 14% in 2012. A separate survey by The Physicians Foundation found that 46% of doctors will change their practice styles within three years, and 9% plan to work locum tenens.
Staff Care President Sean Ebner says a growing number of physicians are gravitating toward nontraditional work models, including employment by a hospital or a large practice, part-time practice, concierge medicine, and administrative-only practice.
"The physician workforce is evolving. About 6% to 7% of physicians consider locum tenens to be their fulltime occupation and we anticipate that will grow to 11% of the workforce within the next 18 months," Ebner says.
"A lot of physicians that did locum tenens had sold their practice, they were in quasi-retirement and came back as locums. That demographic is changing significantly, where new physicians and mid-career physicians are making the choice for flexibility, working in different environments, being able to focus on the practice of medicine and not the politics of the organization, the reimbursement facilities and all of the bureaucracy around the business of medicine."
Staff Care also found that 91% of the 259 healthcare facility managers who responded to the survey said they had used a locum tenens physician at least once in the past year, and 42% said they are looking for one or more locum tenens physicians. Primary care physicians are in the most demand as locum tenens, followed by psychiatrists and other behavioral health specialists, and hospitalists.
"From a healthcare system perspective there is a recognition of leveraging physicians in a temporary contingent format to deal with peaks and valley of census and demand rather than committing to fixed costs and having to staff to a certain threshold for the whole year irrespective of the demands for those services," Ebner says. "It puts a big tax on those systems. Sometimes they have to overstaff and sometimes they stretch their community too far."
About 44,000 physicians nationwide practice as locum tenens, up from 26,000 12 years ago, Ebner says, adding that there's no timeline on when, if ever, locum tenens workers will pursue a more permanent setting. "Physicians do come in and out of locum tenens for a number of reasons," he says.
"Some physicians want to earn an income if they switch specialties from what they first signed up for out of medical school and there is a lag in between fellowship programs. More importantly it gives physicians the flexibility to kick the tires in a number of different settings, geographies and delivery systems before settling down."
The survey suggests that demand also is growing for temporary non-physician clinicians such as nurse practitioners and physician assistants.
In 2012, 4.8% of healthcare facility managers surveyed by Staff Care said they had used locum tenens NPs in the previous 12 months. In 2014, that number rose to 17.4%. The number of PAs rose from 4.7% in 2012 to 7.6% in 2013. The survey findings are consistent with those from a benchmark survey released last summer by the National Commission on Certification of Physician Assistants.
The ruling has far-ranging implications for state regulatory boards overseeing professional activities, including those of physicians, hospitals, and health systems.
The U.S. Supreme Court this week upheld an appeals court ruling that states must actively supervise private market participants sitting on state regulatory boards.
The justices were asked to decide if a state regulatory board is exempt from federal antitrust laws under the state action doctrine if its members are "market participants" elected by other market participants.
The eight-member North Carolina dental board, which includes six dentists elected by other dentists, had been the subject of a complaint by the FTC in 2010 for violations of the FTC Act after the board banned non-dentists operating in mall kiosks from performing discount teeth-whitening procedures.
A federal district court rejected the board's initial complaint. Last spring, the U.S. Court of Appeals for the Fourth Circuitsided with the FTC and noted that the dental examiners board was composed of dentists who stood to gain financially by restricting the practice.
Writing for the majority, Justice Anthony Kennedy said the Sherman Antitrust Act protects competition and respect federalism. "It does not authorize the states to abandon markets to the unsupervised control of active market participants, whether trade association or hybrid agencies. If a state wants to rely on active market participants as regulators, it must provide active supervision if state-action immunity under Parker is to be invoked."
The high court's three most-conservative judges sided with the dental board. Writing in dissent, Justice Samuel Alito noted that the majority's ruling "will create practice problems and is likely to have far-reaching effects on the states' regulation of professions."
"As a result of today's decision, states may find it necessary to change the composition of medical, dental, and other boards, but it is not clear what sort of changes are needed to satisfy the test that the Court now adopts," Alito wrote.
Alito was joined in dissent by Justices Antonin Scalia and Clarence Thomas.
Reaction
Reaction to the ruling was mixed.
Bobby D. White, COO for the North Carolina Board of Dental Examiners, said in an email exchange with HealthLeaders Media that the court ruling "fundamentally misconstrues the purpose of state-action doctrine."
"The point of the doctrine is to respect federalism, in that there's no indication in the Sherman Act that Congress intended to displace state regulatory activity. That's especially true in this context: professional regulatory boards have always been structured this way, and yet no one until this case ever argued that the Sherman Act subjected them to liability for this reason. That's the elephant in the room that Alito's dissent emphasized and that Kennedy's majority ignored."
As a result of the ruling, White says virtually every professional regulatory board in the nation will have to change its structure and supervision or the activities it performs.
"And since all of those changes will take time (and often legislative activity), the opinion threatens to massively disrupt professional regulation," White said.
The American Medical Association had filed an amicus brief supporting the dental board's antitrust immunity. Citing Alito's dissent, AMA President Robert M. Wah, MD, in a statement this week said the ruling "'will spawn confusion' by creating far reaching-effects on the jurisdiction of states to regulate medicine and protect patient safety. The AMA will work with other physician groups to secure policy changes to reinforce long held antitrust protections for activities conducted under state authority to protect patients."
