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Top 10 challenges facing physicians in 2014


Why the major challenges of 2014 are also opportunities for primary care


Every challenge is an opportunity.

And while this list of 10 challenges facing physicians seems daunting and nearly insurmountable for smaller office-based practices, many believe there is tremendous upside for primary care physicians in leading healthcare delivery in the United States in 2014 and beyond. The result could mean more autonomy; it could mean better quality of life for you and your patients, and hopefully result in less interference with the doctor-patient relationship.

But it’s going to take work, management experts say. Physicians will need to reinvent their operations to create efficiencies and thoroughly evaluate the revenue cycle to maximize cash flow. That means you will need to review payer contracts, and look at adopting technology to improve patient care. You may have to re-engineer workloads, workflows and staff responsibilities.

New for 2015: Top 15 Challenges Facing Physicians 

It is this premise that Medical Economics is showcasing with this list of 10 challenges and opportunities facing physicians next year. We believe that understanding the dynamics of a changing market will ultimately help physicians shape it, adapt to it and succeed.

Over the course of this past year, we have learned through interviews and surveys that you find tremendous professional satisfaction from helping patients improve their lives. In fact, it continues to be the reason you entered medicine, and the reason you will stay. At the same time there are trends outside of this relationship that are interfering with your time with patients and continually threatening the economic viability of your practice.

Healthcare is in the throes of great change. And history has shown that large-scale disruption incubates innovation. Our collective opportunity as a healthcare profession is to build a stronger healthcare delivery system rightfully led by primary care that seeks to remain cost conscious, efficient in its delivery, and fairly compensated for helping people attain the most precious commodity of all-a healthy life. 

-Daniel R. Verdon

Challenge #1: Payment for medical services

ACA and changing payment trends

Healthcare’s ailing reimbursement system will likely take a turn for the worse in 2014, before it recovers.

And while 2013’s payment structure seems dehydrated to many physicians because of tighter negotiated payments by health insurers, escalating costs of doing business, and the seemingly endless cascade of bureaucracy tied to payments, some believe relief won’t be felt for the cadre of U.S. physicians in office-based practices for some time.

Why? Healthcare is in the midst of transformational change in the way it is financed. Fifteen of the 16 key provisions of the Affordable Care Act (ACA) will take effect in 2014, and they will most definitely impact the numbers of patients you see and the way you are paid for medical services.

Despite the flawed rollout of the insurance exchanges this fall, coverage for new health insurance enrollees begins on January 1. The new law stipulates that insurance companies cannot drop coverage based on pre-existing conditions. For states that have opted to expand Medicaid, that coverage also begins in January.

While more people are reportedly enrolling in the exchanges, U.S. residents will be required to have qualifying health coverage or face financial penalties. Wellness programs allow employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards. The ACA also creates a 10-state pilot program (by July 1, 2014) to track and monitor successes.

On March 31, the insurance exchanges close for 2014 enrollment, and we will have a barometer to gauge how many newly insured Americans entered the market. Data related to physician payments for services by health insurers will also offer another indicator.

Here are some of the keys to watch for next year.

E-Book Download: 5 Tips to a successful approach to EHR implementation

The narrow networks squeeze

Payers are consolidating networks and repositioning in markets as a result of the ACA. We saw the results play out from October through December as physicians received termination notices from key health insurers in more than 10 states regarding network consolidation for Medicare Advantage.  (See related story, p. 37.) These moves have impacted thousands of physicians and patients, and this trend may not go away anytime soon.

Narrow networks are believed to offer payers more bargaining power in negotiating contracts with providers and lowering costs of care. Narrow networks also limit choice for patients with a smaller pool of providers and hospitals.



Quality and quantity

The year 2014 will be about cost control, says a recent report from consulting giant pricewaterhousecoopers (PwC) titled “Medical Cost Trend: Behind the Numbers 2014” despite one of the greatest healthcare insurance expansions in history. “For an industry that until recently had consistently seen double-digit growth, the ongoing slowdown poses immediate financial challenges. At the same time, the imperative to do more with less has paved the way for a true transformation of the health ecosystem, from fee-for-service medicine to consumer-centered care that rewards quality outcomes,” PwC says.

