	The DOW is up. Unemployment is at an all-time low. 

 According to an American Medical Association 

, that’s due in part to the healthcare industry. In fact, 

for creating and supporting 12.6 million jobs and generating $2.3 trillion in economic activity.

	Most people wouldn’t expect healthcare’s economic impact to be that great, says Richard C. Johnston, MD, FACP, chief executive officer and chief physician officer at USMD Healthcare in Dallas. Johnston says a busy internist might account for $1 to $1.3 million dollars to a hospital’s revenues and some specialties, like orthopedics, are way higher. “But to actually think about the number of employees, payroll, taxes and other downstream revenue, this is the first time we’ve seen that presented,” says Johnston.

Top 5 locations physician salaries are declining

	The study broke down the data by region and measured the overall economic impact of physicians by four qualifiers:

	·      The number of jobs the average physician supports: 17.1

	·      Total economic output per physician: $3.2 million

	·      Dollar amount contributed to workers per physician: $1.4 million

	·      Tax revenue per physician: $129,000

	Johnston says the numbers first reflect how much healthcare means to the economy, and how cautious we must be when making dramatic changes in anything that affects healthcare economics. Also,

 that physicians, such as primary care doctors

, account for so much revenue to the economy that they should be good stewards of how they handle that in terms of trying to lower the cost of healthcare.

	“In terms of the future of the industry, there’s clearly a primary care shortage in the country, maybe 50, 000,” says Johnston. “Right now because of full employment in the country, just like in the 90s when the economy is really roaring, a lot of people who would migrate into healthcare because there are always jobs there, go out and get jobs in industry, so we are struggling to keep up with turnover.” 

	As the population ages, that too will strain the system in terms of primary care, geriatric providers, nursing home workers and home health aide shortages.  Who will be willing to work those positions, what will the pay and benefits be?

	The report also pointed out that doctors generate more economic output, produce more jobs and pay more in wages and benefits than many other professionals, including those working in higher education, legal services and home health.

	“You can say we [the U.S.] are the best in terms of healthcare research and technical point of view, but from efficiency and cost of delivery we’re one of the worst as far as the wealthy countries,” says Kate Tulenko, MD, CEO of Corvus Health, a global health workforce firm, and a practicing pediatrician, in Virginia.

	Tulenko points out that it may cost $5,000 to do a hip replacement in Spain, and $50,000 in the U.S. “Part of that is for every physician, it takes like seven billers and coders to do the billing and insurance paperwork.” “It’s feeding a bureaucracy.”

	If we want to see growth and growth in healthcare, we want to see people actually delivering care, Tulenko notes. Currently the U.S. spends 17 percent of GDP on healthcare, she says, so if say, 20 percent [an example figure] of that goes to administration, imagine instead, if it were redirected to care.

	Rather than a proliferation of billers and coders, people were physical therapists, nurses and medical care workers. “There is no doubt, despite what some people tell you, that there is an unmet healthcare need in the U.S., says Tulenko. “Not everyone in the United States who needs healthcare is getting it.”

	“You do need people reviewing insurance claims, no doubt about that, to prevent fraud, and you also need data to do analysis and learn things from, but it’s gotten out of control in the U.S.,” Tulenko says.

	Johnston says we have a crazy cost structure in healthcare where even in this country a hip replacement can cost all-in $10,000-12,000 in one place and $70,000 at another. “It’s stuff like that that makes no sense.” In the pharmaceutical industry, he says, where one drug in a class can cost $500 a month and a generic can cost $40 a month, or where cancer drugs starts at $100,000 per year-“we can’t keep doing that.”

	Both Johnston and Tulenko agree the healthcare industry will experience continued growth, but that shortage on primary care physicians, and senior care specialties will likely continue.

	“Healthcare will still be the largest employer because the population is aging and you’ll need more assets, but more will have to be directed into appropriate settings, and for example, maybe fifty percent of surgeries done in hospitals should be done in an ambulatory surgery center and a lot of the procedures done in an ambulatory surgery center should be done in an office setting, so that sort of stuff is going to have change,” says Johnston.

Articles

The economy is going gangbusters. According to an American Medical Association report, that's due in part to the healthcare industry.

Healthcare is going gangbusters for the economy

	Last year, Cleveland Clinic announced it was expanding its telemedicine program to 24 states outside its Ohio headquarters, signifying a growing trend. More hospitals and health systems are expanding their online patient visits into other markets.

	But experts note that just because a patient living outside Ohio can see a physician from the Cleveland Clinic, doesn’t mean they will. Rather than presenting a challenge to small medical practices, it can present an opportunity.