Federal Trade Commission Chairwoman Edith Ramirez applauded the ruling.
"We are pleased with the Supreme Court's recognition that the antitrust laws limit the ability of market incumbents to suppress competition through state professional boards," Ramirez said in prepared remarks. "We will remain vigilant through our enforcement initiatives and advocacy to safeguard competition and ensure that American consumers benefit from entrepreneurial initiative."
The Practical Effects
Three antitrust experts reached for comment about the practical effects of the ruling all said that states should take note of the ruling, but none said the ruling would create regulatory chaos, nor was it was particularly burdensome.
Deborah Gersh, the Chicago-based co-chair of Ropes & Gray's health care practice, says the ruling has prompted an unfounded and "alarmist mindset with respect to the implications to boards and how no doctors, dentist or lawyers will almost ever serve on a board again."
"On this board, you had independent dentists in a majority making the decision. It's a little bit like the foxes guarding the henhouse from a competitive standpoint. That is the basis for the ruling," Gersh says.
"As a practical matter, the opinion is really focusing on individuals who are sitting on a board where there is no active state supervision. The state really isn't telling them what the parameters are, or their roles and responsibilities. So there is the risk with competitors monitoring other competitors, individuals monitoring their competitors, and what they are saying is we are not going to give you immunity if this is how the state chooses to have this board set up."
"There are certainly alternatives that the state can do. They can impose more guidelines and supervisory requirements so that there are limitations on where the state provides them with specific thing they are to regulate."
Jay L. Levine, a Washington, D.C.-based partner at Porter Wright Morris & Arthur LLP, says states may likely have to examine how they establish and supervise boards, but they're supposed to do that anyway.
"All it says is that a state board that is comprised of private actors who are competitors, even when they act under the cover of state law, need active state supervision," Levine says.
"The legislature, when they create the paradigm for enforcing their policy, need to include some mechanisms to actively supervise people acting under their legislative guidance. Obviously that requires a little bit more of an infrastructure than if that wasn't required, but at the same time, it's not as if states don't know how to do that and can't do that if they are so inclined."
Levine says the ruling likely will not prompt widespread litigation in other states.
"If it is not a board composed of private actors who are competitors, I don't know that you are going to have the same kind of arguments they did in North Carolina," he says. "There are probably boards across the country that are similar in composition, but I don't think that they are so ubiquitous that we need to fear that the floodgates are open and the courts are going to be inundated with antitrust lawsuits against state boards."
Michael L. Sibarium, a Washington, DC-based litigator and partner with Pillsbury, says the ruling should prompt introspection.
"If you're sitting on one of these boards the first question you should ask is 'how is our board structured under legislative authority and who is on it?' The next question is 'if you are structured in a way as to require active supervision to get to state action immunity do you have it?' Those are the questions you should be asking," Sibarium says.
The question left unanswered in the dental board ruling, Sibarium says, is whether or not individual members of these regulatory boards can be held liable for their decisions.
"They point out a number of options where states can grant immunity," he says, "but they leave that question for another day, whether people would have individual liability."
Research suggests that fears about what would happen to healthcare access with the addition of millions of people to the insurance rolls may have been overblown or at least unfounded.
One concern about the Patient Protection and Affordable Care Act has been the anticipated longer wait times for physician visits with the addition of millions of newly insured people who would gain coverage through Medicaid expansion or the health insurance markets.
We've heard the doomsday scenarios about clogged emergency departments full of people who can't find a primary care physician, are forced to use the most expensive care access point for non-emergency care, thus defeating the very purpose of the reforms.
It's a topic we've covered a lot here, and this concern over wait times carries a simple and compelling reasoning: If there aren't enough physicians now, and the shortage is expected to worsen as more physicians retire and the nation grows older, what will happen to healthcare access when millions more people are added to the insurance rolls?
A study out today from The Commonwealth Fund suggests that those fears—to this point—may have been misplaced and overblown or at least unfounded.
Examining state-level estimates for increased demand for physician and hospital services, the study projects that the 11 million newly insured lives translates into 1.34 primary care office visits per week, an increase of 3.8% nationally, and 1.2 to 11 additional hospital outpatient visits per week, an increase of 2.6% nationally. [The methodology is detailed in the report. I didn't delve into it for the sake of expediency. If you think the methodology is flawed, please explain why in our comments section below. I'd also be interested in hearing from providers about their experiences with patient volumes and wait times over the past year since the ACA has gone into effect.]
"Increases of the magnitude likely to be generated by the Affordable Care Act will have modest effects on the demand for health services, and the existing supply of providers should be sufficient to accommodate this increased demand," the study concludes.
No Surprise
Sherry Glied, a coauthor of the study, and a dean at New York University's Robert F. Wagner School of Public Service, told me that her findings are not surprising.
"There are a couple of things you want to think about as you work through what the effects might be on medical utilization," she says. "One important one is that the people who use the most services in the U.S. now are on Medicare, seniors, and people who are disabled and on Medicaid and these groups are already covered. So, most of the people who are gaining health insurance because of the ACA are people who are relatively healthy. They don't use a lot of visits a year because they are relatively healthy people."
These relatively healthy people are buying insurance for protection against the unlikely event that they'll need it.