Traditional fee-for-service is moving toward a payment structured leaning toward compensation based on outcomes. And many variations will likely surface. Models that will be further developed include:

  • bundled payments for services,

  • (and in some cases bundled payments for multiple providers),

  • episode of care,

  • (providers paid to treat a specific condition over a period of time),

  • Physician Quality Reporting System (incorporating quality metrics),

  • shared savings programs

  • (physicians split savings with the insurer), and

  • Patient-Centered Medical Home

High-deductible health plans will also pose business challenges for most practices and will require a more aggressive collection policy at the time of visit.  PwC estimates that employers offering high-deductible plans as their only option has grown 31% since 2012.

Opportunities abound

And while the predictions sound dire, there are plenty of opportunities for primary care to assert its leadership, showcase its status as a relative bargain among healthcare providers, and advance its mission to experiment with direct pay, ancillary services, and team up with employers and insurers to capitalize on innovative wellness programs to improve the health of your patient population and the practice’s bottom line. Primary care will need to reinvent its services to patients, reassess its use of technology to better monitor population health and engage patients in new ways.


Challenge #2: Government mandates

2014: The year of the government mandate

When primary care physicians (PCPs) of the future look back on 2014, they may well recall it as the “year of the mandate.” That’s because PCPs will see their practices affected by four major government-sponsored requirements:

  • the use of the International Classification of Diseases,

  • for billing, effective October 1;

  • the second stage of the Meaningful Use incentive program (MU2) for electronic health records (EHRs);

  • updated rules for the Health Insurance Portability

  • and Accountability Act (HIPAA) and;

  • the Physician Quality Reporting System (PQRS).

ICD-10: Convert or don’t get paid

Of these, the requirement to use the ICD-10-CM coding system will probably have the greatest impact, for the simple reason that practices not using the new code set will no longer be reimbursed by third-party payers.

The ICD-10-CM codes require a far greater level of specificity than the current ICD-9-CM code set, and thus require training for coders, billers, and providers, as well as extensive changes to-and testing of-billing software. A 2008 study estimated that conversion costs will range from $83,000 to $2.7 million, depending on the size of the practice.

Meaningful use: Attest next year or face penalties

The coming year will also be important for doctors taking part in the government’s Meaningful Use (MU) incentive program to adopt electronic health record (EHR) systems. Those who successfully attested to MU1 in 2011 or 2012 can choose any 90-day period in 2014 to meet their MU2 objectives and qualify for the next round of incentive payments.

In addition, 2014 is the last year in which doctors who have not previously participated in MU can do so and avoid financial penalties beginning in 2015.

The biggest challenge many doctors will face in attesting to MU2 is meeting the requirements for electronically exchanging patients’ health information with other providers, especially those using a different EHR system. EHR vendors are working to include information exchange capabilities in their systems. Participating in a health information exchange network will also enable doctors to meet the interoperability requirements, although the networks are not available everywhere.

HIPAA: risk analysis required this year, plus more stringent penalties

HIPAA’s more comprehensive rule for guarding patients’ protected health information (PHI)-and more stringent penalties for failing to do so-began in September,  but 2014 will be the first full year in which medical practices feel their effect.

Among other things, HIPAA rules require a practice to conduct and document a risk analysis for their PHI, review its practices and procedures for when PHI is lost or stolen, having the ability to send health information to patients electronically, and update its notice of privacy and ensure its availability to patients. The HIPAA rule also sets and describes the four categories of penalties for rule violations and the dollar amounts for each.

PQRS: Reward next year, penalties in 2015

The final mandate requiring PCPs’ attention in 2014 is PQRS, the federal program that rewards physicians and practices for successfully reporting on 138 outcome quality measures. That’s because 2014 is the last year in which the financial rewards-equal to 0.5% of covered Medicare Part B Physician Fee Schedule (PFS) services-are available. Beginning in 2015, the incentive turns into a penalty equal to 1.5% of covered Part B PFS services. The penalty rises to 2% in 2016. 

To-date, physicians’ participation in PQRS has been fairly low. It remains to be seen whether the threat of a penalty will cause more doctors to report.


