Where Healthcare Is, Where It’s
Going, and How You Can Prepare for
the Future
West Virginia MGMA Conference
Roanoke, West Virginia
September 18, 2014
David N. Gans, MSHA, FACMPE
Senior Fellow Industry Affairs
Medical Group Management Association
The presenter has nothing to disclose.
Copyright 2014 Medical Group Management Association® (MGMA®). All rights reserved.
Healthcare Is Changing - What Will Happen
Next?
The future ain't what it used to be.
Yogi Berra
Baseball Hall of Fame Player, Coach, and Manager
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objectives
This session will provide you with the knowledge to:
1. Define the major issues affecting medical practices today
2. Describe the issues that will affect healthcare in the
future
3. Describe how you can prepare your practice to succeed
now and tomorrow
What do you want to accomplish with today's presentation?
3
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objective 1
Define the major issues affecting medical
practices today
Copyright 2014 Medical Group Management Association® (MGMA®). All rights reserved.
Not Every Current Issue Is New
“The biggest problem directly facing this group today is to see
that the cost of producing professional service is kept within the
ability of the average citizen to pay.”
Harry Harwick, Business Manager, Mayo Clinic
1st Annual Conference of Clinic Managers
Madison, Wisconsin
November 1, 1926
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Healthcare Is and Will Continue to Be a
Significant Portion of Federal Spending
Source: usgovernmentspending.com
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Federal Health Expenditures Are Continuing
to Increase -- Maybe
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Practice Costs and Inflation Are Increasing
More than Medicare Payment
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There Is a Shortage of Providers – and It
Will Only Get Worse
Projections for All Physicians, 2010 - 2025
2010
2015
2020
2025
Supply
709,700
735,600
759,800
785,400
Demand
723,400
798,500
851,300
916,000
Shortage
13,700
62,900
91,500
130,600
• 32 million Americans will acquire health care coverage under the ACA
• 36 percent growth in the number of Americans over age 65
• Nearly one-third of all physicians are expected to retire in the next
decade while medical schools will expand by 7,000 graduates every year
• The shortage is in both primary primary care and specialists, including a
2015 shortfall of 33,100 cardiologists, oncologists, and emergency
medicine doctors
Physician Shortages to Worsen Without Increases in Residency Training, AAMC Center for Workforce Studies
https://www.aamc.org/download/150584/data/physician_shortages_factsheet.pdf
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Recruiting Qualified Staff Is Still Easy, But
Changes Are Coming
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Women Are an Increasing Proportion of
the Workforce
• Women have surpassed men in terms of completing
secondary and post-secondary education
– 2012 high school dropout rates were 7.3% for males and
5.9% for females
– In 2016/2017, women are projected to earn 64.2% of
Associate's degrees, 59.9% of Bachelor's degrees, 62.9%
of Master's degrees, and 55.5% of Doctorates
• Access to health care services and health insurance are
critical benefits for women
• The mother generally controls health care for the family
• Employers wanting to retain and attract skilled
employees will look at health insurance as a necessity
• As more women have health insurance, demand for
primary care services will exceed current levels
National Center for Education Statistics: http://nces.ed.gov/programs/digest/d07/tables/dt07_258.asp
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Staff Costs and General Operational Costs
Are Increasing
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
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Contractual Adjustments Are Increasing
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
What Will the Future Healthcare Environment
Look Like?
