By Kathy Jordan, CEO and Founder, and Regina Levison, Vice President, Jordan Search Consultants
The Affordable Care Act added 20,000,000 people to the healthcare system — and data collection, reporting, and compliance requirements designed to track the overall health of populations. It called for an increased coordination of care and specific efficiencies within the system. This was great news for the previously uninsured and current patients, but created a significant administrative burden for physicians and other healthcare providers.
In this new environment, we saw many physicians opting out of traditional private practice in favor of becoming an employed physician at a hospital system. With the recent election, the healthcare conversation is sure to change; the President has promised to repeal the Affordable Care Act.
Whether or not there are dramatic shifts in the healthcare climate, one fact remains: physicians value their autonomy. Perhaps that is why we are beginning to see the pendulum swing back — not towards traditional hang-a-shingle private practice environments, but towards a supported private practice model as a member of an IPA. The IPA Association of America (TIPAAA) reports it represents more than 300,000 physicians associated with IPAs, physicians who have joined to leverage shared data, implement administrative efficiencies, trim unnecessary costs, and benefit from economies of scale.
At Jordan Search Consultants, our IPA client list is growing because IPAs are expanding; they engage us to work with their member groups to grow strategically and recruit the right providers in the right specialties at the right time. With a refurbished private practice model on the rise, we sought out three industry experts to see if this was, in fact, the case, as well as what it could mean for population health, physicians, and the overall healthcare landscape. To shed some light on the future of independent practice, we spoke with:
Q: What are the top challenges faced by physicians choosing to remaining independent?
Kronlund: Private practices won’t survive if they are not part of an integrated entity. Our group started with 375 members and we now have over 1,000 providers; IPAs are growing. The top challenges independent physicians face are:
Private practice is not dead and gone — I believe that the best days for private practice are still ahead of us.
Wiggs: This is specialty- and geographic-specific but, across the board, independent physicians are challenged by access to competent and consistent staff, improved business practices (leadership, financial performance, and accounts receivable management), meeting regulatory expectations, cost for everything including technology, staff, drug supplies/pharma costs, and the payer/employer market.
Sadowy: Declining reimbursements (soon to be exacerbated by the Medicare Access and CHIP Reauthorization Act (MACRA) and private insurers quickly shifting to value-based payments and risk sharing), the burden of keeping up with new disruptive technologies that demand changes in practice style, the costly administrative burdens of meeting regulations, and the increasing cost of doing business are primary challenges for independent physicians. In the past few years, we’ve seen the rapid transformation of the healthcare system, a move towards more clinically-integrated care, and a movement towards physician employment. Heaped onto the current challenges is the uncertainty of what’s coming next under a Trump administration. Might be good or not.
Q: What support services do independent physicians need to prioritize?
Kronlund: Reporting. The current healthcare environment demands accurate and timely reporting from a variety of perspectives: e.g., clinical quality, patient access, and Meaningful Use, just to name a few. These physicians need the people and infrastructure in place to collect and report this data in the right ways. Providers, administrators … we are all in service to a population now and we are being held accountable.
Wiggs: Everything that challenges them is a support service they must prioritize. In addition, they respond to support with payer contracting, coordination of care resources (patient care delivery, reducing redundancy, testing, authorization, and continuum of care resources), and coordination of who sees what patient when and under what conditions.
Sadowy: Independent physicians need to prioritize getting paid for the services they provide which involves accurate billing and coding as well as the skillful use of EMRs and other technologies that can help them manage their practices. Under MACRA they will begin to face new reimbursement methods that could require practicing population based medicine, greater reporting of quality measures, and new challenges to revenue cycle management.
Q: How are IPAs positioned to ensure physicians remain independent?
Kronlund: First of all, private practitioners must realize they need to be part of a clinically-integrated community of providers in order to remain relevant in the market place. As many of our participating providers age out, IPAs must recruit physicians who are committed to staying in private practice, but also committed to navigating this new era of healthcare. Hospital acquisition seems to have slowed down some, so now is a really good time for IPAs.
Wiggs: Private practices can be autonomous but can no longer be independent. Today’s independent physicians need operational support to ensure sustainability and growth. I’ve been in this business for almost four decades; it used to take three days to train a receptionist and now it takes three months. No solo practitioner can afford to get this kind of competent staff up and running.