Challenge #3: Payer headaches, and the fine print

Navigating a convoluted payment maze

The health insurance landscape is more uncertain now than it has ever been. Many physicians are feeling they are on uneven ground, with insurance companies having the upper hand when it comes to how and if they can properly treat the patients who choose to see them.

The Affordable Care Act has caused many insurance companies to make drastic changes-dropping physicians from panels, causing patients to scramble for new plans and new doctors, and making the whole process of finding quality healthcare even more confusing and tedious.

Medical Economics recently polled physicians on their concerns for 2014, and dealing with payers was one of the top issues cited. “Getting done what patients need will be very difficult if we have to call for everything including for medications,” one doctor told Medical Economics anonymously. “Paymentwise, MDs have no say. Take it or leave it. Like UnitedHealthcare thinks now patients are theirs and not doctors’.”

“Insurance companies dictate which doctor, which medicine, which test, how long in the hospital,” said another surveyed physician. “Insurance companies have planted themselves between the patient and doctors and on top of the money pile.”

Unitedhealthcare drops physicians

In a developing story, UnitedHealthcare cut physicians from its Medicare Advantage program, with plans to reduce its 350,000-nationwide physician panel by up to 52,500 in 2014.

Doctors in at least 10 states have already received letters from multiple payers  telling them they are no longer part of certain networks, according to the American Medical Association. Aside from class-action lawsuits, restraining orders, and appealing, which could take months or years, there isn’t much a physician can do to fight back against being dropped.

Experts believe that the uncertainty surrounding health insurance will continue to fall on physicians-and that patients will ultimately be the ones to suffer as a result. UnitedHealthcare is said to be the first of many payers who will start dropping Medicare Advantage physicians, and any other physicians who can’t adhere to strict metrics that don’t fully consider quality of care.

Prior authorizations consume time, money

In the office, prior authorizations continue to sap time and money from practices.

With more time and staff dedicated to communicating with payers, prior authorization activities can cost a practice up to $3,430 per full-time physician, according to a 2013 study published by the Journal of the American Board of Family Medicine.

“This all wastes a lot of our time, and it’s not reimbursed,” says Jeffrey Kagan, MD, an internal medicine practitioner in Newington, Connecticut, and Medical Economics editorial adviser. “I feel that if an authorization has to be done the insurance company should allow a higher level of billing for the visit or a surcharge. I’m sure attorneys don’t bring motions before a judge for free.”

With more patients entering the healthcare system and more payers involved with more physicians, the pressure from insurance companies is not likely to yield in 2014 or in the near future.


Challenge #4: Time

Finding time for patients despite escalating administrative noise 

Primary care physicians (PCPs) pursued medicine because they want to help patients. But every year, physicians complain they are spending less time with patients and more time dealing with the noise that surrounds the business of medicine.

In 2014, it may be deafening.

So, what is the noise? It’s all the requirements that pull physicians away from seeing patients and helping them become or remain healthy. It’s the government regulations and private payer requirements they must meet; it’s the day-to-day difficulty of trying to a run a business, not have enough time.

Next year may be a perfect storm that forces physicians to spend even less time with their patients. The rollout of the Affordable Care Act means business uncertainty, new requirements, and possibly floods of newly-insured patients crowding already busy patient panels. October 1 has been set as the date for the switchover to International Classification of Diseases, 10th Revision, Clinical Management (ICD-10-CM) coding language. Practices that don’t successfully make that switch will simply not get paid.

In addition, practices will either be playing catch-up to meet Meaningful Use 1 or embarking on the much more challenges stage 2 requirements.

Medical Economics provided physicians with an opportunity to make anonymous comments about the challenges facing primary care. Many were concerned that the onslaught of requirements are drowning out the joy of why they chose medicine in the first place.

“I love the patient interaction as much as ever but it is being slowly eroded by so many factors which are beyond our control,” a physician told Medical Economics. “I think both the patient and the physicians are fearful about the future of medicine.”


Challenge #5: Technology costs

Sticker shock: The cost of technology

Practice owners can expect some big health information technology expenses in 2014, as ICD-10 goes live in October, and continuing costs of electronic health records (EHR) systems and Health Insurance Portability and Accountability Act (HIPAA) compliance continue to be significant.