"In most cases they are not going to use a lot of visits, so the base number of visits that we are already producing are the bulk of visits that will ever be produced," Glied says. "Those seniors are already getting their visits and those disabled are already getting their visits and we are adding just incrementally these newly insured people. Even when they were uninsured, they still went to the doctor, just not very often. So it's only the increment over that."
Geographic Variations
What surprised Glied in her research was the astonishing state-to-state disparity in physician wait times that has little to do with the physician-to-patient ratios.
"This is what struck us in writing the paper," Glied says. "There is not a clean mapping between the number of doctors in practice in an area and the number of visits they produce or the timing of those visits. In fact, it is almost perverse. Some of the places in the country that have the most doctors per person actually have the longest waits for visits."
In other words, care access is uncoordinated.
"So, there is lots of potential to accommodate those additional patients since they aren't a huge number to begin with in terms of the new visits, using the supply of doctors we have now in most places," Glied says.
Her point is well taken.
Accounting for the disorganization of healthcare access damages the claim that the PPACA will create the mother of all physician wait times, because such a claim relies upon the laughable assumption that our healthcare delivery system is operating at peak or near-peak efficiency with little room for improvement.
"What we see across the country is that practice patterns are so different that there has just got to be space for adaptation," Glied says. "There are places in the country where doctors are managing many more patients and the waits for appointments are quite short. Maybe some places are going to have to think about how to organize practices more effectively."
Exhibit A is Massachusetts, a state with 132 primary care physicians per 100,000 people – the highest such ratio in the nation. Massachusetts also had the longest physician wait times in the nation before Gov. Mitt Romney in 2006 pushed through universal healthcare. After RomneyCare took effect, Massachusetts still had the longest physician wait times in the nation.
"What happened after insurance expanded in Massachusetts? The data suggests nothing," Glied says.
"The change in utilizations and waiting times, there was a blip one year and then it went down. It's been steady before and after, but for not very good reasons that have more to do with the way medical practices are organized in Massachusetts, because there are loads of doctors in Massachusetts." (A separate study conducted by Harvard researchers in 2013 for Health Affairs came to a similar conclusion.)
Claiming that expanding the insurance rolls will increase patient wait times also fails to take into account the ability within the nearly $3 trillion healthcare sector to adapt and adjust. With so much money at stake, providers will find a way to improve access. If they can't, nontraditional entrants into the market will.
"We are already seeing changes in the way healthcare is delivered," Glied says, "There is more use of non-physician professionals such as nurse practitioners and physician assistants to supplement physicians. There is more use of retail medicine options, more email and other encounters for accessing the medical system. We are seeing change over time. So, we shouldn't imagine that medicine is any less prone to organizational and systemic change than many of the other things that we have seen change around us."
Instead of fixating on inevitably longer wait times, Glied says providers need to re-examine how they do business.
"It is not right for us to say that we are being overwhelmed by patients. That is not what the data show," she says. "What the data show is this is in the hands of the medical profession to make access to care work from a patient's perspective. There are opportunities to do better."
The deal is expected to clear regulatory hurdles, but one observer says "a possible snare going forward is that insurers start to look at Ascension as less of a provider partner and more of an insurer competitor."
Together Health Network is a clinically integrated network that was formed in July 2014 as a collaboration of Ascension Health Michigan, Trinity Health, and physician groups across the state.
USHL, based in Sterling Heights, MI, operates in 20 states and specializes in providing insurance products for small employers. The company is authorized to sell plans under the Patient Protection and Affordable Care Act.
Requests for comment on the deal from St. Louis, MO-based Ascension were not immediately returned.
Allan Baumgarten, a healthcare analyst working in Michigan and throughout the Midwest, says the acquisition is not a surprise.
"There were reports last year that Ascension would acquire an insurer, but the focus then was on large players like WellCare and Centene," Baumgarten said by email.
"US Health and Life is a very small player—$67.6 million in 2013 revenues, 18,600 insured enrollees in 2014. The $50 million cash purchase price seems high, but maybe this is an acquisition where the value of the insurer is in its license in MI, WI, OH, IL and some other states where Ascension has major hospital holdings and is looking to offer its providers to self-funded employer groups or maybe get into commercial business."
Baumgarten says Ascension's joint network with Trinity Health in Michigan has an ACO-like arrangement with Blue Care Network in Michigan for its Michigan Medicare Advantage plans.
While the deal likely will clear regulatory hurdles, Baumgarten says "a possible snare going forward is that insurers start to look at Ascension as less of a provider partner and more of an insurer competitor."
CHC to Operate Jellico (TN) Community Hospital
Jellico Community Hospital, a 54-bed acute-care hospital in Jellico, TN, and its CarePlus Center, in Williamsburg, KY, on May 1 will enter into a new management relationship with Community Hospital Corporation, according to a joint media release.
Financial terms were not disclosed.
"We share JCH's compassion and mission 'to provide more than quality healthcare'," Mike Williams, CHC president/CEO said in prepared remarks. "Throughout our due diligence process, we've been very impressed with the quality of JCH physicians and employees and their commitment to providing excellent healthcare to this community."
With the JCH deal, CHC owns, manages, and consults with 21 community hospitals nationwide.
