Is any of this relevant if physician fees are cut?

You try to do the right things to sustain your business. You set high standards for delivery of quality care, follow the basic tenets of marketing, align your organization so that everyone in your firm "gets it", avoid unnecessary expenses but identify important growth opportunities and prudently invest so that you remain competitive and serve your patients well. But can you afford investing in the assets you require to become or remain successful in this new era of health care reform? For example, can you afford an electronic health record system? Even absent a Meaningful Use bonus, the penalty looming in 2015 for those who fail to adopt EHR-Meaningful Use creates a financial disincentive for failing to make the leap. Even those who have recently purchased or intend to purchase an electronic system face significant (and expensive) implementation challenges in order to convert to e-charting, let alone use such a system "meaningfully". Can you afford not to invest in an EHR system?

And what of the SGR-mandated cuts to the Medicare Fee Schedule due to take effect on December 1, 2010 and again on January 1, 2011, etc? What many lay folks fail to understand is that this would, unless Congress acts now, not only quite negatively impact Medicare fees, but that our commercial insurance contracts are also at risk as these are typically tied to this very same Medicare fee schedule, albeit a couple of years behind the current year's rates.

Furthermore, while Paul Revere's warnings were inarguably of more dire significance, it's nevertheless true that "The ACOs are coming!" (January 1, 2012), with an attendant, inevitable, continued shift to a pay-for-performance, "captitated" payment system (both government and private) rather than the likely unsustainable pay-per-encounter methodology currently used to compensate physician and hospital services.

Is all of this (and more) enough to make doctors eschew private practice for salaried positions with hospitals or large multi specialty group practices? Or a career as a physician altogether? Over half of physicians in the US are now employed by hospitals/group practices, the first time since such statistics have been recorded that those employed this way exceeded those in private practice. And with the "individual mandate" to have health insurance on the horizon, it's likely that the shortage of physicians, especially primary care, will be exacerbated in a few years. This, despite the fact that many medical schools have recently expanded their incoming class sizes, and new US medical schools are being added. Even with 4 years of college, another 4 years of medical school, and several years of post-medical school residency training in a prospective doctor's future, and with mounds of resulting debt, being a physician and taking care of patients obviously remain highly valued by those who covet entry into the medical profession, and to be sure, those who are from time to time in need of medical care.

Spencer Johnson's "Who Moved My Cheese?" provides some common sense consultation that is applicable today, even though it was written in 1998. Not specific "how to" advice per se, his story is about change that is scary and potentially life-altering - recognizing when it happens or is about to happen and making adjustments as needed. If the cheese you've become accustomed to enjoying is no longer to be found, go forth and find new cheese.

What does this mean for medical practices?
Here's a present day example. Last week I attended a lecture by Dr. Patricia Gabow, CEO of Denver Health and Hospitals, a largely indigent demographic health care system in Denver, CO. It was quite remarkable to learn that despite almost half of their patients being uninsured, they found a way to become profitable and sustain this profitability year after year while simultaneously improving the care of their patients. In fact, an obvious conclusion to draw from their experience is that healthier patients utilize fewer costly resources. Thus, their focus is on prevention, reducing hospital admissions and lengths of stay, arranging follow up care to prevent costly readmissions, etc. They implemented a system wide EHR. They employ a large staff of physicians, many of whom are engaged in leading the way toward more efficient and effective care. Their organization is aligned with a common purpose.

Maybe the "handwriting on the wall" is not that we will lose our autonomy or that the physician-patient relationship will suffer, or that the positive aspects of health care in the US will vanish under excessive regulation and fee cuts, but that we can refocus our efforts to create and expand health care systems in a way that is professionally satisfying, provides better care for more of our citizenry while continuing to provide high quality care to those already able to get it, and provides reasonable physician compensation that is in line with the many years devoted to becoming a physician, as well as the costs of this education.

Perhaps this evolutionary process will create systems that will in effect become the new cheese. Are you prepared to go forth and find it?

What is Your "Elevator Speech?"

Can you succinctly state what your company does, where it’s headed and how you plan for it to get there? In the April 2008 edition of Harvard Business Review, Collis and Rukstad ask an important question: “Can you say what your strategy is?” Of course, they ask this because their research found that many firms’ CEOs cannot succinctly summarize their organization’s strategy. And if the CEO cannot do this, then it’s a logical assumption, which they found to be true, that the firm’s employees cannot either. As they state, “it is a dirty little secret that most executives don’t actually know what all the elements of a strategy statement are, which makes it impossible for them to develop one”. They offer a straightforward solution: define what the elements of strategy are so that its formulation becomes easier, with subsequent implementation becoming much simpler because the strategy can now be easily communicated and understood by everyone in the company.

The value of this clarity to a medical practice, as in any organization, is alignment (as eloquently stated by Harvard’s Michael Porter and noted in one of my previous posts on this blog). Here’s an example. Your front office employee receives a call from a concerned referring physician who wants one of her patients seen by your specialist practice within the next day or 2. Your employee knows that you and your partners are booked solid for the next 3 weeks. She has some options. She can tell the referring doctor that you’re booked and the next available office slot is in 3 weeks, and if this doctor says in response that never mind, she’ll call your competitor because they’ll make room, she responds with something like “that’s just the way it is if you want to see Dr. ___, good luck”, you will understand one reason why your market share is being eroded over time. If your goal is to maintain and/or grow your practice, and you plan to do this via a strategy of superior customer service, it will be critical for your front-line staff to understand this so they can help prevent situations like in this example. Perhaps they now will say to the referring doctor something like, “I don’t see an opening on Dr ___’s schedule this week, but we know how important it is to all concerned to get urgent patients like this one in ASAP. Please provide the patient’s phone number to me – I’ll let Dr. ___ know what the problem is and see if he can squeeze this patient in tomorrow, and then I’ll call the patient and see if we can work out a time that’s convenient for him. Should I have Dr. ___ call you?” Imagine what market share might look like over time if this was the essence of the conversation.

Here’s a pearl of wisdom attributed to Yogi Berra. “If you don’t know where you’re going, you may not get there.” Rukstad (see above) identified objective, scope and advantage as critical components of a good strategy statement, a road map to getting where you want to go. What do you want to achieve and in what time frame? What products/services will you provide, and in what kind of setting? What will you do differently that will give you an advantage over your competitors?

Food for thought.