“We are still slowed down 2-plus years after switching to an EHR, and there seems to be a never-ending stream of updates and other expenses, not to mention the costs of the IT guys when something goes wrong,” Rebecca Preston, MD, a family physician at Preston Family Practice in Western Springs, Illinois, told Medical Economics in a recent poll. “I dread the thought of ICD-10, especially when a lot of it does not have anything to offer me as a primary care doctor.”

This is even more of a challenge when physicians see much of the technology they must purchase as a hindrance, not a benefit, to their practice.

“Many practice-based physicians will be challenged to find time and resources to fully understand all of these programs and associated operational implications, and implement new and updated supporting technologies while focusing on their primary role-patient care,” says Mickey McGlynn, Health Information and Management Systems Society EHR Association chair.

Though there are EHR holdouts-20% of primary care physicians still don’t have them, and 34% say they don’t plan on ever getting an EHR system, according to Medical Economics 2013 Continuing Survey-the reality is that technology upgrades could make or break your business in the next year.

“Our industry is in a period of rapid transformation. Physician practices are doing more and more to innovate and respond to our rapidly changing environment to meet the needs of their patients, but with fewer resources,” says Susan L. Turney, MD, MS, FACMPE, FACP, president and chief executive officer of the Medical Group Management Association.


Challenge #6: Staffing and training

Higher staff turnover means new practice costs

Flexibility and efficiency-those two qualities will be crucial for staff recruitment and training in 2014. For many medical practices, survival in the changing healthcare landscape will require staff members to embrace a team-oriented culture and take on new roles within the practice.

As reimbursements become increasingly tied to performance and patient outcomes, success will depend on practices functioning as a team, and more will likely implement the Patient-Centered Medical Home (PCMH) or Accountable Care Organization (ACO) models.

“[These changes] will place increasing pressure on primary care physicians (PCPs) to partner with other providers who share their concept of quality medical care. This may be very difficult due to the independent thinking and personalities of PCPs, specialists, and other providers, who may have the ‘what’s in it for me’ bias,” one physician wrote in a Medical Economics survey.

But finding support staff that meets the necessary criteria is easier said than done. Another survey respondent shared their practice’s on-going struggle: “We can’t find primary care doctors, and the midlevels we are coming across don’t give us much confidence. Our growth is severely handicapped by the difficulty in finding strong employees.”

Coupled with hiring challenges is the difficulty of keeping talented employees once you find them. Earlier this year, the American Medical Group Association (AMGA) and Cejka Search released their annual Physician Retention Survey, which showed that the physician turnover rate hit a new high at 6.8%. The same survey also predicts that the difficulty of hiring and retaining physicians will likely intensify in the coming years, as the primary care physician shortage persists and more aging physicians begin to retire from the workforce.

Training will also be paramount next year for both current and new employees, especially in preparation for the transition to the International Classification of Diseases, 10th Revision, clinical management coding system. Practice owners should anticipate additional hours and costs required for staff training.


Challenge #7: Putting control back in the hands of physicians

Stress, lack of autonomy sour attitudes about medicine’s future

It’s getting harder for solo practitioners to keep their heads above water financially, and their love for practicing medicine seems to be fading. Responses from the Medical Economics 2013 Physician Profile Survey regarding job satisfaction seem dismal, to say the least.

About a dozen physicians said there was “too much regulation.” More pointed to stress, uncertainty, and workload. One doctor summed up what many feel: “Training is too long and too expensive. Work hours are horrible. Reimbursement continues to fall. Regulation continues to increase.”

Physicians feel they are doing a good job when they are providing quality care, and according to a report by the RAND Corporation, productivity quotas and regulations are roadblocks to job satisfaction.

Although it is widely believed that better working conditions are leading primary care doctors (PCPs) to flee to hospital employment, in reality most PCPs continue to own their practices. Nearly 62% of internal medicine specialists are practice owners, while almost 56% of obstetricians/gynecologists and 46% of internists are practice owners, according to the American Medical Association’s 2012 Physician Practice Benchmark Survey. The numbers decline when it comes to family practice (39.8%) and pediatrics (37.3%).

