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Could SGR Imperil HITECH for MDs?

October 26, 2010
by Mark Hagland
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Interview: William F. Jessee, M.D., President and CEO, MGMA

At the press briefing hosted midday on Monday by the leaders of the Medical Group Management Association (MGMA), which is currently holding its annual conference at the Ernest N. Morial Convention Center in New Orleans, William F. Jessee, M.D., MGMA’s president and CEO, presented members of the media with the results of recent MGMA member surveys and other research, and offered his interpretations of some of those findings, as well as responding to questions from the press.

Among the most dramatic findings of an MGMA member survey from this summer: among 2,860 groups representing 63,000 physicians in practice, based on the prospect of a 23.6 percent cut scheduled for December 1 in Medicare’s sustainable growth rate (SGR), and an additional 6.5 percent cut scheduled for January 1, medical groups plan drastic changes, including:

  • 76.6 percent will likely delay the purchase of new clinical equipment or facilities
  • 60.5 percent will likely reduce the number of administrative support staff
  • 54 percent will likely reduce clinical staff
  • 49.5 percent will stop seeing new Medicare patients
  • 45.3 percent will likely delay the purchase of electronic health record (EHR) systems
  • 27.5 percent will cease treating all Medicare patients

Indeed, in reaction to the series of developments this summer, in which SGR-related cuts were expected to materialize, MGMA member groups had already taken certain actions, including the following:

  • 37.3 percent delayed purchasing EHR systems
  • 31.7 percent cut the number of administrative staff
  • 29.5 percent cut the number of appointments for new Medicare patients
  • 27.5 percent cut clinical staff

Following the press briefing, Dr. Jessee spoke exclusively with HCI Editor-in-Chief Mark Hagland regarding the interrelationship between potential SGR-related Medicare cuts and EHR development, and other strategically oriented topics. Below are excerpts from their interview:

Healthcare Informatics: Looking at the above survey results, in which MGMA members reported that even the anticipation this summer of SGR-related cuts led them to delay EHR implementation, and in which more than three-quarters said that anticipated cuts coming in December and January would lead them to pull back on EHR implementation going forward, what’s your reaction, particularly given the need to move forward under HITECH [the American Reinvestment and Recovery Act/Health Information Technology for Economic and Clinical Health Act]?

William F. Jessee, M.D.: It’s interesting, because I’ve had this conversation with David Blumenthal [National Coordinator for Health Information Technology David Blumenthal, M.D.]. And I said, you guys need to understand, it’s not a matter of whether our members like the EHR or not, it’s about everything going on in medical practice. And it’s hard for us to advocate this when the SGR thing could really have a negative impact. [Blumenthal] says he’s only concerned with the EHR piece. But I think right now that the SGR/EHR piece is the biggest obstacle right now to EHR implementation. Some of the vendors are trying to get around this now through SaaS [software as a service], which will help. But nobody’s rushing to take on new costs in this uncertain environment. And the uncertainty is probably the worst thing; because when people are uncertain, they tend to get into paralysis mode.

HCI: Do the majority of MGMA members understand that they need to move forward on EHR implementation and automation generally?


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