Get Ready …the ACOs are Coming

When we talk about hot topics in healthcare reform, ACOs are on the top of the list.  But let’s back track a bit. 

Prompting physicians and hospitals to change how they are both clinically organized and paid for services has been identified as essential to improving healthcare quality and efficiency.  In 2009, U.S. health expenditures represented more than 17 percent of the Gross National Product and are predicted to rise to almost 20 percent by 2019.  Medicare expenditures alone are expected to almost double from approximately 500 billion dollars in 2009 to almost one trillion in 2019.

That leads us to what some health reform experts say is a solution to increased healthcare costs and is gaining strength among policymakers who want to control these costs and boost quality in healthcare.  The healthcare entity we are speaking of is called an Accountable Care Organization (ACO).  While experts still have not reached a consensus on the exact components of an ACO, health services and policy literature describe them as structures dedicated to quality and efficiency with the mission and the authority to impose practice, reporting, and compensation standards (including penalties and rewards) across a group of physicians on behalf of the patient population. These features have been identified as carrying certain advantages including fostering quality through clinical integration of care across healthcare settings, greater financial efficiency, and increased transparency and information about the process, costs, and outcomes of healthcare.

If you have not been contacted about joining an ACO, you might want to start thinking about what entity in your area you may join with in the future. That does not mean you will become an “employed physician,” but it does mean you could select one health system or medical group in your area you trust and value enough to collaborate with.

ACOs makes sense to many policymakers because the resources that flow from the decisions physicians make with patients account for a big portion of overall health care costs, regardless of where the care actually takes place.  One problem, however, is that physicians are good at treating patients, not at risk management, so many physicians may get stuck with high-risk patients and some ACOs may become insolvent unless there are adequate Medicare risk adjustment payments.

If ACOs are formed, physicians who have the ability to negotiate from a position of strength when dealing with hospitals and payers are likely to fare much better than physicians who lack any leverage.  So now is a good time for physicians to consider how they can increase their leverage by considering joining a larger group.  Physicians who have the ability to negotiate as a group can work to increase their share of the overall payment.

Start Planning your Community Outreach Plan for Colon Screening Wellness Benefit

As of September 23, several new provisions of the health care reform law took effect, changing private insurance medical coverage for a vast number of people.

Now is the time to reach out to your patients and leverage this provision

Anyone seeking preventative care procedures may not have to spend money on a co-pay or other out-of-pocket expenses when seeking a preventative care procedures and programs such as colonoscopies. Many other procedures are included such as mammograms and flu shots.

The provisions aim to help those with pre-existing medical conditions, parents who want to keep grown children under their health plans, and patients who have reached annual and lifetime limits on coverage.

They also won’t have to pay extra if treated at an emergency room that is out of their insurance network.

And health insurance carriers can no longer retroactively cancel insurance if a person mistakenly omitted a past medical condition when acquiring coverage.

These provisions took effect on September 23rd, six months to the day after President Obama signed into law the Affordable Care Act. A provision intended to close the Medicare prescription drug “doughnut hole” took effect this summer, and many more changes to the public and private health care systems will be phased in by 2014.

However, for many patients, the provisions will become a reality only if their health insurance changes. So a free colonoscopy may not be in their immediate future.

If an employer’s health insurance plan existed before March 23, when the bill became law, and the company makes no changes to coverage, then that grandfathered plan must implement only a few of the new provisions.

But health experts think that many people will gain from most or all the provisions. Businesses change health care plans almost every year, with the next big annual deadline coming October 1.

For more information visit

www.healthcare.gov/news/factsheets/overview.html

5 Trends for GI ASCs

Based on some of my observations, these are five trends we’re seeing for GI-driven ASCs.—Barry Tanner

1. Slight decline in volume. Volume was down at the beginning of the year, then it went back up and now it’s down again slightly. About half of Physicians Endoscopy centers are down 1-2 percent in volume and the other half are flat or up. “I hate to call it a trend yet, but it could shape into one,” Mr. Tanner says. “As joblessness lingers, savings are starting to run out and we’re seeing a more conservative decision process on the part of patients for what they see as elective procedures.”

2. More patients with high-deductibles. “In this period of uncertainty, with ObamaCare on the horizon, employers are using higher deductibles to pass on health insurance rate increases to their workers,” Mr. Tanner says. He believes the trend toward higher deductibles can only harm volumes

3. More colonoscopies next year. The elimination on Jan. 1 of the Medicare copayment for elective colonoscopies will have a very positive impact, Mr. Tanner says. ASCs need to reach out to family physicians who are responsible for many of the colonoscopy referrals. “We need to point out the risks of colon cancer,” he says. “In past years we haven’t looked as aggressively at colonoscopies.”

4. More physician interest in ASCs. As physicians see their reimbursements squeezed, Mr. Tanner says they need to supplement their business through ownership in an ASC. “A great proportion of their reimbursements are at or near Medicare levels,” he says.

5. New ASC growth in CON states. Endoscopy centers have not yet reached the saturation point, particularly in states with tough certificate of need regulations. Some of these states have severely restricted ASC development in the past, but Mr. Tanner believes CON authorities are looking more favorably on ASCs because they are less costly than HOPDs.

8 Ways ASCs will be Impacted by Health Reform

I believe ASCs will be net winners under the new health reform law.  We don’t know how this new law will mature over the next 5-10 years, but I do believe that ASCs will essentially be net winners in the game that is about to be played because of their proven ability to deliver high quality, cost effective care.