On May 1, 2014, Adventist Health System gave JCH one year's notice that it would end its lease with the City of Jellico. The JCH board examined several potential partners for strategic affiliation but last autumn voted unanimously to hold discussions only with CHC.
"We have been proud to serve the community of Jellico for 40 years, but the financial pressures and hardship of managing a small community hospital without the partnership and resources of a larger system within the region are no longer sustainable," Jimm Bunch, chairman of the JCH board said in prepared remarks. We are pleased that CHC will embrace and further our mission in this community."
CHC has also entered into a clinical affiliation agreement with Baptist Health, headquartered in Louisville, KY. CHC and Baptist Health already collaborate for long-term acute care through ContinueCARE Hospital at Baptist Health Corbin (KY), 30 miles north of Jellico.
"Increasingly, we are looking for relationships that can demonstrate the value and benefits of the Baptist Health network working in collaboration with local healthcare providers to deliver quality care close to home to better serve their communities," Baptist Health CEO Stephen Hanson said in the media release.
HealthLeaders Media Council members discuss implications for physician compensation in a value-based purchasing environment.
This article first appeared in the March 2015 issue of HealthLeaders magazine.
Scott D. Hayworth, MD
President and CEO
Mount Kisco (NY) Medical Group
We will have to do a major change in the next two or three years. We are waiting for the carriers to move toward value in our region. At that point we will have to redo our compensation system. For primary care, without a doubt, there will be some money for panel size, some money for seeing the patients or RVUs, some part for quality, value, some part for customer service, and then we reward citizenship as an organization. For the specialists, that is tougher. There will definitely be an RVU component and a value or cost component, citizenship, and customer service. The proportion of all of that will be determined as we get closer and we have a better view of what the world looks like.
We are a physician-owned multi-specialty group of 450 doctors. We prefer not to put people on straight salary. There has to be a substantial component for the right behavior. If it is only a small component, you will not get the behavior you want. Whatever you design with a compensation system, half the people are winners and half are losers. Because of that you have to have multiple meetings, lots of communication, and give people time to absorb it.
Thomas G. Lundquist, MD
Senior Vice President and Chief Medical Officer
Optima Health (Division of Sentara Healthcare)
Virginia Beach, VA
Physician compensation expectations aren't a problem, per se. Rather, physicians in large want to protect how they get paid based on what they know today. So we, as a health system–owned health plan, have to establish trust with providers as we think about paying them. It's not just the health plans supplying cost data and utilization data, but it's sharing that and having the physicians build disease registries and work within their electronic health records and share back with us so that we are having a bidirectional conversation and we are validating each other's data and making each other better.
A big thing we are focusing on is increasing the power of our analytics so we can move the ability to model these new global budgets or capitated population payments so that physicians can see them alongside a fee-for-service model they work under and then eventually pay them the better of the two models and eventually flip it over to the
full population.
As a payer we have to build the trust, show them the data, and then build a transparent payment model where they can see how they are going to win under it. Most important, we as a payer must help them win under these new payment mechanisms—not repeat the 1990s, but rather change the game going forward.
Lewis Marshall, MD
President, Medical Executive Committee
Brookdale Hospital Medical Center
Brooklyn, NY
On building the compensation criteria: The incentive payment will be based upon productivity (relative value units), citizenship, compliance with core measures, and Physician Quality Reporting System measures. The provider who is at 90% on the quality measures will get all of their incentive calculation and based upon RVU times citizenship as some percentage. As the quality measure compliance goes down, you get less and less incentives.
On the balance of volume and value: Value has to be part of the equation. We've been such a volume-driven hospital, both inpatient and outpatient, so it is going to take a little bit of work to get rid of it. We can't just cut it off tomorrow and say, “On January 1 we are no longer going to calculate on volume.” We will come up with some sort of volume calculation because we don't want to see volume drop.
On tailoring compensation: We are looking at tailoring the quality measures to the provider specialty. One issue we identified with volume-based incentives is that pediatricians can see a lot of low-acuity patients and can get a higher incentive if you're just doing a volume-based incentive as opposed to the internist who is spending more time with the more complex patients and having fewer visits. Using the quality measures, the citizenship, and the work RVUs we think will even the playing field so we are not having to make adjustments for particular specialties.
John E. Keelan
CEO
Brodstone Memorial Hospital
Superior, NE
As we grow into this value-based purchasing, with none of us all the way into it yet, we are already ahead of the game because of the way we are arranged now. In 2002 we bought the physician clinic in our little town. We thought at that time that the best way to bring the most comprehensive care to the people we serve at the most reasonable cost was by coming together, and them being able to recruit additional providers as the need arose to have them on hand.
We are still fee-for-service, but it goes into one pot. They get paid for it and we take ours. As we get into value-based purchasing, it will blend in easily for us. It's evolving, but we aren't there yet. I am still looking to see how it's all going to fall into place.
We focus on providing quality care and doing the best we can for our people. But it's going to be hard because the more you force people into value-based care, the more rural hospitals are going to close because they don't have the facilities or the providers to even do what we do now. So you are going to drive providers out of small areas, and I just don't see it working.
The fracas between advocates for rural hospitals and the drug industry over orphan drug pricing affects a small number of rural and freestanding cancer hospitals. It centers on whether Congress intended to exclude safety nets from discounted pricing.