Sadowy: For the most part, many IPAs are still mainly focused on payor contracting which is their bread and butter activity. Many are not in the business of providing services independent physicians will require for healthcare transformation. Some IPAs have built MSOs to provide a broader range of services and/or have helped their physicians create ACOs, PPMCs, and other types of new healthcare reform organizations for their physicians to participate in shared savings and other financial incentive programs. Given the selection of Tom Price, MD as Secretary of Health and Human Services, under the Trump administration, IPAs may face less pressure for transformation and be able to refocus on their main mission — negotiating and contracting with payors on behalf of their independent physicians.
Q: How are IPAs educating their member groups/physicians/developing leaders?
Kronlund: IPAs invest in resources and training—not traditional hospital committee meetings. At Northwest Physicians Network, we have a proactive engagement program; we hire practice advocates who work directly with the physicians to help them develop their practices. We also complement our physician outreach efforts by engaging our practice managers group that meets twice a year and also an advisory group of office managers. It is about education and support, filling the care gaps, and collecting metrics.
Wiggs: IPAs teach independent physicians about improved business practices. There are expectations set for performance and member physicians are held accountable. IPAs are no longer the default — the place you go when you don’t want to think about things anymore. IPAs are the place to learn about, and implement, cost-effective solutions.
Sadowy: IPAs go about this a little more informally through networking, annual meetings, board retreats, CME training, leadership councils, and other leadership training opportunities — if they offer these services at all.
Q: Do you feel that IPAs are improving the overall health of populations?
Kronlund: The level of engagement in IPAs is different than in a vertically-integrated organization. Usually, independent providers are hungrier and more committed to better service which leads to a better experience for the patient, a more positive attitude towards healthcare, and an increased willingness to engage, all of which leads to better overall health. IPAs are also able to provide innovative resources to be shared amongst the physicians. For example, we had a technology firm build a custom patient health analytics program and make it available to our members at an affordable rate.
We also offer depression screenings for seniors and a lot of telemedicine solutions; through economies of scale we can make this happen for our members — and their patients benefit. Right now, 40 practices within our IPA are engaged in a practice performance improvement project — things that benefit patients but that they wouldn’t have access to at a hospital or on their own.
Wiggs: With the resources of a group, independent physicians can definitely reduce errors in data collection and put processes in place for care improvement.
Sadowy: It largely depends on local marketplace and the demands the prominent payors place on IPAs. In other words, it depends on the nature of the contracts IPAs negotiate and sign with major payors. Physicians in IPAs need to meet the payor contract requirements. If payors require or incentivize physicians to practice evidence-based medicine, engage in population health, or participate in various pay for performance approaches then IPA physicians will be engaged in these activities. Some IPAs are ahead of the curve and are proactive in seeking out contracts that meet the triple aim improving the health of populations by providing what their physicians need to be successful. For the most part, many IPAs seek to deliver contracts that try to shelter their physicians from having to make major changes in practice style. The 2016 Survey of America’s Physicians bears this out citing the majority of physicians remain in a fee-for-service world and are not sufficiently engaged in, or supportive of, the current mechanisms of healthcare reform. IPAs have evolved over time to meet the demands of the marketplace and will continue to do so. We don’t know the challenges that await them under the Trump administration but it will be interesting to witness their evolution.
Q: In 2008, the Institute for Healthcare Improvement (IHI) announced the Triple Aim which advocates simultaneous improvements in patient experiences, improved population health, and lower cost per capita. It is likely that much of the Affordable Care Act was influenced by IHI’s positions. How do IPAs address the triple aim?
Kronlund: IPAs work hard to give people the appropriate level of care at the best price. We work on site of service care so patients don’t have to go to a hospital to receive high-quality ambulatory services. We work with 40 imaging centers and 40 ambulatory centers to make things more convenient, accessible, and affordable. In addition, because we are sharing resources, we can take on large-scale initiatives to improve practice management which directly impacts the patient experience.
Wiggs: Many surveys have found 80 percent of physicians report being overextended or at capacity, with no time to see additional patients. Not surprisingly, 54 percent of physicians rate their morale as somewhat or very negative, with 49 percent saying they are either often or always feeling burnt out. IPAs provide resources to mitigate this. And when providers feel less burdened, they can focus on the patient, the patient experience improves, and they are more willing to listen and engage in preventative and proactive measures. Members of IPAs are more engaged with patients because they have the time to be. We cannot make populations healthier but we can reduce population illness with improved continuum of care processes.