This article appears in the 4/10/18 issue of Medical Economics.

	“I, personally, would prefer to see my own primary care physician via telemedicine rather than meeting a new physician and working with them via telemedicine,” says Kristi Fahy, manager of informatics, information governance and standards at the American Health Information Management Association.“Fostering ongoing patient loyalty can be seen as a driver to encourage small physician groups to consider implementing telemedicine.”

	Fahy adds that telemedicine extends to connecting patients  with specialists. Some patients may have to travel long distances for a referral or don’t have the option of choosing preferred specialists based on where they live. Through their primary care provider’s telemedicine connection, however, they can visit a familiar, nearby office and have a customized telemedicine consultation encounter with a specialist of choice and with their trusted primary care doctor in the room.

	“That small practice physician continues to stay involved in the patient care path through telemedicine,” she says. “These patients can more easily keep up with follow-up visits and hopefully keep up with their medication needs through the physician they are loyal to already.”

	Providing telehealth access not only makes a smaller practice more competitive, Fahy says, it can also increase revenue. This can include seeing more patients online and in the practice as well as taking advantage of numerous reimbursement opportunities from government and private payers. This year, Fahy notes, Medicare has 96 codes for telehealth-related payments.

	However, like any technological tool available to practices, telehealth must have a focus for the medical practice before implementation, including identifying ways to integrate its use into the practice. 

	Neha Sachdeva, a director at consultancy KPMG’s advisory healthcare and life sciences practice, says physicians need to first “identify the ‘why’” when implementing telehealth services. This includes the purposes for adoption, asking if it makes sense for the business, and how it can benefit both patients and the practice.

	A thorough analysis of how telehealth will keep the practice competitive is critical. This includes taking a hard look at costs to implement the program and what reimbursement opportunities it opens up. 

	“Telemedicine isn’t a silver bullet to solve all physician problems,” Sachdeva says. “It shouldn’t be the only option to help remediate all the challenges to [patient] access or financial challenges.”

	Like Fahy, Sachdeva sees a well-implemented telehealth program as a competitive edge for small practices. As regulatory and reimbursement challenges are reduced, telemedicine will have the opportunity to become more of the norm than the exception in care delivery.

	“You also have an evolving patient population, used to doing everything on a smart device or online in all other aspects of their day-to-day activities,” she says. “Patients will start to shop around … so I think telemedicine helps organizations remain competitive and provides a service to help them not only retain patients, but acquire new patients as well.” 

Rather than presenting a challenge to small medical practices, telemedicine can present an opportunity.

Telehealth as a competitive edge, not a competitor's advantage

	
	The first step is to remove the physician from the day-to-day denials-management process. Physicians around the world are already spending too much time behind a computer screen. A study published in the Annals of Internal Medicine found physicians spend a significant part of their day not treating patients, but instead completing other tasks. These physicians spent approximately 27 percent of their time in face-to-face clinical contact with patients, while spending up to four hours on “desk work” for every one hour treating patients. This study had a somewhat small sample size, but it’s easy to see that as contracting and billing grows more complex, physicians may spend more time with a computer and less with patients.

From the 4/10/18 issue of Medical Economics.

Top 8 worst administrative hassles according to physicians

	Whether the billing experts are members of the practice or external experts, physicians who hand off the denials management process increase the time they can spend with patients, and can improve productivity and boost revenue by allowing experts to take control of the process.

	
	Artificial intelligence (AI) is all over the news today, often classified as a savior to business or the end of the workplace as we know it. The truth, like anything, is somewhere in between. AI, like other technologies, is a tool that can be used to increase productivity and efficiency. For providers, AI’s older sibling, automation, can be used to decrease, or even eliminate, denials.

	As a business practice, automation can be used to enhance the provider’s office staff. An automated denials management solution can increase efficiency by allowing staff to focus on other issues that require resolution. 

	A well-thought-out automated denials management solution actually starts long before any claim is denied. To whittle away at the 90 percent of denials that are avoidable, the process should begin early. 

	Attacking denied claims in advance, before they happen, is the objective. This allows providers the opportunity to chip away at that 90 percent. While there are many ways to affect this number, here are three important tactics to start with:

	Patient eligibility should be high on the provider checklist. Checking patient eligibility in advance ensures that patients have insurance to cover the treatment. 

	The claim itself must be clean: treatment codes, which change over time, must be kept up-to-date. 