• Total healthcare costs will continue to increase, but at a
reduce rate of change
• Practice operating expenses will continue to increase at a
greater rate than any increase in payment
• The percent of patients with Medicare and Medicaid will
increase
• The shortage of primary care and specialty providers will get
worse
• Businesses will accommodate the needs of a larger female
workforce
• Each of these will impact physicians and provide an
opportunity for organizations who are prepared to act
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objective 2
Describe the issues that will affect
healthcare in the future
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The Affordable Care Act Is Changing
Healthcare Financing
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Technology Will Change Healthcare In Ways
We Cannot Imagine
Patient Room 2020 by NXT Health
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The hospital room of the future
by Eric J. Topol, MD, Director
of Scripps Translational
Science Institute
Some Change Is Already Happening
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“Start Trek” Medicine Is Coming
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Consumer Products Will Replace Medical
Telemetry
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Telemetry Will Collect Terabytes of Data
Google Smart Contact Lens
One reading per second X 60 seconds X 60 minutes X 24 hours =
86,400 readings per day and 31,536,000 readings per year
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Understanding the Human Genome Will
Enable True Personalized Medicine
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Care Will Have Multiple Delivery Points
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Payment Will Reward Outcomes and Patient
Experience Not Just the Volume of Service
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Quality Will Be Guaranteed
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Learning Objective 3
Describe how you can prepare your
practice to succeed now and tomorrow
Copyright 2014 Medical Group Management Association® (MGMA®). All rights reserved.
How Medical Practice Administrators Rate
Their Current Challenges
MGMA 2014 Medical Practice Management Today Research
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
What You Do Today Will Determine Your
Future
Good management is more important than ever
1. Know your revenue and costs
2. Know what you cost the insurer
3. Optimize use of technology to increase efficiency and
improve quality
4. Know your quality metrics
5. Analyze payer contracts
6. Deliver a better patient experience
7. Prepare for new payment mechanisms
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Know Your Practice’s Revenue and Costs
1. Benchmark your group’s financial performance
2. Evaluate the revenue cycle of the practice and for individual
payers
• Total Accounts Receivable
• Mean Payment per Total RVU
• Mean Days from Billing to Payment
• Percent of Rejected Claims or with Adjusted Payment
2. Evaluate costs in the context of improving productivity and
profit
3. Study workflow to increase practice efficiency
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Know What You Cost
1. Analyze the cost (to the insurance company and patient)
per procedure and per case
• Track the days of hospitalization by DRG
• Know the cost of infused chemotherapy drugs
• Know the cost of prescribed drugs and their generic
equivalents
• Know the cost of surgical implants
• Know the cost of referrals to specialists
2. Be able to describe your costs to insurers, ACOs, and
capitated practices who accept professional service risk
3. Multispecialty practices should be prepared for global
payment contracts
4. Specialists should be prepared for bundled payment and
requests to “subcap” services
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Implement Technology
1. Implement and optimize use of an electronic health record
(EHR) to qualify for the Health Information Technology for
Economic and Clinical Health (HITECH) Act “meaningful
use” incentive
2. Utilize your EHR to implement patient population quality
measures such as chronic disease registries
3. Utilize your EHR to track the appropriate patient experience
and quality measures proposed for Accountable Care
Organizations
4. Exchange clinical information with other practices and
hospitals
5. Adopt clinical and administrative technologies to improve
patient care and service
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Know Your Quality Measures
1. Access measures (e.g., waiting times, 3rd next available
appointment)
2. Process measures (e.g., HbA1c testing (2X) annually)
3. Clinical outcome measures (e.g., HbA1c in poor control)
4. Patient experience measures (e.g., CAHPS patient
experience survey, patient satisfaction survey)
5. Patient safety measures (e.g., patient falls, catheter
associated UTI)
6. Preventive health measures (e.g., influenza immunization
rate, blood pressure measurement)
7. Utilization measures (e.g., 30-day hospital readmissions
emergency room use)
8. Patient reported health outcome measures (e.g., SF 12
health status questionnaire)
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Analyze Payer Contracts
Commercial Fee-for Service Payer Analysis
Payer
Payer A
Payer B
Payer C
Payer D
Average
Percent of
Mean Days
Total Gross Mean $ per from Billing to
Charges
Total RVU
Payment
13.4%
$51.40
16.5
4.7%
$61.12
14.6
21.1%
$46.22
18.0
6.8%
$52.10
12.8
---------------------------------11.5%
$52.71
15.5
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Percent of
Claims with
Adjusted
Payment
3.2%
3.6%
4.5%
2.1%
-----------3.4%
Deliver a Better Patient Experience
1. Use your EHR to assess quality of care and to schedule
preventive services for individual patients
2. Implement patient registries to evaluate surgical
outcomes, treatment protocols, and the health status of
patients with chronic disease
3. Improve access by extending hours
4. Implement electronic communications with patients,
hospitals and other providers
5. Expand patient education to include activity and nutrition
counseling.
