The Golden Ticket to Healthcare’s Future – Physicians

By: Hank Duffy, President JHD Healthcare Partners

November 8, 2016, had a surprising presidential election outcome that many people, including myself, didn’t see coming. For us in healthcare, it’s very likely there is a wave of changes coming our way.

Yogi Berra said, “Making predictions, particularly about the future, can be very difficult.” So we don’t know what will come in the next few years under the Trump administration, but my sense is the endangered aspects of Obamacare are:

  • The “Individual Mandate”
  • The role of the Exchanges
  • The approach to Medicaid
  • Possibly, the role of CMMI

However, one aspect about our industry I am convinced will not change is The Prime Directive to reduce the cost of healthcare. Whether we have Value-Based Reimbursement, Bundled Payments, Fee-For-Service or Capitation, the pressure to bring down the cost of care is going to continue. This means reducing the Total Medical Expense Ratio – the cost of the clinical care process – not freezing salaries, cutting nurses or Medical Assistants, or closing floors.

There is a golden ticket to succeed at reducing the clinical cost of care – it’s the physicians.

Today, enough focus isn’t on positioning the physicians as the leaders in driving quality up and clinical cost down. They need to be:

  • Better equipped
  • Better supported
  • Incented to focus on larger patient populations
  • Recognized as the “healers” of successfully reforming healthcare

In the midst of the potential chaos, how do we, as an industry, get the golden ticket?

  • Integrating Technology: The technology is here, but we are not putting enough effort into “optimizing” its use for the physicians and their care teams. As was the case with the introduction of the EHRs, we made the day-to-day work of the physician more difficult. Having the technology is great, making it work to the needs of the specific physicians is essential.
  • Fix Clinical Support Staffing: As an industry, we are not adequately preparing for the coming physician shortage, and we can do more to better leverage the clinical support staff mix. At some point in the future, a Primary Care Panel will be 6,000 – 7,000 lives, which is unmanageable with the current staffing model.
  • Make Clinical Data Usable: A lot of progress has been made in the availability and use of clinical metrics, particularly through CMS programs and the successful ACOs. As physicians take on changing care patterns/pathways and creating true integrated care management, the data needs to be:
    • More credible
    • Easier for them to use
    • Embraced by them
  • Strengthen Financial Incentives: If the physicians are the engine in driving down clinical cost, they need to have the same incentives as the industry. Physician arrangements should be crafted to reward:
    • Productivity
    • Clinical quality
    • Clinical cost
    • Patient satisfaction
    • Citizenship in the clinical enterprise.
  • Facilities: Our ambulatory facilities need to be more user-friendly and designed to support integrated care. It’s a long-term investment, but we will not reduce the cost of care without moving away from antiquated small physician offices.

Physician satisfaction has been decreasing for the past 15 years or more, and we need to start here to succeed with any healthcare change. So while we wait to see what “Trumpcare” brings, it is in everyone’s interest to find a way to:

  • Make the physician work environment easier
  • Align incentives faster
  • Embed the clinical quality and cost data into the care process
  • Accelerate the movement toward clinical integration as a means to bring down clinical cost

Medicare announces a new program to pay primary care practices for managing their own patients

On April 11, 2016 CMS announced Comprehensive Primary Care Plus (CPC+), a significant advancement of an earlier program known as CPC that was launched in 2012.

The new initiative is open to primary care practices that do not participate in other types of comprehensive care programs such as ACOs, including MSSPs.

A unique feature of CPC+ is that CMS wants to include other types of health insurance plans, in addition to Medicare, to participate so that the majority of a practice’s patients are covered.  This will reduce the complexity for participating practices and will create enough of a critical mass to make participation viable.

The CPC+ design is intended to provide partial up-front funding, added to FFS payments, and backward looking quality performance rewards to practices who actively manage the health of a panel of patients.  Many details have yet to be explained, but the Medicare component will contain two Tracks.  Track 1 is intended for practices who want to develop comprehensive care capabilities.  It is less demanding than Track 2, but also comes with lower $PMPM and performance rewards.  The prospective $PMPM will be risk stratified under both Tracks, with the methodology still to-be-determined.  As an example, under Track 1, a primary care practice with an average risk score will receive:

  • Full FFS reimbursement, billed as usual
  • Plus, a $15 PMPM, paid in advance
  • Plus, up to $2.50 PMPM based on quality performance

For a practice with 300 Medicare beneficiaries, the $PMPM payments could amount to $63,000 per year on top of any FFS dollars received.