	No matter how much effort is expended verifying eligibility and checking claims, some will be denied. But even this event has a positive outcome: Practices can understand and identify the common reasons for denials, which will help prevent them in the future. 

	Automating this portion of the revenue cycle management process can provide exceptional value to providers as the process also influences the more than 50 percent of denied claims that are never resubmitted to payers. The best solutions examine current and retroactive denials to ensure the practice receives all the reimbursement it deserves, which helps ensures providers get on the right side of that 90 percent. 

Denials continue to frustrate medical practices. That’s why focusing on the 90 percent that are avoidable is  important. That’s where the hidden revenue lies. 

Improve your claim denial management

	While the availability and use of telemedicine services is increasing annually, healthcare providers engaged in providing telemedicine services must carefully navigate numerous regulatory obstacles. Failure to abide by applicable laws may jeopardize the licensure of the healthcare provider, result in monetary fines and penalties, and increase potential exposure to medical malpractice claims.

	Licensure presents the most obvious obstacle to the growth of telemedicine services, as state laws governing the provision of telemedicine services differ widely. Generally, healthcare providers are required to be licensed in the state in which the patient receiving the services is located. Certain states, like Texas, offer a special license for the provision of certain types of telemedicine services. 

	Other states, such as California, allow for limited consultations by out-of-state practitioners without licensure. In evaluating the licensure requirements for the provision of telemedicine services in any state, healthcare providers need to carefully consider the nature and frequency of the services they will provide. For clinicians rendering telemedicine services in multiple states, this can be a time-consuming and costly endeavor.

	Obtaining multi-state licensure is only part of the challenge for providers, however. Healthcare providers practicing telemedicine in multiple states are also required to adhere to the standards of medical practice in each state, and state standards of practice vary considerably. For example, in Colorado, the practice of medicine is defined broadly and encompasses telemedicine.

	To guide physicians, the Colorado Medical Board has issued a rule for the appropriate use of telehealth technologies in the practice of medicine. However, other states have considerably less guidance available or have not issued any unique laws or regulations concerning telemedicine services. 

	Adding to the complexity, there is no one location for a provider to find the applicable rules. In some states, these rules are found in statutes and regulations. In other states, they may be found in the rules, policies, and procedures of the state licensing boards. 

	Healthcare providers also need to be aware of federal and state laws governing the privacy and security of medical information and ensure the technology they are using complies with applicable laws. In addition, the availability of reimbursement for telemedicine services varies widely from state to state and should be considered when structuring any arrangement for the provision of telemedicine services. The Medicare Anti-Kickback Statute and the Physician Self-Referral law (also known as the Stark law) and similar state laws may also apply to arrangements for telemedicine services. Lastly, the prohibition on the corporate practice of medicine  in certain states may also impact what type of entity may provide telemedicine services.

	While telemedicine services have the potential to offer significant benefits to the general population, the government, and the healthcare industry through reduced costs and increased access to care, the technology is advancing at a faster pace than the law. 

	Marcie M. Damisch, JD, LLM, is a shareholder in Stradling’s Corporate practice group. Her practice is focused on the representation of healthcare providers and related entities. 

Healthcare providers engaged in providing telemedicine services must carefully navigate numerous regulatory obstacles.

Telemedicine licensure and related challenges for physicians

	When patients contacted her via social media Tisha Rowe, MD, MBA, used to respond to them. But when the Houston, Texas-based primary care physician found that the messages kept coming, she knew something had to change. “A lot of people would reach out to me and say, “Can you answer this question?’” she says. “I thought, ‘Wait a minute. I’m working, and I’m not getting paid for it.”

	In 2014, no one was really discussing telemedicine, she says. So she looked into implementing it not just for her own patients, but for others. Today, Rowe is the founder and CEO of RoweDocs, an online network of 75 physicians who offer telemedicine visits to their current patients.

	But even with Rowe’s business background, finding the right vendor wasn’t easy. Vendors would make promises they ultimately couldn’t deliver on.

	The first company had problems in following HIPAA. The second couldn’t bill an insurance company, or verify a patient’s insurance coverage. The third said it was a telemedicine company, but only offered chat communications without video conferencing, Rowe says.

	As Rowe’s experience indicates, finding the right telemedicine vendor can be a challenge. As more practices consider offering telemedicine, both the big picture and the small details matter. Taking a thoughtful approach can help physicians determine which vendor will provide the best fit for  their practices and their patients. 

	Asif Shah Mohammed, MBA, associate principal at ECG Management Consultants, a healthcare management consulting firm, first worked with Greensboro, N.C.-based Cone Health, a six-hospital healthcare system, two years ago. Cone Health contacted ECG after seeing a competitor’s highway billboards offering $50 telemedicine visits. Cone Health wanted to do something similar.

