Knowledge is Healing

No. 1 on the list: maintaining physician reimbursement in an era of declining revenues. No. 2: dealing with operating costs rising faster than revenues. Thirty-two other areas -- most linked to the top two -- were called "considerable" or "extreme" challenges.

Total operating costs for practices have risen 43.1% since 2001, said William F. Jessee, MD, president and CEO of MGMA, while the Consumer Price Index has risen 24.2% and the Medicare conversion factor has flatlined at 0%. The factor converts the geographically adjusted number of relative value units for each service in the Medicare physician payment schedule into a dollar payment amount.

Physician income barely kept pace with inflation this year, especially in specialty practices, according to MGMA's annual physician compensation and production survey. Dr. Jesse said this is prompting many doctors to sell their practices to hospitals. Those remaining are less likely to invest in the practice.

"The only way a practice can keep up is to increase volume," Dr. Jessee said. "But if you're running as fast as you can, you can't run any faster."

The MGMA conference had many sessions on tips and tricks to cut costs or add business. But the gloomy consensus was that physicians on their own could only do so much and the answers need to come from payers -- private, commercial and, especially, Medicare.

Had this emergency happened four days earlier, it would have been a completely different scenario.

This seamless coordination of care is what Beth Israel Deaconess Medical Center in Boston had in mind when it made the $20 million decision to subsidize the implementation of electronic health records for its 1,300 affiliated physicians, including Dr. Kelly, who had just gone live four days before the emergency.

"The report [delivered from the EMTs to the emergency physicians] was clear, concise and complete. There were elements that were immediately useful. In that sense, [four days before] I had nothing equivalent," Dr. Kelly said. "That was exciting."

But Beth Israel Deaconess Medical Center is one of the few hospital groups taking advantage of new exceptions to the Stark laws and safe harbors to anti-kickback rules that paved the way for hospitals to help physicians implement health IT. The exceptions are scheduled to expire in 2013.

With its deadline having passed for the public to submit comments on the proposed Highmark-Independence Blue Cross merger, the Pennsylvania Insurance Commissioner's office says it expects to give, or not give, its blessing by Jan. 27, 2009.

Between now and then, Pennsylvania legislators will have their chance to weigh in one final time, and the commissioner's office will review public and lawmaker comments as it considers the merger, which was first announced on March 28, 2007.

Independence, based in Philadelphia, and Highmark, based in Pittsburgh, want to combine to create a Blues plan with an estimated 8 million members and $23 billion in annual revenue.

The combined company would be the third-largest Blues plan in the country by membership.

The U.S. Justice Dept. has given the merger the go-ahead, leaving final approval to Pennsylvania Insurance Commissioner Joel Ario.

After hosting a series of hearings this summer and receiving hundreds of pages of public comment, the department cut off the official public comment period Oct. 14.

In a note submitted that day, Henry Allen, senior attorney for the American Medical Association's Private Sector Advocacy unit, argued that the merger should be blocked based on the negative impact on potential competition. The letter was written in response to a request from Ario after Allen's testimony on behalf of the AMA at the Philadelphia public hearing.

"They've had certain nonprofit tax exemptions, they've been allowed to accumulate money, and we feel some of this money could be put to better use for the public," said Michael Sandler, MD, president of the Michigan State Medical Society.

Michigan is among the states where the debate has been especially heated because health plans have made requests to state government to help them out. While Michigan plans have sought favorable insurance regulations, plans in Pennsylvania have asked for permission to merge and New Jersey plans have sought permission to convert to for-profit status.

Opponents of those proposals, including doctors' organizations, have pointed to these plans' multibillion-dollar reserves as evidence that they aren't working in the public interest and don't need government help.

Goldman Sachs health care industry analyst Matthew Borsch estimates the 30 largest nonprofit Blues have a collective $37.5 billion in reserves, $20.3 billion higher than required by the BlueCross BlueShield Assn. According to state filings compiled by Borsch, those 30 Blues plans more than doubled reserves from $16 billion in 2002 to $36.2 billion in 2007.

"Surplus builds up, in part, because reimbursement to physicians falls," said William Custer, PhD, director of the Center for Health Services Research at Georgia State University. But "if you try to squeeze the insurer too much, they may not be able to stay in business."

Meanwhile, about 55 miles east, the five other physicians in Dr. Ulrich's family practice were trying to conduct business as usual in their Zanesville and New Lexington, Ohio, offices. But first there was some scrambling to make sure Dr. Ulrich's patients were seen.

That wasn't a new challenge for this practice. Dr. Ulrich has been called away twice before -- once for three months, once for six. He served as a flight surgeon in Balad, Iraq, flying with aircraft crews, doing clinical work and flight physicals, and being "just a regular doctor."

Tours of duty can take a toll, not just on doctors going to the war zone but also on those left behind. Both groups must work together to adequately plan for the absence and notify insurers, affiliated hospitals and others.

The emotional stress also extends to both groups. "You listen to the news and just pray he's not in danger. We say a lot of prayers around here when he's gone," said Melody Field, a nurse practitioner for Dr. Ulrich.

This time, Dr. Ulrich spent only a few days in Columbus. As the soldiers left for Louisiana, he was back in his office.

When the National Guard calls a physician to duty in the Middle East, it provides several months' notice to allow for working out a plan for the practice, contacting patients and making arrangements, said Maj. Randall Short, a Guard spokesman.

« Previous Page — Next Page »