Advocates for rural and safety net hospitals have stepped into the latest fray over the 340B drug pricing program.
Safety Net Hospitals for Pharmaceutical Access, America's Essential Hospitals, and the National Rural Health Association, have filed a joint amicus brief with the U.S. District Court in Washington, D.C., asking the court to toss a lawsuit brought forward by the drug industry that would block some rural hospitals and cancer hospitals from discounted prices on "orphan drugs" that are used to treat common conditions beyond their orphan designation.
Pharmaceutical Research and Manufacturers of America brought the suit against the Department of Health and Human Services, claiming that HHS incorrectly interpreted "the clear direction of Congress."
"At issue is the Health Resources and Services Administration's interpretation of the 340B orphan drug exemption, enacted as part of the Affordable Care Act," PhRMA General Counsel, Mit Spears said when the suit was filed.
"The ACA significantly expanded the type of entities that can access 340B discounts for prescription drugs," Speaks said. "To preserve incentives to invest in research and development of new treatments for rare diseases, the ACA expressly exempts manufacturers from having to provide these discounts on orphan drugs to newly eligible providers."
HHS has asked the court to dismiss the suit. PhRMA's response to the call for dismissal is due by the end of this month.
The rural and safety net advocates have challenged PhRMA's argument and claim that HRSA's guidance "must be upheld because the plain language of the statute limits the orphan drug exclusion only to orphan uses and does not sweep in the many non-orphan uses for which medications may be administered."
The case isn't getting much attention beyond the immediate players, in part because the legislation affects a small number of rural and freestanding cancer hospitals that were added to the 340B program in 2010.
For those hospitals, however, the stakes are high. Advocates say the court's ruling could determine if many of those hospitals remain open. They cite a recent survey that found that 63% of the affected hospitals reported using Herceptin at least half the time to treat the non-orphan conditions of breast and stomach cancer.
There is a history here. In 2013 the district court sided with PhRMA and vacated HRSA's legislative regulation of 340B after the court determined that Congress didn't grant that explicit authority. Undeterred, HRSA in July 2014 issued the same ruling but labeled it "interpretive" rather than legislative.
PhRMA cried foul and went back to the court.
"While we value the hard work and efforts of all agencies, it is important [that] federal agencies recognize and work within the bounds set by Congress," Spears said.
Safety net and rural advocates argue in their amicus brief that HHS is acting properly by issuing an "'interpretive rule' that is required by the statutory language that it interprets and, even if it were not compelled by the language of the statute, is a persuasive interpretation of that statute."
"HHS's interpretation promotes the two central goals embodied in this statutory scheme—lowering costs for hospitals while incentivizing the production of drugs to treat rare diseases or conditions," the amicus states.
"PhRMA would have this Court eliminate much of the program's benefit to these hospitals, turning a program intended to lower drug costs for hospitals into one that freezes the high cost of many of the most expensive, commonly used medications."
SNHPA Chief Counsel Maureen Testoni believes the federal government will prevail when the district court issues its ruling, which should occur sometime in the first half of this year.
"HHS is saying you don't get 340B if you are using an orphan drug for orphan purposes and the only reason Congress put that in there was to ensure that there isn't any hit on the orphan drug industry," she says. "You still protect when it is used for an orphan purpose, but not for a non-orphan purpose. It is completely consistent to read it the way HRSA has interpreted it."
From the perspective of this unaccredited bus bench attorney, HHS and the advocates have a strong argument with respect to the validity of the interpretive rule. If we are to agree with PhRMA, then we would have to ask what Congress intended if it specifically excluded this tiny subset of rural and cancer hospitals from the narrowly drawn parameters of the 340B program.
The answer, in my opinion, is that Congress did not intent to exclude them.
A projected 7% shortfall of primary care physicians by 2025 and a 19% shortfall of specialists is the result of a "misallocation" of places where graduate medical residency slots should be, says a Florida hospital CEO and executive at the Teaching Hospital Council of Florida.
Florida teaching and safety net hospitals are warning of a looming shortage of 7,000 physicians in the coming decade unless more medical residency programs are created, a new report shows.
While there is a general sense that Florida, and just about every other state, faces a physician shortage, the study commissioned by the Teaching Hospital Council of Florida and the Safety Net Hospital Alliance of Florida details a gloomy forecast for the Sunshine State.
The projections in the report conducted by IHS Global include a 7% shortfall of primary care physicians by 2025 under the current scenario. The estimate jumps to a 19% shortfall of physician specialists in 19 specialties, with the largest areas of need in psychiatry, general surgery, rheumatology, and thoracic surgery.
"In Florida, the shortage is caused by a combination of things," says Jim Burkhart, president and CEO of Tampa General Hospital, and vice-chair of the Teaching Hospital Council of Florida.
"We just passed New York as the third most-populous state. The number I heard today was that Florida is growing at the rate of 800 new residents per day. But we are 42nd in the number of residency slots we have per capita. That is a formula for disaster."
"The population is aging for all of us," says Burkhart, "so we are going to need more physicians in general. That means the physicians are aging, so many of them are going to age out and leave, so we have to replace them. So, add all that up and you can see why there is an exponential effect on the shortage of physicians in the State of Florida."
The Teaching Hospital/Safety Net Hospital study estimates that Florida would need to create and fill 13,568 residency positions to fully resolve the physician shortage by 2025. That would be about 1,360 new residency slots a year for the next decade.