Sadowy: Physicians are undoubtedly overwhelmed by the numerous challenges they face — no matter what the new administration decides to do, the daily administrative burdens physicians face is not going anywhere. I believe ACOs, more than IPAs, are focused on addressing these goals. A recent study published in Health Affairs, August 2016 indicates about one in four primary care physicians participate in ACOs. The 2016 Survey of America’s Physicians has the participation rate among physicians at more than one in three. Regardless, the participation rate of physicians in ACOs has increased greatly since their inception and will continue unless that portion of the ACA governing ACOs is repealed and replaced by the new administration in Washington. Even if this occurs it will take time to unwind and commercial ACOs may still persist and grow despite government retrenchment from this model of healthcare reform.
Q: Have you seen an increased interest in IPAs?
Kronlund: Yes. The marketplace is too complex for private practice physicians to survive on their own — they need help synthesizing data and responding; they need support so they can be flexible in this ever-changing environment.
Wiggs: In some markets; there are so many geographic variables that drive whether an IPA makes sense in a particular community or region. I have seen an increased interest in IPAs due to one major health system gobbling up practices and those physicians who are not interested in an employment model are uncomfortable with complete independence. In other markets, the payers or employers are driving the expectations for care coordination that make it difficult for physicians to remain completely autonomous, and that is a great opportunity for IPA development and growth. In addition, there are a few emerging markets where a health system is promoting an IPA model for regional physicians as an alternative to being employed by the system. Since 30 to 40 percent of new physicians entering practice each year would prefer a non-employment model, any one of these IPA models is a great way to promote a more autonomous practice opportunity.
Sadowy: If the new administration slows down the rate of healthcare transformation or moves in a different market-oriented direction which is quite likely, I think there will be a resurgence of IPAs — IPAs as they were initially intended — as a contracting conduit with health plans rather than a harbinger for healthcare reform.
Q: Do you see the cost curve bending?
Kronlund: We are seeing some equilibration in terms of income. Private practice physicians, when they are a part of an IPA, are now poised to make more than employed physicians. Hospitals are not able to sustain the levels of compensation they have been giving, and we have already started to see that level out.
But you also have to consider the cost savings private practice physicians experience when they join an IPA. They leverage their costs more effectively and we are able to negotiate a higher fee schedule for them. The cost of running a practice continues to rise and we help to make this manageable.
Wiggs: IPAs can be better at managing some costs than solo physicians or small groups, but the cost curve won’t bend dramatically until influencing elements within the pharma and health insurance industries change. We also need to see professional liability and tort reform changes, and a significant shift in the patient accountability mindset in order for the cost curve to truly bend.
Sadowy: I believe the solo, independent physician cannot survive in the current healthcare environment; it is not a cost-effective way to do business anymore. In some parts of the country independent physicians make more than employed physicians but do so by seeing more patients and in other markets the reverse is true. What we do know from recent surveys of physicians is that, on average, employed physicians see fewer patients and make more money and that younger physicians aren’t even considering solo practice or private practice. The new administration’s healthcare reform could change all of this by slowing down the rate of healthcare transformation and empowering physicians and their IPAs to focus on patient-centered healthcare.
Ask any physician and he or she will tell you that their administrative tasks have increased significantly since The Affordable Care Act was signed. Even if the Trump administration repeals the Affordable Care Act, the focus on clinically-integrated care still requires significant data collection and reporting, and other administrative tasks. Management of EHRs and the increased sophistication required of office staff make practicing as a truly independent physician next to impossible.
Although many providers choose hospital employment to relieve them of these burdens, IPAs are gaining traction in the marketplace. IPAs can eliminate the isolation, headaches, risk, and expense associated with independent private practice while preserving an autonomous and entrepreneurial spirit. In addition, IPAs can provide top-tier administrative support, clinical autonomy, streamlined processes, enhanced contracting, collaboration, affiliation strategies, and cost savings. As the healthcare environment continues to evolve, IPAs are on a path for growth.
About The Authors
Kathy Jordan is the CEO and Founder of Jordan Search Consultants and Regina Levison is the organization’s Vice President of Client Development. Jordan Search Consultants, an executive, healthcare, and higher education recruitment firm, was founded in 2003. The organization offers executive and physician search services to hospitals/integrated delivery systems, medical groups, academic institutions, IPAs, ACOs, HMOs, health plans, hospice/palliative medicine organizations, and community health centers. For more, visit www.jordansc.com, call 866-750-7231, or email firstname.lastname@example.org