So in the face of increased regulations, decreased reimbursements, and technology that interferes with the doctor/patient relationship, what is the incentive for physicians to maintain their autonomy? “Many doctors like the lifestyle that goes with owning a private practice. This extends beyond specialty,” Charles Cutler, MD, FACP, chair of the Board of Regents of the American College of Physicians said in the October 10, 2013 issue of Medical Economics.

One physician from our survey offered this explanation: “I love practicing medicine. I can’t imagine anything else that gives me the intellectual challenge, the ability to work with people and teach, and the physical opportunity to act and help people become better.”


Challenge #8: Changing patient populations

2014: The year of the new patient?

Millions of Americans without health insurance will soon have it because of Medicaid expansion and other provisions of the Affordable Care Act (ACA).

What happens next is the crucial question. How many of those newly-insured individuals will try to see a primary care doctor in 2014? These patients will present new challenges to physicians when it comes to both providing care and anticipating revenue.

The year 2014 is shaping up to be the year of the new patient and, perhaps just as importantly to practice owners, the year of the high-deductible health plan patient.

As Medical Economics reported in its December 10, 2013 issue, as many as 80% of these newly-insured patients are at high risk of nonpayment. Medical Group Management Association (MGMA) President and Chief Executive Officer Susan L. Turney, MD, MS, FACMPE, FACP, says that the MGMA has identified collecting from self-pay, high-deductible, or health savings account patients is one of biggest challenges identified by MGMA members.

As a result, more physicians will have conversations with patients that until recently were regarded as taboo. They are going to be talking about money, and the cost of procedures. This has implications for the healthcare system as a whole (evidence shows that simply discussing healthcare prices can push costs down) and for individual physicians, many of whom feel ill-at-ease talking about money with patients or taking  actions such as charging for treatments in advance.

That is going to change. “There aren’t many industries that the customer pays so far after the service is performed. Physicians need to get out in front of the payment. This is a big change in the mindset for the industry. Providers won’t be able to afford to collect payments after service for much longer,” Nate Davis, product manager with ZirMed, a healthcare information technology and management solutions company in Louisville, Kentucky, told Medical Economics as part of an article about high-deductible health plans.

Paging Dr. Google

A possible horde of new patients isn’t the only change in patient populations that physicians will have to confront. Today’s patients are less likely to take what a physician tells them at face value, and often come to appointments armed with a self-diagnosis backed up by information they obtain from WebMD and Google. Nearly 60% of patients are considered “online diagnosers,” according to the Pew Internet & American Life Project.

Pro-active patients are a generally good thing, but they present new challenges to physicians. “My hope is that patients will come in with questions, having done some reading,” Reid Blackwelder, MD, FAAFP, president of the American Academy of Family Physicians, told Medical Economics for our Dec. 10, 2013 article on doctor-patient relationships. “It makes my role easier in caring for that patient, but it does sometimes require a different mindset for us physicians, because medicine has for a long time been very patriarchal.”

The good news for physicians is that Dr. Google isn’t cutting into their business. The Pew project found that more than half of the “online diagnosers” consulted with their doctor or a medical professional about what they found online.


Challenge #9: Primary care’s changing role

Are PCMHs the future of primary care?

Many thought leaders in family and internal medicine believe that the reforms brought on by the Affordable Care Act will ultimately create a more unified, less fragmented healthcare system. The vision is that primary care physicians will lead the delivery of medicine and coordinate care through the maze of specialists.

It’s a future that isn’t steeped in the chronic bureaucratic headaches that seem so pervasive today, but offers a broad vision of tomorrow that might ultimately transform how patients receive care and follow-up to it.

Much of this vision is focused on the Patient-Centered Medical Home (PCMH).  According to the U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality (AHRQ), the PCMH performs five functions:

1. Offers comprehensive care for prevention and wellness, acute and chronic care;

2. Treats the whole person based on his or her unique needs, culture, values and preferences;

3. Coordinates care among healthcare system (specialty care, hospitals, home health care, and community services and supports);

4. Offers greater access to services (with shorter waiting times for urgent needs and enhanced in-person hours);

5. Commits to quality care and quality improvement using evidence-based medicine to guide shared decision-making with patients and families.