The study also shows that Florida will face a 19% shortfall of physician specialists needed in 2025, compared with an overall 7% shortage of physicians. Shortfalls will exist to varying degrees across all regions, with the Panhandle and Southwest Florida having the most severe shortages of doctors in endocrinology, rheumatology, hematology, and other non-primary care areas.
The state's physician shortage has the attention of Gov. Rick Scott (R), a former healthcare executive, who proposed $80 million in 2013 to fund new Medicaid residency programs. In his latest budget, the governor has proposed increasing the funding by another $7.5 million.
"At some point in time, the federal government is going to need to address the misallocation that occurs with the existing formulas that are in place for where there graduate medical residency slots should be," he says.
"These residencies are disproportionately in the Northeast. People are leaving the Northeast. We just passed New York as the third most-populous state. New York gets $2 billion for graduate medical education. We get $200-and-something-million for graduate medical education. It's a problem and that misallocation needs to be addressed."
While much of the rhetoric around the physician shortage on the national stage has concentrated on the need for more primary care physicians to coordinate population health, Burkhart says policymakers should not ignore the need for specialists.
"It's not either/or. We are proposing that we do both," he says. "The primary care shortage is a little easier to address simply because you can train primary care physicians in a much broader number of facilities than specialists. You have to have highly specialized places to train thoracic surgeons or rheumatologists."
In addition, Burkhart says, the effect of the primary care shortage is more-easily mitigated with the use of physician assistants and nurse practitioners, and the growing popularity of retail-based urgent care and primary care medical services.
Tim Dall, a managing director at HIS and the author of the study, says the scope of practice of primary care physicians has to be weighed against the needs of the population.
"At the end of the day, if the patient has cancer or some other chronic condition, there is only so much a primary care physician can do," he says. "A primary care physician can help manage a disease, but you need a specialist to be involved. When the patient needs surgery there has to be a surgeon."
A recent federal appellate court ruling demonstrates the tension within the healthcare sector that arises when the need to consolidate runs up against the Clayton Act and enforcers at the FTC, says one legal observer.
Consolidation has been a mantra and a movement in the healthcare sector for years, but that doesn't mean the federal government won't step in to block monopolies formed with the intent of improving care delivery.
That was demonstrated this month when the 9th U.S. Court of Appeals upheld an Idaho federal district court ruling that negated the 2012 acquisition of Nampa, ID-based Saltzer Medical Group by St. Luke's Health Systems, Ltd.
A federal district judge in Boise had sided with the Federal Trade Commission, the State of Idaho, and two rival hospitals that had complained that St. Luke's $9 million acquisition of Saltzer, Idaho's largest independent multi-specialty physician group, was a violation of the Clayton Act on monopolies.
The federal courts ruled against St. Luke's and Saltzer even as judges at the district and appeals court level acknowledged the validity of their stated need to consolidate.
"The district court expressly noted the troubled state of the U.S. healthcare system, found that St. Luke's and Saltzer genuinely intended to move toward a better healthcare system, and expressed its belief that the merger would "improve patient outcomes" if left intact," the 9th Circuit Court wrote in its affirmation.
"Nonetheless, the court found that the 'huge market share' of the post-merger entity 'creates a substantial risk of anticompetitive price increases' in the Nampa adult PCP market. Rejecting an argument by St. Luke's that anticipated post-merger efficiencies excused the potential anticompetitive price effects, the district court ordered divestiture."
Jay L. Levine, an antitrust litigator and partner with Porter Wright Morris & Arthur LLP, says St. Luke's case demonstrates the tension within the healthcare sector that arises when the need to consolidate, tacitly encouraged by the Patient Protection and Affordable Care Act, runs up against the Clayton Act and enforcers at the FTC.
"It further marks that the FTC is going to look at these things critically and you can't just wave the ACA flag and say 'this is why we are doing it. We are OK,'" Levine says. "By now, we are pretty confident that just saying 'we need to get bigger to become more cost-effective' is not going to impress the FTC."
Levine says the FTC and the co-plaintiffs had an advantage with their argument because "the anticompetitive effects are somewhat intuitive." No matter how sincere the efforts of St. Luke's and Saltzer, he says, they would have a more difficult time convincing a judge that the acquisition would prove cost-effective for consumers in the service area.
"It is difficult to figure out how to measure quality in healthcare. Measuring a unit of healthcare is not quite the same as in other industries where there is more objective criteria," Levine says. "They are developing those criteria, and it may well be in the coming days that someone can demonstrate a prospective proof that the merger will in fact bring enough cost-effectiveness and integration that it will ultimately lower pricing, notwithstanding the additional market power the merger gives."
There is No Conflict
Michael L. Sibarium, a Washington, DC-based litigator and partner with Pillsbury, says that many people in the healthcare sector mistakenly believe they're caught between a push for consolidation encouraged under the ACA and established antitrust laws.
"If you spoke with people in the antitrust community, they would say overwhelmingly that there is not a conflict and that these two things can live in harmony with each other," Sibarium says. "For different reasons at different times over the years there have been pushes for consolidation in healthcare. Long before the ACA, people were saying antitrust was standing in the way of consolidating."