Track 2 is designed for PCPs who are already advanced in their PHM efforts.  Compensation under Track 2 follows a similar structure, but the amounts have been increased to reflect the additional effort and resources needed.

Commercial and other health plans will need to develop their own parallel programs and coordinate with CMS so that practices can achieve economy of scale by including most, if not all, of their patients.

The next step for the CPC+ program is for CMS to receive applications for participation from insurance in order to define the participating regions.  The regions will be announced in June.  At that time practices who are in a participating region can submit their applications.   Participating practices will be announced in October.

Find out more at http://bit.ly/1sAdIfm.

 

 

 

Physician Revenue Cycle: A Key to Successful Integration

By Kelvin Drawdy, Director, JHD Healthcare Partners

As hospitals and health systems take steps to develop sustainable relationships with physicians, they are increasing physician practice acquisition and physician employment.  Effectively integrating the revenue cycle should be a top priority because it not only affects the financial performance of the health system, but may also affect the physicians’ compensation, and their satisfaction.

The Healthcare Financial Management Association defines revenue cycle as: “All administrative and clinical functions that contribute to the capture, management, and collection of patient revenue.” In other words, from the point of first patient contact to final payment and settlement of the claim. Each of the following functions must be performed for the revenue cycle to be effective – and must be prioritized as part of the integration of new physicians and practices.

  • Pre-Visit/Pre-Service Processes
  • Front-End Process at Time of Service
  • Encounter – Patient Services
  • Billing
  • Third Party Claims
  • Payment Processing
  • Patient Collections

There are challenges to successfully integrating the revenue cycle functions of the newly acquired practice into the health system and gaining the trust of the physician that the revenue cycle is working.   Efficiencies can be achieved working in a large health system, but if not executed well there is a risk of losing the physician’s trust and lowering the patient’s satisfaction.

If the physician revenue cycle isn’t meeting expectations, this could be an indicator the health system has issues integrating the physician revenue cycle or that it is not effectively prioritized or managed as part of the overall system.  Timely recognition and resolution of these issues will keep physicians and patients happy, and improve the health system’s financial results.

Let’s discuss how your health system is managing the challenges of your physician revenue cycle.

Kelvin Drawdy is a director with JHD Healthcare Partners.  For a complimentary assessment, please visit JHDHealthcarePartners.com.

Yes, PHM Can Get You Paid

Stethoscope and cash sm

Skip Leavitt, PA, MBA, FACMPE

The case for effective population health management couldn’t be clearer. But still there is great reticence on the side of providers and health systems, many of whom believe that adding PHM activities will threaten fee-for-service revenue. They want to be able to increase quality and lower costs for their patients, but there are some commonly held concerns that don’t have to be true:

  • Myth 1. If they are successful with their PHM, then their fee-for-service revenue will drop, and it will drop faster than value-based revenue increases.
  • Myth 2. The tech cost will be very high and they think they have to pay for the technology up-front.

Here is what organizations that have been successful at a transition to PHM have figured out: There are activities documenting a track record of increasing quality that are also reimbursable under the current fee-for-service system.

Let’s take, for example, Chronic Care Management (CCM), which Medicare has just put in place.

If a provider has a Medicare patient who meets CCM criteria, they can get paid $42 per month per person for care coordination, which can be done by non-physician staff, such as an office nurse.  For a typical internist, who has 500 Medicare patients, that’s $21,000/month for doing care coordination. And that’s just one example.

By appropriately documenting the care coordination done for those patients, providers can build their record.  Also, it’s been shown practices doing chronic care management experience a higher rate of Medicare patients coming in for annual medical evaluation — which increases the compliance with the wellness evaluation.

Many practices would like to do care coordination, but are overwhelmed by the day-to-day issues of running the practice. Becoming part of a clinically integrated network can provide the needed expertise and resources at minimal cost.

Another example to show how PHM can get you paid is closing care gaps. We know most patients don’t get the preventive care they need; typically, less than half of the patients get the recommended preventive care measures. Simply identifying those patients, bringing them into the office, and arranging for preventive care increases FFS volumes and also increases the documented improved quality of care.

PHM can be game-changing for your practice, if you’re willing to make a few changes. Don’t let the misconceptions about transitioning to value-based care hold your practice back.  Not only can you set your practice up for success in this new healthcare landscape — but also increase your revenue during the change-over.

