Top 10 business issues you’ll face in 2013

January 29, 2013

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Top 10 business issues you’ll face in 2013

Efforts to reduce costs, increase efficiencies will challenge you and your colleagues

By Daniel R. Verdon, Group Editor, Primary Care; Lois A. Bowers, MA, Editor-in-Chief; Jeffrey Bendix, MA, Senior Editor; RACHAEL ZIMLICH, Associate Editor; and Diane Sofranec, Contributing Editor

When it comes to the business of healthcare delivery, 2013 undoubtedly will be a year of transition. This month, a slew of provisions will take effect as a result of the Affordable Care Act (ACA), private and public payers will continue to experiment with new payment models, and additional tightening overall will occur to trim healthcare expenditures.

Although policymakers have viewed primary care as “the value” in a system that consumed nearly 18% of the gross domestic product last year, doctors at the ground level will continue to be challenged by reimbursements and the government push to open up access to healthcare. Physician organizations will work toward putting an obese bureaucracy on a diet, but the challenges are daunting:

Although nearly 72% of healthcare providers have implemented an electronic health record (EHR) system, according to the most recent data from the Office of the National Coordinator (ONC) for Health Information Technology, the next push will be to make these systems interoperable.

Pressure to reduce costs will continue, and much of that pressure will be exerted on institutions and other high-cost areas of medicine.

Major hurdles will be experienced as the market moves to implement the International Classification of Diseases, 10th Revision (ICD-10), rules in October 2014. Although the numbers of codes increase substantially to offer a greater level of detail, the number is not the only change. The new terminology of ICD-10 “expands the concepts for injuries, laterality, and other related factors,” according to the American Medical Association (AMA).

Despite these challenges, upside exists for primary care physicians (PCPs). The work this year will be about transitioning, about guiding patients through a fragmented healthcare delivery system, about trying to prevent disease, about limiting intakes to hospitals and emergency departments, about gathering better data about the health of your patient panels, about building new avenues of communication with specialists and hospitals, and about getting paid for the work you do to help facilitate health and wellness for your patients.

Remember that in every great transition, innovation follows. Maybe the economist Theodore Levitt said it best: “The future belongs to people who see possibilities before they become obvious.”

Here is a list of 10 of the top business issues Medical Economics editors, board members, and consultants predict for the next year.

1. Affordable Care act

In January, 10 key provisions of ACA go into effect. Some of the provisions will have a direct effect on doctors, including the launch of the Medicare bundled payment pilot, which aims to evaluate the model for physician services; acute, inpatient hospital services; outpatient hospital services; and post-acute care services for an episode of care. The 10% Medicare bonus for primary care (which took effect in 2011 and expires in 2015) has been tempered by calls for reductions to Medicare reimbursements due to sequestration.

On the other hand, Medicaid reimbursements will be increasing to 100% of Medicare rates, and provisions also will increase payments for Medicaid in states that offer Medicaid coverage with no patient cost-sharing for services recommended (rated A or B) by the U.S. Preventive Services Task Force and recommended immunizations.

When it comes to public payer programs, remember that seniors, two-person families, and low-income families higher incur higher healthcare expenses, according to a recent report by Deloitte Center for Health Solutions. Seniors account for nearly 37% of all healthcare costs yet make up about 13% of the population. The senior population also is expected to grow to 19% of the population by 2030.

Although the ACA implements a tax hike for Medicare Part A on people earning $200,000 a year or for couples earning more than $250,000 filing jointly, it also is giving patients deductions for unreimbursed medical claims.

2. Patient-Centered Medical Homes

The Patient-Centered Medical Home (PCMH) movement is on a fast track to grow even bigger in 2013, 1 year before the ACA fully takes effect.

Because the ACA gives physicians an economic incentive to improve the quality of care they provide, the PCMH model has become even more important for PCPs.

“2013 is really going to be the race to 2014, because that’s when many of the financial rewards for quality, and penalties for lack of quality, are going to kick in,” says Joseph E. Scherger, MD, MPH, vice president of primary care and academic affairs at Eisenhower Medical Center, Rancho Mirage, California, and a member of the Medical Economics Editorial Board. “You’ve got to be moving in this direction or, financially, you’re going to be in a negative spiral.”

The implementation of the ACA also will result in a bigger push for healthcare delivery systems to become accountable care organizations (ACOs), Scherger says. “As healthcare organizations move to be ACOs that deliver high-quality, value-driven care, at an affordable cost, they quickly realize that a PCMH model at the primary care level is very important,” he adds.

For PCPs who are part of a health system that is committed to becoming an ACO, the outlook is good. Practices that remain fee-for-service will have a tough time, however, Scherger predicts.

“The bottom line is, your practice needs to become part of something larger or you’re facing more difficult times ahead,” he says. “Your quality numbers will not measure up if you’re not doing strategic, proactive care. Your reimbursements are going to be threatened.”

Also this year, look for care coordination payments to expand. “That’s going to be very important,” Scherger says. “As long as payment remains at nothing more than fee-for-service, the PCMH model is stymied.”