	According to John Jenkins, MD, Cone Health’s senior vice president and chief clinical office for connected care, Cone had three objectives for implementing telemedicine: positioning the company as innovative and transformative, remaining competitive in a market where other companies advertised frequently about their own telemedicine capabilities, and creating a multi-year strategy for entering the digital health world.

	“Spend as much time as possible defining the problem before you look for solutions-that is absolutely critical,” Jenkins advises. “People tend to jump into virtual health, as a way to check the box, rather than thinking about why they need it.” 

	Shah Mohammed says practices need to think about telemedicine as a concept. Know the answers to questions such as “Why do this?”, “How to do it?”, and “How will it affect your brand?” Don’t consider vendors solely by what technology they offer, but instead know what problems the practice is trying to solve with telemedicine integration, such as patient convenience, or staying competitive in the market.

HOT TOPIC: Physicians face punishment for speaking out about non-physician care

	Once a practice understands why it wants to implement telemedicine, Shah Mohammed notes that finding a third-party planner can help a practice select potential vendors, though it’s certainly possible for a practice to make the decision on its own. The potential to get bogged down by the number of vendors and what they offer, however, can be minimized by using an outside consultant.

	Shah also cites branding as a consideration   when implementing telemedicine. “It’s common to have something indicating that the system is ‘powered by XYZ vendor,’” says Shah Mohammed. Is it important for the practice to offer its own telemedicine technology directly on its own website, for example, or would the practice prefer to send its patients to a third-party website or vendor app? And if the vendor’s website or app is what the practice will use, would the patient be able to tell the difference, or will it appear as if the software  comes from the practice itself?   

	Using its own branded telemedicine site has its advantages, notes Shah Mohammed. ”From a patient perspective, they will continue to stay within the practice’s ecosystem,” which helps keep the patient connected to the practice, indicates that the practice is innovative, and maintains the patient’s familiarity with the practice they already know, he says. It also keeps patients from potentially leaving the practice’s website and not returning. 

	The disadvantages of a branded site are that if the patient has a bad experience with the platform, even if it is a vendor issue, the patient will associate that experience with the practice itself, Shah Mohammed says. Other critical questions include:

	If the practice is relying on smartphone apps to connect with patients, will the vendor be able to support patients who use both iPhones and Android devices? 

	Can the vendor work with the practice to individualize what it offers for each practice, or is it a more universal system? 

	How does the vendor provide training  so that the practice physicians understand how the telemedicine system operates? How quickly will they offer patients access to the provider? 

	Without implementing feedback from patients on how telemedicine should work, it’s possible patients won’t stick around long enough to use the system for an extended period, says Shah Mohammed. His client, Cone Health, used patient feedback it obtained through surveys and follow-up phone calls to improve the process.

	Ultimately, Cone Health saw more growth than all its competitors saw in the prior three years because their telemedicine vendor provided the whole experience, he says. “As a result, repeat patients would say, ‘If I hadn’t been able to do this video visit, I would have gone to the ER,’” he says.

	Rowe says practices should ask vendors for a 30-day trial period, to ensure that the vendor can actually provide the services it says it can offer. Also, when a vendor offers customer support, ensure it is available during extended hours or over the weekend, “not during the time you plan on seeing patients,” she says.

	Other points to consider: use a vendor with a physician support line that is separate from what patients use for support, and confirm that a vendor’s software can verify insurance, as well as send and receive prescriptions and labs directly, Rowe says.

	The experience helped Rowe develop RoweDocs to serve as an implementation manager for practices who want to incorporate telemedicine. 

	“Don’t just try to put the tech in and think it will magically work without doing the work,” she says. “What makes each tech vendor different isn’t that much, but it’s what you do with the technology that is important.” 

As more practices consider offering telemedicine, both the big picture and the small details matter. 

How to select the right telemedicine vendor

	Saving for college is one thing, but making the most out of those savings is something else entirely. Fortunately, there are concrete steps physicians can take to make sure they stretch those education dollars.

	How early should you develop a plan? Ideally, start making financial adjustments when your child enters middle school. But even if your college-bound child is already in their senior year of high school, there are still strategies to reduce their college costs and decrease their Estimated Family Contribution (EFC).

	Let’s start with some of the short-term strategies that everyone can take advantage of-like what funds to use to pay for college costs.

