How Physicians can Turn Chaos into Opportunity

Without a doubt, today’s health care environment is in disarray. In many markets, reimbursement for clinical services to physicians has steadily decreased.  Also, many managed care plans are negotiating for physician services at rates below what Medicare pays.  As a result, physician income has suffered dramatically, and most physicians find themselves working harder for less.  A growing number of physicians, frustrated by increasing control over their practices by health maintenance organizations, have attempted to unionize, unsuccessfully.  Physicians in one major urban market have even filed suit against a payer with a strong market share in an attempt to limit its power.  Managed care organizations are merging and therefore gaining more market share and greater power.  Provider networks are tight and physicians often find themselves locked out or disenrolled as the payer condenses its provider list.   Many physicians find themselves too busy to respond to such chaos, and they therefore end up waiting for the fallout instead of being proactive.


The ancient Chinese defined “chaos” as “opportunity”, as taken from the philosophy that change comes from disorder.  In this time of chaos within healthcare, physicians need to seize the opportunity to take a strong stance for survival and to be proactive in actions taken to strategically position themselves in the market.  The most effective way to respond in a confused environment is to differentiate the medical practice based on the quality of its services.  Of course, any practice can say it offers quality, and have you ever known a physician to say he or she didn’t?  But the ability to demonstrate quality shall ultimately differentiate healthcare providers, presenting some with opportunity and the others with fallout. 


To demonstrate quality, especially to a managed care payer, a medical practice must prove its value.  Value is provided in two arenas; (1) positive clinical outcomes of treatment that demonstrate effectiveness of care and improvement in disease markers and quality of life for the patient, and (2) efficiency and accountability in the use of resources and ultimately the cost of care.  Only through a valid and reliable process of measuring outcomes can a medical practice demonstrate these elements of quality.


To be sure, the managed care plans and other payers are developing physician profiles and they have most likely created a “picture” of you or your medical practice client.  Extreme caution should be taken with these efforts because the data used to build such profiles comes solely from claims data related to utilization and cost.  Only actual practice data can provide a true picture of the clinical outcomes as well as the cost outcomes.  You must recognize that the practice’s data is extremely powerful, and that only you and/or has the opportunity to wield such power.


A proactive physician will engage in serious efforts to track his or her outcomes, starting immediately.  With such data, the practice can gain strong leverage in its relationships with payers who need such data.  Outcomes data should be used as a negotiating tool to obtain differential reimbursement rates that reward performance.  Most payers place a value on demonstrated quality and to prove it they offer policy statements that say they reward or incentivize such providers.  Yet, few physicians are ready to capture this opportunity, thus providing an advantage to those that can.


However, physicians are often resistant to committing to outcomes measurement due to lack of understanding, uncertainty of the process, or fear of the cost or burden.  A qualified consultant, such as a CPA, can help guide a medical practice with this process, such as assist in the identification of appropriate measures, as well as advise on a scientifically valid process. Help can also be offered in setting up systems within the office to track clinical outcomes. In addition, keep in mind support is available through many organizations and associations as well, in the form of data warehousing, data processing, grants, or research funding.


Chaos is noted for breeding stagnancy and inaction.  Medical practices should resist complacency and take charge of the future so as to maximize its potential.  Medical practices have the power of outcomes data available to it, and this is what ultimately will take physicians to the next level.

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