"There is no reason why you cannot have pro-competitive consolidations to achieve efficiencies on a scale with clinical cooperation, electronic medical records, better quality and service and still avoid anticompetitive price increases."
Sibarium says the St. Luke's ruling shows that the FTC isn't "going to just roll over and say the ACA statute trumps the antitrust laws." It means that healthcare providers will have to do their homework to understand the potential anticompetitive effects of a merger or acquisition.
"Look at the St. Luke's case and you can see how the court defined the geographic market being this city of Nampa and how many physicians St. Luke's and Salters had when combined and how many were left at the other hospitals," Sibarium says. "Do the math and you can quickly see that how they define the market they end up with an enormous market share and probably an antitrust problem."
The homework can get a little more complicated at times because "there is no bright line test" to determine a monopoly, Sibarium says.
"There are different antitrust laws with different thresholds," he says. "When you are suing somebody for monopolization, using what they call exclusionary conduct to keep a monopoly you have or to obtain a monopoly, you have different thresholds. Share numbers is one piece of it, but other factors are relevant."
"For example," he says, "what are the entry barriers in a given industry? If you have higher entry barriers then a lower number will satisfy the monopoly test. If you have low entry barriers you are going to need a higher number, or maybe no number."
"Building a new hospital is a high entry barrier, but bringing in a new physician practice, maybe not," Sibarium says. "Unless the nature of the physician practice is that you have to have admitting privileges in a particular town and the hospital won't grant them, then you have an entry barrier. It becomes more fact-specific than just saying 50% or more doesn't help that much."
Levine says healthcare executives contemplating a merger or acquisition should examine how the deal will affect their relationship with payers, because that's the first thing the FTC will look at.
"The FTC is going to say that managed care companies need systems that play off of each other to get the best prices for the consumer," Levine says. "At the end of the day, whether it is a physician practice merger, a hospital merger, an acquisition of a physician practice by a hospital, the question is 'what are the alternatives?' "
"If you are the biggest health system and the biggest by far independent physician practice and they are hooked up, it becomes difficult to figure out what the alternatives are for consumers. If your options are telling people 'Go to the next city that is 200 miles away' that is probably not going to be too effective an argument."
The Government Accountability Office says the Centers for Medicare & Medicaid Services is prepared for the ICD-10 implementation deadline Oct. 1, but an MGMA executive says he does not agree with the GAO audit's findings.
A new federal audit that provides an upbeat assessment of progress towards ICD-10 implementation on Oct. 1 is downplaying some unresolved issues, the Medical Group Management Association says.
In a report requested by the Senate Finance Committee, the Government Accountability Office says the Centers for Medicare & Medicaid Services "has taken multiple steps to help prepare covered entities for the transition, including developing educational materials and conducting outreach, and the majority of the stakeholders we contacted reported that both of those activities have been helpful to preparing covered entities for the ICD-10 transition."
Robert Tennant, director of HIT Policy for MGMA, says he does not agree with the audit's findings.
"They've done a pretty good job explaining the various outreach programs that CMS has instituted to help stakeholders with ICD-10. But I don't quite share the same level of optimism in terms of the readiness," Tennant says. "I don't think they have taken enough steps to make that transition go as smoothly as their proponents think it will."
"For example, only two state Medicaid agencies have completed internal and external testing, as of November, 2014. That's almost two months after the original compliance date. Another 23 states are still updating their policies and systems which needs to occur before test can begin."
"Some people might say 'why worry about Medicaid?' Obviously, [state Medicaid agencies] are not only important, but they are growing in importance in a number of states because of the exchanges and the fact that so many more Americans are now covered under Medicaid because of the expansion. That means more claims. The fact that only two [state Medicaid agencies] have done complete testing is a little bit disconcerting."
Vendors and End-to-End Testing
Tennant says it's also troubling that the federal government does not consider software vendors "covered entities" in the transition to ICD-10. "They are not required by law to upgrade systems, including practice management system software and electronic health record software, but that is absolutely critical if practices are to be successful in their transition," Tennant says.
"We know the problems the industry has faced with software for Meaningful Use Stage 2. Well, it's the same vendors! If they can't achieve success with Stage 2 what does that say about the readiness to move ahead with ICD-10?"
Tennant says questions linger about the scope of the all-important end-to-end testing for ICD-10 readiness in March.
"They are only going to test with 2,550 submitters," he says. "That is not 2,550 physician practices. That is everybody who can submit claims to Medicare; primarily clearing houses, billing services, durable medical equipment suppliers, in-patient care settings, long-term care settings."
"The number of practices and physicians who are going to be able to test with Medicare are just a handful. Will that be sufficient? I highly doubt it."
Another concern is the turn-around time for the testing results.
"Once the testing is completed the information from the testing has to be routed back to the community so they can better understand what the impact of ICD-10 is going to be," Tennant says. "If it takes them two or three months to get the results out, the last round, the most important round, is July. They will not have the results out to the industry until right around the compliance date. That's only a minimal assistance to the industry."
While ICD-10 implementation skeptics were able to delay the deadline for a year, pressure has begun to build from other powerful lobbies in the healthcare sector that want no more delays, including the American Hospital Association.
CMS has estimated that a one-year delay would increase the costs for some providers and payers by as much as $6 billion. Medicare and Medicaid have incurred millions of dollars in costs because of the delay, according to the GAO report.