Skip Leavitt, PA, MBA, FACMPE, has more than 25 years of healthcare management experience, including clinical and executive positions in both the provider and payor sectors. On the leadership team of JHD Healthcare Partners, Mr. Leavitt puts that expertise to work helping physicians, hospitals and health systems succeed.

Cowboys and Pit Crews: Change is Here

by John H. (Hank) Duffy, founder, JHD Healthcare Partners

shutterstock_240686083.jpg pit crewA few years ago, New Yorker magazine published a commencement address from Atul Gawande, a surgeon, writer, and public health researcher, who spoke to students at Harvard Medical School. Dr. Gawande made the very insightful remark that today’s medicine doesn’t need “cowboys,” the lone rangers who do everything themselves. Rather, in today’s medical environment, you want the patient to be surrounded by a “pit crew” — several medical professionals collaborating on how best to care for one person. Never before has the industry experienced such a dramatic shift in ideology, and culture change it requires.

The public’s experience is that while we have amazing technology and highly trained clinicians, there is little consistency with doctors and technology coming together to provide an actual system of care, from start to finish. We train, hire, and pay doctors to be cowboys. But it’s pit crews people need.

The solution to rallying the front lines around this new methodology is aligning incentives — creating frameworks for success where the physicians are incented to team, to look at clinical quality, to manage clinical costs, and to be patient-focused.

With the healthcare landscape shifting from a pay-for-service model to one based on accountable care and qualitative patient outcomes, the way physicians are incentivized and compensated needs to change in step with what the market is dictating. Physician compensation is a major issue in this transition. At one extreme, physicians are suspicious about changes in their income. At the other extreme are legal regulatory issues related to compensation.

The reality is that no matter how you configure it, any successful physician compensation plan needs to be built around 5 pillars:

  1. It (still) needs to be volume- or productivity-related. Within this are two components that must be artfully balanced: panel-sized — how many patients the physician is responsible for; and how many encounters (wRVUs) — how busy is the physician?
  2. It needs to require demonstrated clinical quality. This can be broken down into two parts. First, are the patients being given the right protocols (pap smears, vaccines for children, and best-practice processes for illnesses)? Secondly, are they staying out of the hospital and living longer?
  3. It should include clinical cost management. There is a saying that the most expensive item in healthcare today is a pen: the pen that writes multiple MRI screens, multiple pharmaceutical scripts, multiple X-rays, and more. It’s the physician’s ability to quell his or her use of the pen (or mouse) that will be the greatest impact on clinical cost. More often than not, it’s because the physicians are practicing what we call “defensive medicine”: prescribe the Z-pak, do the CT scan just to be “safe” – rather than focus on rational clinical need.
  4. It must focus on the patient experience. Enhancing the patient experience starts with opening up the schedules to get the patients cared for on a timely and convenient basis. The patient experience is knowing your patient when they come in the door, knowing what’s going on with them. It’s the antithesis of having all the patients re-do their paperwork every time they come in the door, rather than greeting them and asking if anything has changed.
  5. It has to include citizenship. It’s more than showing up at work. Citizenship is teaming with your colleagues, being a part of the group, helping to find solutions and sharing in both successes and opportunities for improvement. Being a part of the health system not only of your patients, but also your provider organization, is important in this new healthcare landscape.

There are several things that have to happen to get us from being cowboys to being well-oiled pit crews, starting with a significantly different communication process. This is not about management trying to hustle down the cost of the physician cohort; it’s about moving from fee-for-service to fee-for-value. Here’s what your communication plan needs:

  1. Education on all sides. All sides need to understand the other. You have to have an involved physician cohort in the development of your organization’s methodology; you can’t take two or three accountants and have them go in a room and develop the methodology. It’s a process that is going to take time, and you can’t do it in 3 weeks. We just completed one successfully and it took 10 months.
  2. Explain the positives. Show physicians the upside to this alignment,….how it will be good for the patients. Explain what there is to be gained and how the entire organization is going to be aligned. Otherwise, assumptions will be made that they are the ones bearing the brunt of this change. Show them the upside, which lies in tangibly demonstrating clinical quality.
  3. Data. It’s easier to say than to deliver on, but you have to give physicians data on their panel size/demographics, clinical outcomes, to the extent you can get clinical costs, and more. Also, get them comparative data, which should be blinded initially to ensure the data is correct, and then once you have enough built up to be meaningful, make it transparent to all providers. It’s the way to get us all in the same boat, and the way for us to start to feel like we’re reliant on each other, and focus more on the patient.