“AHRQ recognizes the central of health information technology in successfully operationalizing and implementing the key features of the medical home. Additionally, AHRQ notes that building a primary care delivery platform that the nation can rely on for accessible, affordable, and high-quality health care will require significant workforce development and fundamental payment reform.”

The challenge for  primary care practices will lie in conducting  a thorough analysis of its organization, health information technology platform, procedures, and policies related to coordinating care across the medical neighborhood, examining access to the practice, supporting self-managed care, and utilizing risk-stratified care management principles to manage patient populations.

It is a far different approach to medicine, and it will take some work to transform most practices into a highly-efficient PCMH, reports the American Academy of Family Physicians. In fact, Robert L. Wergin, MD, FAAFP, a family physician in Milford, Neb., and president-elect of the AAFP, says that nearly three-quarters of the association’s members are working toward some of these PCMH tenets, including expanded office hours.

If you are interested in the PCMH concept, AAFP has compiled a number of resources specifically to help family physicians at www.aafp.org/pcmh.

Here are some of the concepts addressed:


  • Create and refine the organizational structure

  • Define the work associated with concepts like care coordination

  • Rework job descriptions/duties

  • Budget and forecast for the future

  • Redefine the cultural based around operating in a high-producing healthcare team

Health information technology:

  • Assemble a project team

  • Assess the practice’s readiness communicate, share data,

  • e-prescribe and analyze trends within patient populations

  • Evaluate your EHR’s system capabilities

  • Establish new workflows where necessary

  • Create new policies related to email, use of smart phones,

  • texting, etc.


  • Define a planned care visit, and identify your team

  • Set team goals

  • Set up a Plan-Do-Study-Act cycle to measure outcomes

  • Collect and analyze data to improve care

Patient-centered care

  • Set up same-day appointments

  • Develop an online presence for your practice

  • Create mechanisms to encourage patient self-management

  • Assess patient satisfaction


Challenge #10: Work-life balance

Reconnecting with life outside of the office

There is no such thing as a 40-hour workweek for physicians. More than 73% of physicians surveyed by Medical Economics work more than 40 hours per week, and about 24% work more than 60 hours per week. The demands of the profession mean that for many physicians the work-life balance is tipped heavily toward work, and that’s unlikely to change in 2014.

Next year, physicians will confront uncertainty as the Affordable Care Act takes full effect and emerging care and reimbursement models that put greater focus on patient outcomes and accountability are pushed to the forefront. They will deal with complicated government mandates, including the switchover to ICD-10-CM and more complicated stage 2 Meaningful Use incentive requirements. On top of that, practice owners will continue to face declining reimbursement struggle to keep their businesses viable.

The onslaught of these pressures can lead to the dreaded occupational hazard: burnout. “I am so burned out from complying with regs, adapting to new technology that is less than reliable, juggling an accounts receivable checking account and paying bills that I find myself coming home later and going into office earlier every day,” says an anonymous physician responding to a Medical Economics survey published in the November 25, 2013, issue. “I would like to have a better work life balance but without an income it’s hard to balance!”

So physicians decide they need to work longer hours-and even second jobs-to stay afloat. About 36% of primary care physicians (PCPs) moonlighted on a second job, according to Medical Economics survey results. Meanwhile, home lives are sacrificed and career satisfaction declines. More than 30% of PCPs told Medical Economics that they would not recommend their child pursue a career in medicine. More than that, burnout is causing many physicians to quit practicing medicine or retire early, which only worsens the primary care shortage.

Maintaining a reasonable work-life balance helps safeguard physician wellness which “helps us serve as better role models for our patients and as even more enthusiastic providers of care when we are physically, mentally, and emotionally healthy,” says Tim Sayed, MD, a plastic surgeon who serves on the Healthcare Information and Management Systems Society Electronic Health Record Association Executive Committee.

The unavoidable fact is that unhappy physicians make for a poorer healthcare system. Fixing the issues of physician work-life balance is a major component to improving healthcare in the United States. 


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