By John Mitchell
MARCH 19, 2014 – An important factor in the success or failure of the Affordable Care Act (ACA) will hinge on one of the most fundamental of economic laws: supply and demand. All the new patients gaining access to the health care system via insurance exchanges will need a doctor. To meet this surge, the health care system must rely on primary care doctors composed mostly of family practice and internal medicine physicians. However, this is shaping up to be a challenge. Two emerging trends — physician employment by hospitals and concierge medicine, where patients pay their primary care doctor a monthly fee for ready access, are emerging as potential disruptors to the population management principle of the ACA. Population management seeks to actively manage wellness to prevent chronic illness leading to hospitalization. To achieve this end, the US health care system will need primary care doctors to see more patients. And therein lies a potential problem.
The Annals of Family Medicine projects a shortage of 52,000 primary care physicians in the next decade; other studies have arrived at similar conclusions. The reason for such a shortage is evident when the demographics and finances of primary care medicine are considered. Primary care doctors are the lowest paid specialists in medicine owing to the fact they do few high reimbursing procedures, as do for example, surgeons, cardiologists and radiologists. Physician earnings in general have been decreasing for the past decade primarily from downward pricing pressure from insurance payers, both commercial and public payers.
Burnout rising among doctors?
For some primary care doctors in a traditional private practice, the only response to falling income is to work more hours to see more patients. This can necessitate seeing 35 or more patients a day and working 80-100 hours a week. It is no surprise that reports of physician burnout is prevalent. In a recent study conducted by the Mayo Clinic and published in the Journal of American Medical Association, Internal Medicine almost half of physicians are experiencing at least one symptom of emotional burnout, ranging from exhaustion to depersonalization to low sense of personnel accomplishment. The study, which Mayo believes is the first of its kind, states that doctors on the “front line of care” (primary care) are especially susceptible.
Physicians seek new practice options
For a growing number of physicians, the answer to this stress is employment by hospitals. Some 40 percent of all primary care doctors are now employed by hospitals and health care systems. However, there is growing evidence that physician productivity declines (they see fewer patients) when they become employed. The number of employed doctors was projected to grow six percent in just one year from 2012-2013 according to Jackson Healthcare. Other primary care doctors are seeking an entrepreneurial solution to improve their lot. They are adapting a concierge medicine business model in which patients pay a fee averaging $135-200 a month for ready access to their doctor. This access includes same day appointments, phone calls, email, texts and even house calls. As with their employed counterparts, concierge doctors see fewer patients-up to 80 percent fewer patients compared to doctors in a traditional private practice model. While only five percent of doctors are currently practicing in a concierge model, that number is projected to grow by 15 percent a year according to Michael Tetreault, Editor-in-Chief, of Conceirge Medicine Today, a leading trade site.
Hospitals need to actively manage employed physicians
The challenge of employed doctors seeing fewer patients is not insignificant for hospitals. When hospitals employed doctors in the 1990’s, it didn’t go so well. Hospital executives learned that while doctors were happy to transfer the risk of a medical practice to hospitals, they were difficult to manage, owing partly to the lack of productivity measures in their employment agreements. But things are different this time around. The physician labor pool is now largely composed of young doctors who, more often than not, have always had the expectation they will be employed. Also, in a discussion about the 1990’s physician employment trend John R Combes, M.D. leader of the American Medical Association’s Leadership Forum, in the 1990’s hospitals employed doctors as a defensive measure to managed care and were volume centric. This time around hospital’s are making the move to employ doctors to achieve population management and quality outcomes. Hospitals benefit in requiring employed gatekeeper primary care doctors to refer to specialty medical services, such as cardiac and oncology. In a recent survey conducted by Merritt Hawkins of 3,000 hospital Chief Financial officers the median revenue generated by a primary care doctor was valued at $1.6 million compared to $1.4 million for specialists, the first time in the 11 year history of the study that the revenue generated by primary care doctors has eclipsed that of specialists.
But the concern remains that the math of primary care access under the ACA does not add up. Hospital salaried doctors do not see the same volume of patients as traditional private practice physicians. And with their concierge medicine physician colleagues, who also see fewer patients, increasingly skimming off middle class patients who can pay for access to their doctors, the patients hospital employed doctors do see will likely be lower income. This increases the likelihood of higher uncompensated care patients for hospitals.
John W Mitchell
SnowPack Public Relations