The reality is that change is inevitable. CMS has said it wants 70 percent of its payments under a value-based stream of contracts by 2018. Whether this happens for your organization in late 2017 or late 2018 doesn’t matter; it’s inevitable. There are going to be winners and losers, and the winners are going to be the ones who learn how to do this sooner.

Teaming — like a good pit crew.

For more information on how JHD Healthcare Partners can help your organization through this transition, please contact us at www.jhdhp.com/contact.html. For a copy of the “Cowboys and Pit Crew” commencement address, please visit newyorker.com/news/news-desk/cowboys-and-pit-crews.

 

From the Mouth of an M.D.

“They make these empty promises.”

Hearing directly from physicians on their work life is always so impactful to me. With the JHD Group, I enjoy helping physician groups and health systems learn how to work together in mutually beneficial relationships that benefit patients. I was at the AMGA Conference this spring when I heard something so disheartening, spoken by a respected physician, about his experience with administration:

“People come out and talk to me and say, ‘We’re going to fix this’ — and then they never come back.  They make these empty promises and they act like they’re listening to me, but they don’t.”

This intelligent, talented, busy physician with whom I was talking about physician communication was recounting his experiences to me. Promises — empty promises — seemed to be his experience with administration. Besides not fostering an ongoing exchange of ideas, unfulfilled promises like these this physician experienced actually breed distrust and discontent.

No hospital wants that.

physician

 

Many health systems intellectually understand that physician communication is important.  At this very conference, I heard it preached over and over again: “Communication, communication, communication.” Everyone will nod in approval, think to themselves how important that is — and then go back to their busy day jobs and not do the work it takes on an ongoing basis to create and foster a culture of physician engagement.

I say “culture” because it’s not about an “initiative” to inspire trust among physicians. It’s not one event, one newsletter, one meeting. Rather, it’s about an approach to how you do business and ultimately recognizing the value that physicians bring to a system with their unique perspective and needs, and how their satisfaction can greatly influence your business, especially in the new landscape of healthcare. To create a culture of engagement, it requires involvement from your entire senior leadership team (e.g., no one single person in charge of physician engagement).  Do something daily to communicate with them, and keep it short and simple.

Here are a few ideas:

  • Visit physicians regularly, in-person and via telephone
  • Host a physician-only internal website where news can be posted for transparency, CME opportunities and promotions can be announced, and other robust content and industry news can be shared with physicians
  • Consider creating a closed Facebook group for physicians and administration
  • Pass along articles you find insightful
  • Host a webinar on a topic physicians will find useful, educational or interesting
  • Conduct physician mixers, where you also invite the physician’s right-hand person, their office manager

Understanding their communication needs and style also shows them that you care. E-mail is not always effective with physicians because of their limited availability of time.  Bullet points are best if you’re going to communicate with them in written form so that they can skim it.  Don’t overwhelm them with needless content; respect their time, intelligence and experience. Find that happy medium.

Most of all, it’s important that administrators listen. When physicians give you feedback, take it seriously. Respond to them promptly. If you don’t know an answer, tell them you will find out and then get back to them.

I asked this physician what his hospital administration should do to allow him to feel more engaged.  His insightful thoughts:

“Come to my office, talk to me, see what’s going on in my practice. Have a way to listen to me.”

From birth to grave, physicians take care of our patients.  Engage these important clinicians with a culture of communication that integrates their voice with that of hospital administration.  Your business will thank you.

Accounting for Accountable Care

Note: This is the second in a two-part series on improving profitability from the JHD Group.  Need to know how to implement these ideas?  Get started with a complimentary conversation today.

Accounting for Accountable Care

Who doesn’t love a good come-back story?  For one 243-member physician organization with which the JHD Group has the honor of working, the story seemed more like a sad drama than a celebratory hero story. Going from a mindset of physicians “costing” a Physician and patient smhealthcare system millions each year and instead looking at the long-term value in enabling physicians to be a profitable pieces of a system’s healthcare business has made all the difference.

