Editor’s note: This article is the first of a 3-part series.
Practicing medicine in today’s healthcare environment is not for the faint of heart. Historically, successful practices were predicated on providing high-quality patient care; that is, being great physicians. Slowly but surely, over the past 25 years, operating and maintaining the necessary business infrastructure has evolved dramatically, outpacing physicians’ limited time and ability to manage it properly.
Sadly, this new reality may put our passion for practicing medicine at risk, increasing physician frustration and burnout. This is not because we are bad doctors; it is simply that we may not be the best business people. Not surprisingly, as payment models shift, and physicians face lower reimbursements amid growing expenses, many have at least considered — if not seriously contemplated — divesting their practices.
Nephrologists are not alone. The traditional practice of medicine is falling by the wayside as providers across the board look to adapt to a new practice environment. The question is how physicians will survive and what factors should be considered in evaluating the current marketplace and next steps.
Challenges to independent practice
Several developments are motivating physicians to consider different business models to practice medicine, including the shift away from fee-for-service to value-based payments. These changes, initiated largely by new federal laws and increasingly complex regulations, are requiring the medical community to:
- Invest in costly electronic health records to satisfy meaningful use requirements. According to new data from the Medical Group Management Association, physician-owned multispecialty practices spent more than $32,500 per full-time physician on information technology equipment, staff, maintenance and other related expenses in 2015.
- Engage in the physician quality reporting system.
- Implement the Medicare Access and CHIP Reauthorization Act (MACRA).
- Contemplate new integrated care agreements, including accountable care organizations (ACOs) and end-stage renal disease seamless care organizations (ESCOs).
Nephrologists are particularly vulnerable to changes in Medicare since the federal program is the primary payer of kidney care. As such, not keeping up with new requirements can have outsized financial consequences as these programs shift from offering incentives focused on boosting physicians’ participation to penalizing providers who don’t meet certain requirements.
For example, MACRA carries significant reimbursement implications over the next several years, with possible penalties of up to 9% of Medicare Part B revenue for non-participation or poor performance. This year, about 171,000 providers are subject to a downward payment adjustment under Medicare for failing to demonstrate meaningful use.
This article originally appeared on Medical Bag