Over the past several years the underlying themes of this CEO report have evolved from "the healthcare world as we know it will change" to the "healthcare world is changing" to the message of today: the healthcare world has changed and there will be winners and losers.
Hopefully the ultimate winner will be the patient.
The losers will include insurance companies that cannot adapt to the new realities of health insurance marketplaces and new regulations. There will most likely be less acute hospital beds and possibly fewer hospitals. Certainly with the rapid consolidation that is occurring in the hospital arena, hospital systems will be fewer in number but larger. With the new payment methodologies of Accountable Care and bundled/global payments, hospitals that do not adapt and change their business paradigms may not survive.
There will also be losers in the physician space. The expectations on primary care today are different than even two years ago. Many physicians recognize this, but many insist on holding on to outdated beliefs and expectations— putting their future in jeopardy.
Primary care is moving from "pay for volume" to "pay for value." Payment models are transitioning to blended payment models from fee for service and RVU. Physician payment will ultimately involve capitated models heavily laden with incentives around quality and cost. The number of independent primary care practices in this country decreases by the day as physicians are joining IPAs, large groups and hospital systems. Some predict that 75% of primary care physicians will be employed by 2015.
Many physicians are unfortunately stuck in the mind-set of "why should I change if no one is going to pay me more?" While that was the case in some of the early pilots, the current reality is the door is rapidly closing on even getting paid more AFTER practice transformation. The new reality will be antiquated practices being paid less or eliminated from networks and not getting paid at all. One has to look no further than the cost and quality reporting requirements for health information exchange by provider and practice to realize the honeymoon is nearly over. The burden to generate data demonstrating quality as a requirement to participate will ultimately fall to the practice. An increasing number of primary care practices are positioned to participate in shared savings in the ACO environment, but that will quickly involve shared risk as well. Primary care providers and practices that do not provide higher quality at a lower cost will struggle to survive either independently or as part of large systems.
The comment I hear repeatedly from physicians is "I want to practice the way that I did when I chose primary care." Healthcare and our patients' demands have changed dramatically since those days and consequently physicians and the way they practice must change as well. The current healthcare delivery model is not financially sustainable. The Affordable Care Act and the associated reforms positioned primary care extremely well to be the foundation on which healthcare in this country is truly transformed.
The challenge is that many primary care practices are not keeping up with the pace of change in this country. In less than a year, the leadership baton in many markets has been passed from physicians to hospital systems as CMS and insurance companies have laid out the path. In many cases this change in leadership is more the result of inaction by primary care than actions by hospitals. In many markets and systems, physicians are increasingly viewed as a barrier to progress with physicians putting themselves in a position of reacting to change rather than leading change.
We must again reflect that the Future of Family Medicine report stated that if Family Medicine did not change and the healthcare system did not change, Family Medicine may cease to exist. Primary care practices now live in an environment where retail clinics and specialty practices are being recognized as medical homes and even as CMS Accountable Care organizations.
Healthcare in this country is evolving— with independent primary care practices disappearing, hospitals consolidating, payment methodologies changing and the focus shifting from the providers of care to the consumers of care. This trend will not reverse and it continues to pick up speed.
Primary care practices must transition to high performing, comprehensive primary care practices embracing the principles of Patient Centered Medical Home. Furthermore, these practices must become part of medical neighborhoods coordinating and managing care with patients and their families, hospitals, specialists and other stakeholders.
All is not lost for primary care as TransforMED is here to help, but time is running out.