Now, that group is now a “comeback kid” with success under its belt that has other physician organizations and hospitals asking themselves how they can achieve that kind of profitability.  Is it possible?  Yes!  Here are a few tips to add to your playbook for a Cinderella story of your own:

  1. Choose the right EMR for your organization, and understand fully how to implement it. Ask yourself a few questions, like: Are you able to see lab work across the continuum? Can you use your system for both your billing and your documentation system you use?  If you don’t have the same product for both sides, does it interface with the other system well?  Proper populations management necessitates monitoring throughout your system, and all that visibility matters as you move toward becoming an accountable care organization.
  2. Carefully consider staffing at all levels. Take a good look at your management teams at all levels. Ensure you have a mix of experts in the right specialties, so that you have people who concentrate on specific aspects of the medical group. Someone who understands the operations in physician offices and can work to optimize operations and efficiencies and is committed to reducing costs is a must-have, as well as someone with a good grasp on financials who can be critically important to monitoring the health of the business side.
  3. Optimize clinicians at the top of their licensure. Your office administrators need to have the same quality and dedication as your senior management team — it’s important that your office administrators are talented, smart people who can not only work the financials in the office, but also assist the physicians to make sure they can do their jobs well. Optimize clinicians at the top level of their licensure to allow them to be as effective as possible — consider the full capabilities of your nurses, aids, P.A.s, nurse practitioners, etc.  Take a careful look at how you generate productivity in the office, properly using that mid-level to enhance the ability of the physicians to see more acute patients and those patients who need more time.
  4. Understand your role in the community. Know how your group fits into an ACO within the confines of your region and how you can work even with your competitors to help manage the health of the population. A naive health system is one that thinks it can do it all by itself, and that’s simply not true. All of the tools of the community have to come together to accomplish this, and you need to have good relationships with all of them. Know your part in making sure that the patient gets what they need. Keep your eyes open to opportunities to be creative in how you treat the health of the people in your area and what your role can be in that process.
  5. Learn how social media and online access fit into your marketing and operations strategy. How do you use social media to move your services forward? How do you manage all those social networks and who keeps up with them on a day-to-day, or hour-to-hour basis? Who is going to ensure you respond appropriately to questions, comments and messages? Smart organizations are taking a careful look at how to employ everything from social media to patient portals to connect with their patients and help them to be an active advocate for their own health. Dedicating professionals to the management of these initiatives is imperative.

Is becoming accountable care capable on your organization’s agenda?  Get started today with a call to the JHD Group.

How Much for That Physician?

Note: This is the first in a two-part series on improving profitability from the JHD Group.  Need to know how to implement these ideas?  Get started with a complimentary conversation today.

How Much for That Physician?

What does a physician cost a hospital organization per year?  Typical thinking has it somewhere between $100,000 and $200,000 per physician per year.  But it’s just that kind of “typical thinking” that has healthcare systems losing money each year. Rather than focusing on cost, smart organizations are looking at long-term value with methods that support, enrich, and enable physicians to be a profitable piece of your business.

One organization decided that it was done losing money in its large physician group and, in a period of two years, went from a loss to a profit. This physician network was completely able to reverse its group’s losses and generate a profit for the 243-member physician organization, now positioning itself as “Accountable Care Capable.”

How did this happen? Is it the kind of change you need to substantially improve profitability and operational effectiveness for your own healthcare organization?  Here is a prescription for long-term health that starts with steps any organization can take to go from seeing red to being in the black.  To start making change for your group, consider these tips:

Physician healthcare1. Take a picture.  Get a good look at your organization. Take a high assessment of the physician group — look at the financial piece and familiarize yourself with the methodology for compensating physicians. Ask yourself these questions: does it meet fair market value, is it incentive-driven so docs have skin in the game?, or are they just getting a salary.  Is there pressure on them to perform? If you’re creating an environment for physicians to focus on patient care, the expectation should be that they can do that as well as they can. 

2. Create a system of equality and transparency. Physicians have to feel like they’re being treated fairly, with ethics and integrity across the group.  Apply the same rules to everybody. For example, in regards to compensation, pay the physicians fair market value for his or her specialty. While different models can exist within the same compensation plan, special deals should not be created to recruit specific specialties. Showing favoritism toward one immediately creates tension with others — and you want all specialties to be as invested in your business as you are.

3. Carefully evaluate additions to your system. If you are considering acquiring an established practice, you really need to evaluate that practice on several fronts: How many more years do those physicians want to practice? How many patients will they be bringing with them? What is that physician’s future plans for growth? Does that physician fit well within the established group’s dynamic? Things like this need to be considered before making decisions around adding to your system.

4. Communicate, communicate, communicate. From compensation plans to growth strategies to policies and procedures, you simply can not over-communicate to physicians. Operate on the assumption that the message has not been heard by everybody, and continue communicating. Remember that they are not only on the front lines of your business, seeing patients, but are also an important part of your business’s overall strategy.