Here are the ways I expect ASCs will be impacted by health reform:

1. More surgical volume. Surgery centers will take a share of the 32 million previously uninsured Americans who get coverage in 2014. Many of these patients will be paying at Medicaid-level rates and that would be painful and put new pressures on centers to be more effective and efficient, but I believe ASCs could handle it. Since most ASCs have at least some excess capacity, they could absorb more low-paying patients without losing money. As with most industries, the most efficient and well-managed ASC will rise to the occasion and be successful.

2. An opportunity for better relations with hospitals. Since hospitals alone will not have the capacity to deal with 32 million more people seeking care, this could be an opportunity for hospitals to start seeing ASCs as part of the solution, not the problem.

3. Payors will take advantage of ASCs’ lower costs. ASCs offer a cost-effective alternative for insurers who find themselves under increasing pressure to control costs. Insurers’ expenses are going to rise dramatically for at least two reasons. First, they will be barred from money-saving practices such as denial of coverage for preexisting conditions. Second, plans will have to deal with an influx of previously uninsured people with significantly more health problems, the result of not having had coverage before.

4. More physicians will join ASCs. Physicians’ fees are going to be squeezed even more than now, prompting more of them to invest in and work in ASCs so that they can share in the facility fee and take advantage of more efficient scheduling.

5. Better productivity adjustment than expected. The original House reform bill created a “productivity adjustment” that would have gone into effect this year, causing a reduction in ASC reimbursements. However, the final law starts the adjustment next year, when it is expected to provide an increase in reimbursements. While I’d prefer not to have the productivity adjustment at all, pushing it back a year will be helpful. It will give the economy a chance to recover, and any potential increase in the CPI will help to offset the negative impact of the productivity adjustment.

6. More patients for screening colonoscopies. The health reform law bars Medicare and private insurers from charging patients copayments for screening colonoscopies, starting in 2011. That change is expected to increase volume, which would directly benefit ASCs that perform colonoscopies.

7. Not providing cost reports may actually be a disadvantage. The final health reform law removes a proposal in the original House bill that would have required ASCs to submit Medicare cost reports to CMS. Some ASC leaders argue this data would only be used to reduce reimbursements, but the discarded requirement might actually have helped ASCs.

I am in favor of cost reporting as long as proven low-cost providers are rewarded for their efforts and not punished with even lower reimbursement. Medicare currently pays ASCs 41 percent less than HOPDs receive for the same procedure, and we should be proud of this and strive to be even better. If cost reports could have been used to reward ASCs for their low cost efficiency, that would have been a positive accomplishment.

8. Ban on physician-owned hospitals doesn’t affect ASCs. Most ASCs could never be physician-owned hospitals because their physical plant could not be transformed into a hospital. Although I hate to see any important innovation stymied, I don’t think that this negatively impacts ASCs in general.

Health Care and Health Care Reform-UPDATE

In order to fully appreciate the current health care reform initiatives it is necessary to begin with a brief review.
What is the state of health care in the U.S. today?

• According to the Institute of Medicine of the National Academy of Sciences, the United States is the “only wealthy, industrialized nation that does not ensure that all its citizens have health coverage”.
•  Current estimates are that spending on health care in the U.S. is about 16% of GDP. In 2007, an estimated $2.26 trillion was spent on health care in the U.S. or approximately $7,439 per capita.
•  Health care costs are rising faster than wages or inflation, and the health care share of GDP is expected to continue its upward trend, reaching 19.5% of GDP in 2017.
•  A recent study found that medical expenditures were a significant contributing factor in 62% of all personal bankruptcies in the U.S. in 2007.
• The U.S. health care system already has substantial public components. The federal Medicare program covers nearly 45 million elderly and some people with disabilities. The federal-state Medicaid program provides coverage for the poor. The State Children’s Health Insurance program (SCHIP) extends coverage to low-income families with children. Merchant seamen are covered by the Public Health System; and retired railway workers and military veterans are also covered by the government.
• The Congressional Budget Office (CBO) has stated that the Medicare program as currently structured is unsustainable without significant reform, as tax revenues dedicated to the program are not sufficient to cover its rapidly increasingly expenditures.
•  The Government Accountability Office (GAO) reported that the unfunded liability facing Medicare as of January 2007 was $32.1 trillion which is the present value of program deficits expected to be incurred over the next 75 years in the absence of reform.
•  According to the U.S. Census Bureau, people in the U.S. without health insurance coverage at some time during 2007 totaled 15.3% of the population or 45.7 million people. In 2009, the Census Bureau estimated that there are 47 million Americans who do not have any health insurance coverage.

This year, give yourself a gift that keeps on giving!

ASC ownership is one of the best ways physicians can take command of their financial future. As a GI or specialty physician, owning your own center just makes sense.  Economically, regardless of the reimbursement climate, owning your own center grows your bottom-line through your center’s collective procedure volume, efficiency, and most of all, through the passive facility fees you collect from every patient that is cared for at your center. 

But it is not only your financial well being that is taken care of.  With direct input and control over staffing, equipment and scheduling, your clinical life gets a boost of improved patient care, which is why you became a doctor in the first place.  Your patients are serviced better, quicker and with more personalized care than would be possible at a large hospital or private practice. And with increased efficiency in scheduling, your workflow takes on the rhythm you want, rather than being dictated from the outside.  With your time being managed more efficiently, you in turn have more time to take care of yourself, be it pushing even harder to serve more patients, or even taking the afternoon off to be with your family (or getting in a round or two at the links!).

So the question becomes, not whether you should explore opening a center, but rather, why partner with a company such as Physicians Endoscopy to make this venture a reality? PE has helped many physicians across the country start and maintain their own ASC. Some of the perks physicians enjoy when they partner with PE:

• Physician majority ownership
• Physicians Control
• Increased finanacial opportunity
• successful recruiting assistance