	One mistake parents sometimes make is to pay all of their college costs out of their 529s. Why is this bad? Because doing this may make some parents ineligible for the American Opportunity Tax credit, which taxpayers can claim for the first four years of higher education tuition, course materials (such as books), and required fees. The credit is worth up to $2,500 per year based on adjusted gross income.

	Since you’ve already received a tax benefit with the tax-free distribution from your 529, the government says you can’t “double-dip” and also claim the $2,500 American Opportunity Tax credit. You can use one or the other, but not both. Your tax adviser can work with you to figure out how to use your 529 funds in a way that will help you take advantage of this credit. 

	If a grandparent gives your child money for college, even if it’s under the $14,000 cap of what the IRS considers a tax-free gift, that money can still cost you and your child. 

	That’s because of how FAFSA (Free Application for Federal Student Aid) rules determine income. Any money a grandparent gives a student over the income protection allowance of $6,570 is assessed as untaxed student income at 50 cents on the dollar. That’s regardless of whether the grandparent gives the money directly to the child or sends a payment to the school to cover tuition. 

	How much could that cost you? A $16,300 gift from grandma for the benefit of the child raises the family’s EFC by $5,000 to $8,000, depending on whether the student has already reached their income protection allowance. That doesn’t mean grandparents shouldn’t help out at all. Some experts suggest waiting until after students are upperclassmen and have filed their last FAFSA before withdrawing money from 529s.

	Thinking of dipping into your retirement fund to pay for college? Think again. Yes, the IRS waives the 10 percent early withdrawal penalty on funds a parent withdraws for college. The FAFSA, on the other hand, calculates that money as added income, usually assessing it at a rate of 47 percent.

	Don’t be fooled into thinking that all schools calculate income in the same way. Federal methodology does not use home equity to determine EFC but institutional methodology does. Know which methods the schools being considered use 

 applying can avoid disappointment when those awards letters arrive.

	Just because your child receives a financial aid award letter from a college doesn’t mean that’s the end of the story. Research how to write an effective appeals letter or consult an experienced college coach, and then appeal that award. The reasons you might appeal an award include changes in family income, unexpected medical expenses, or simply if one school offers your child a more generous financial aid package than another school with a similar program and selectivity.

	As for long-term strategies, look first at where you hold your savings. Saving in your child’s name is never a good idea. A child’s income is assessed at a higher rate than their parents-roughly 15 percent to 20 percent higher.

	Where parents hold their own assets makes a difference as well. Physicians will want to hold their assets in their business during the college years. That’s because business assets aren’t used to determine the EFC under the federal methodology as long as your business has fewer than 100 employees. This is not true, however, under the institutional methodology and you will need to talk to a financial expert who understands the rules to sort through everything if you are considering one of those colleges. On the other hand, personal assets are assessed at a rate of 5.64 percent.

	Physicians also should consider restructuring their business. Converting a sole proprietorship to an S Corp or converting a “pass-through income” S Corp into a C Corp will reduce adjusted gross income and increase potential for financial aid. Both an S Corp and a C Corp will provide protection from personal liability. In general, corporations prefer C Corps because they provide more flexibility, including allowing them to have global investors, more than 100 shareholders, and diversity in classes of stock. Small businesses tend to prefer S Corps because profits are taxed only at the shareholder level. C Corps, on the other hand, are taxed at the corporate and again at the shareholder level.

	Both an S Corp and a C Corp will help reduce adjusted gross income, which FAFSA calculates at up to 47 percent. If you’re concerned about limiting your access to cash, remember that FAFSA rules allow business owners to take personal loans from their businesses without penalty. Of course, you’ll want to consult legal and tax professionals before making any changes.

	Finally, don’t discount nepotism. Hiring a spouse or child can help save on your family’s medical costs when you set up a medical reimbursement plan (under IRS Section 105). And your child can earn up to $6,570 per year without having that income assessed under FAFSA rules.

	Of course, rules are often changing. To ensure you make the most of your money, it’s best to consult with a CPA and a college planning expert who will give you the most up-to-date advice on how to stretch your college dollars.

Jim Slowik is the chief college funding strategist of 

, an Illinois-based organization that brings together experts from both the academic and financial services communities who work in coordination to help families find the right college for the right price. Contact him at 

Saving for college is one thing, but making the most out of those savings is something else entirely. 

Vol. 95 No 07

Healthcare is going gangbusters for the economy

Telehealth as a competitive edge, not a competitor's advantage

Improve your claim denial management

Telemedicine licensure and related challenges for physicians

How to select the right telemedicine vendor

How physicians can stretch their college dollars