6. Engage patients to accept personal responsibility for
their care
7. Evaluate being a Patient Centered Medical Home
(PCMH) or “PCMH Neighbor”
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Prepare for New Payment Mechanisms
1. Shared Savings, Bundled Payment and Global Payment
methods make physicians and hospitals, not insurance
companies or CMS, accountable for quality and utilization
(efficiency/cost)
• Rewards coordination of clinical care among providers
• Assesses the quality of healthcare to include patient
experience, outcomes, and health status
• Rewards outcomes not the volume of services
• Incentives are designed to encourage providers to
deliver efficient and quality care
2. Evaluate your systems for your ability to provide better
quality, lower cost care
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
In the Future, the Successful Practice Will
Balance Value and Costs
• Both financial and nonfinancial metrics are
needed
• Quality and patient
experience metrics will be
the basis for payment
• The practice’s information
system will need to
aggregate data from
multiple sources and time
periods
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Quality
Revenue
Satisfaction
36
Medical Groups Need the “Right Stuff”
The future competitive environment of accountable care will
reward practices who have:
• Lower utilization
• Better quality
• Better patient satisfaction
• Better patient outcomes
• Lower cost to the insurer
Which are the same factors that enable a practice to thrive in
today’s fee-for-service payment system
Good management will make the difference
37
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Who Will Succeed in the Future?
It is not the strongest of the species that survive, nor the
most intelligent, but the one most responsive to change.
Charles Darwin
It is not necessary to change. Survival is not mandatory.
W. Edwards Deming
We are confronted with insurmountable opportunities.
Walt Kelly
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Are there any questions?
David N. Gans, MSHA, FACMPE
Senior Fellow Industry Affairs
MGMA
dgans@mgma.org
303.799.1111 x1270
Copyright 2014 Medical Group Management Association® (MGMA®). All rights reserved.
About MGMA
Since 1926 the Medical Group Management Association
(MGMA) has been the leading association for medical practice
administrators and executives. MGMA assists practices improve
performance with education, advocacy, networking opportunities,
and robust performance information. Through its industry-leading
ACMPE Board Certification and Fellowship programs, MGMA
advances the profession of medical practice management.
Through its national membership and 50 state affiliates, MGMA
represents more than 33,000 medical practice administrators
and executives in practices of all sizes, types, structures and
specialties. MGMA is headquartered in Englewood, Colo., with a
Government Affairs office in Washington, D.C.
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Biographical Summary
Mr. Gans is a national authority on medical practice operations, patient safety,
quality, payment methodologies, and health systems organization. He advises the
Medical Group Management Association staff and members on all areas of medical
group practice, sharing expertise through personal communications, workgroups,
presentations, webinars, member community postings, and journal articles.
Mr. Gans received his Bachelor of Arts degree in Government from the University of
Notre Dame, a Masters of Science degree in Education from the University of
Southern California, and a Master of Science in Health Administration degree from
the University of Colorado. Mr. Gans retired from the United States Army Medical
Service Corps in the grade of Colonel, U.S. Army Reserve, is a Certified Medical
Practice Executive and a Fellow in the American College of Medical Practice
Executives.
Address: MGMA, 104 Inverness Terrace East, Englewood, CO 80112
Phone:
(303) 799-1111, ext. 1270
E-mail:
dgans@mgma.org
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.