A 'Significant Percentage… Not Ready to Transition'
Now Congress is taking a closer look at the state of preparedness for the twice-delayed implementation date for ICD-10. Unless Congress takes some as yet unforeseen action, the switch flips on Oct. 1.
Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) said in a joint news release that the GAO audit gives them confidence that CMS is preparing adequately.
"As demonstrated by this report, the provider outreach and responsiveness to stakeholder concerns from CMS have kept the agency on track to upgrade to the next level of healthcare coding," Hatch said.
"While additional testing will be needed to ensure its success, the transition to the new system will streamline the management of healthcare records and improve patient care. I will continue to keep a close eye on this issue but see no reason for any delay past the October deadline."
On Wednesday morning, the House Subcommittee on Health is scheduled to examine the status of ICD-10 implementation.
Tennant says MGMA does not anticipate another implementation delay, and is concentrating on making sure the rollout is as smooth as possible.
"We are looking for real leadership on the part of the government to recognize, not at the last minute, not in late September, but [to recognize] a little earlier in the process, after the end-to-end testing is completed, to say there is going to be a significant percentage of the industry who are not ready to transition."
A deal between Emory Healthcare and WellStar Health System would dominate the north Georgia market. In New York, North Shore-LIJ Health System is exploring a partnership with Maimonides Medical Center that would expand its coverage area to include Brooklyn.
Emory Healthcare and WellStar Health System are negotiating to create a unified health system with 11 hospitals serving Atlanta and its suburbs.
The boards of directors at Emory University and WellStar voted to extend discussions for another 45 days "in preparation for committing to a multistep design process for the new health system that would take about a year to complete," the two systems said in a joint media release.
The "strategic intent" for the two not-for-profit health systems is to pool the resources of Emory Healthcare and WellStar "to create a new, innovative healthcare environment with the best of community-based care and the best of academic medicine."
If an agreement is reached over the next 45 days, the two sides said it likely will take another year to complete the merger.
It's not immediately clear who would lead the new health system, or if any money would change hands, and an Emory spokesperson said senior leaders weren't saying anything beyond what was in the press release.
"This is a tremendous opportunity to create an unparalleled new healthcare system," Emory University Board of Trustees Chair John Morgan said in prepared remarks.
"Combining the significant resources, talent, and expertise of Emory Healthcare and WellStar Health System would bring together two highly respected institutions that together are well known for their commitment to patient care, education, discovery, and innovation."
Emory Healthcare includes six hospitals, 200 provider locations and 1,800 physicians in more than 70 specialties, including 220 primary care physicians, and more than 16,000 employees system-wide.
WellStar is the largest not-for-profit health system in Georgia and with five hospitals and 28 facilities, including urgent care centers, imaging, and physician offices, serving 1.4 million people in the five-county Metro Atlanta area.
"Our shared vision is to design one of the best health systems in the nation to serve local communities, the state of Georgia, and beyond," WellStar CEO Reynold J. Jennings said in the joint statement. "The new system will be one of the most innovative and transformational healthcare systems in the industry."
Emory University President James W. Wagner said WellStar's competencies in community-based care would mesh well with Emory Healthcare's role as an academic medical center.
"During discussions among trustees and executives at both Emory and WellStar, it quickly became evident that we share a vision, commitment, and enthusiasm to create a new organization that strengthens and advances our mission of exceptional patient care, health sciences and medical education, and research," Wagner said in prepared remarks.
Maimonides MC, North Shore-LIJ Explore Partnership
"This preliminary announcement is the result of a focused, 12-month strategic planning process by the Maimonides Board of Trustees and our executive team to identify a regional partner whose vision and commitment to excellence are aligned with ours," Pamela S. Brier, president/CEO of Maimonides Medical Center said in prepared remarks. "We look forward to our continuing discussions with North Shore-LIJ and both agree that benefit to the communities we serve will be our highest priority."
Maimonides Medical Center is a 711-bed tertiary care teaching hospital that includes cardiovascular program, the borough's largest outpatient cancer and breast centers, stroke center, and orthopedics. Maimonides operates Brooklyn's only accredited children's hospital, a regional perinatal center serving high-risk pregnant women and neonates, and the state's largest obstetrics program, delivering more than 8,700 babies each year.
Michael J. Dowling, president and CEO of North Shore-LIJ, says the health system has been exploring opportunities in Brooklyn for several years, as it expands beyond its traditional service areas on Long Island, Queens, Staten Island, and Manhattan.
"We believe Maimonides would be an ideal partner, considering the medical center is already the pre-eminent provider of health care in Brooklyn," Dowling said. "Working together, we are confident we can build on Maimonides' outstanding reputation for delivering high-quality care to the incredibly diverse communities of Brooklyn."
When the deal is finalized, Maimonides will continue to operate as a full-service, tertiary hospital and be the hub of a growing network of services that the health system will establish in Brooklyn.
North Shore-LIJ includes 19 hospitals and more than 400 outpatient physician practices throughout the region. North Shore-LIJ's owned hospitals and long-term care facilities house more than 6,400 beds, employ nearly 11,000 nurses and have affiliations with about 10,000 physicians. With a workforce of about 54,000, North Shore-LIJ is the largest private employer in New York State.
