Monthly Archives: March 2015

The Future of Healthcare

By Dr. Charles McCormick III

Assuming you haven’t been asleep at the wheel of life, you may have noticed lots of recent changes in the way health care is delivered in America.

Obviously this is a concern to many families. Today I’d like to give you a “peek behind the curtain” at the regulatory and administrative challenges from the perspective of a practicing physician.

Consolidation of physician practices into larger groups has been a major theme for the last 25 years. “Larger than ever” is the common tactic for survival. By grouping together, doctors can share expenses for administration and medical equipment, such as diagnostic machines that can cost $40,000 to $65,0000 each.

Here at the Indiana Eye Clinic, we strive to be a practice on the leading edge of technology, offering high-end eye care such as corneal mapping, laser-assisted cataract surgery and in vivo optical analysis. We are able to offer these treatments to our patients because we have built up a substantial practice over nearly 30 years.

Now imagine you are a young ophthalmic physician entering the workforce, usually with a mountain of student loan debt and little access to capital. Each of these pieces of high-cost gear represents a barrier to being able to perform quality work.

Group practices share an economy of scale with pooled computer systems, human resource manpower, rent and other expenses. As a result, smaller patient  populations are underserved partly due to the poor capacity of smaller offices to amortize these costs.

Recently hospitals have been hiring physicians to serve in accountable care organizations (ACO). Having this third-party intrusion can further diminish a doctor’s capacity to ensure quality of care. The early data reports on rolling the doctor-patient relationship into a hospital ACO are not convincing.

Moreover, ACO physician satisfaction and compensation declines endanger sustainable working arrangements. Multi-specialty groups are likely to embrace similar strategies in hiring doctors, and unless they stay focused in promoting physician efforts for quality care, they will face similar challenges.

In this further build-out of health care groups, patients risk losing the personal attention they feel they deserve from the doctor entrusted with their care.

Many observers argue that healthcare is the most overregulated industry in the country. Medicare, Medicaid and the private insurance industry act as conduits for payment to hospitals, physicians, patients and pharmacists. Each channel is impacted by thousands of regulations, often with inadequate oversight, and subject to reimbursement fraud. The system is too complicated!

The Centers for Medicare and Medicaid Services (CMS) have sought to replace the International Classification of Diseases, ICD-9, with a new expanded ICD-10 that would increase the classification of all types of medicine from 28,000 codes to 260,000 codes. This is likely to further escalate unnecessary administrative expenses, but not enhance patient care.

CMS has already instituted physician quality reporting mandates that require electronic medical records, additional personnel and more technology. These added expenses are to be paid by physicians despite reduced reimbursements. So far in 2015, only 27% of practicing physicians have complied with the requested changes.

For Medicare, CMS has advised physician fee cuts of 2% to 20% this year – a nightmare that Congress may cancel with pending legislation known as the “doc fix.”

Further reductions in reimbursement will further constrain doctors’ capacity to comply or willingness to play along with onerous regulation. A significant number of Baby Boom physicians are choosing to retire instead of complying. In the eye care segment, we now have 11% fewer doctors serving a population that has grown by 11%!

The Affordable Care Act, commonly referred to as Obamacare, is a centrally administered plan that is neither affordable nor effective in addressing patient care needs, in my opinion. With ACA costs so absurdly out of order, many unintended consequences are in the offing. We may see more physician practices opting for a strict fee-for-service model, bypassing all third-party reimbursements like Medicare and private health insurance.

Finally, there is the issue of medical malpractice. Indiana has experienced less volatility in litigation than other states, due to a cap on emotional pain and suffering payments plus a physician panel review system established in 1975. Nonetheless, doctors are conditioned to regard a malpractice lawsuit as a “when,” not an “if.”

States with high rates for med-mal insurance essentially limit the service or deny access to it. Front-page jury awards, lifelong calculated disability and emotional pain risk are factored into insuring physician behavior.

Doctors and associated practitioners have much to be proud of in modern medical practices. However, the recent wave upon wave of regulations impacting the industry reflects our government’s attempt to address problems from Washington D.C. It will leave unintended potholes through which we all must navigate.