It was interesting to read about a recent survey by the Irving, Texas-based Provista, a supply chain improvement company, that garnered information from the leaders of a variety of different types of non-hospital patient care organizations, on the cost-containment imperatives they are facing these days in the wake of federal healthcare reform, Medicare cuts, and other policy- and reimbursement-related challenges.
Not surprisingly, the leaders of ambulatory surgical centers, cancer centers, home health agencies, and physician practices all agreed that they were under pressure to cut operating costs, and a plurality or majority of all the groups surveyed are currently doing so.
In the survey, 76 percent of ASC leaders, 74 percent of home health agency executives, 71 percent of cancer center leaders, and 56 percent of physician practice leaders, are currently actively cutting costs in order to adjust to the new reimbursement environment.
Now, on the one hand, the percent of physician practice leaders making that statement is lower than that of the executives from the other types of organizations. On the other hand, physician practices have not been experiencing the severe cuts that ASCs and home health agencies have been, of late.
Furthermore, when it comes to making investments to help their organizations become more cost-effective, executives at physician practices who responded to this survey cited making “computer and/or software” purchases at a far higher rate—58 percent—than any other item—whether it be malpractice insurance (30 percent), furniture (28 percent), or such items as exam tables (16 percent).
The results coming out of these surveys always have to be taken with a significant grain of salt, but what the results of this particular survey underscored for me was that the leaders of medical groups, who until recently tended to resist implementing the kinds of operational changes needed to respond to the rapidly changing reimbursement landscape, are now making moves. Indeed, conversations with medical group leaders in the past year or so have indicated to me that attitudes are now changing pretty quickly. Perhaps some of this change is emerging out of the growing panic over what’s known as the “SGR problem”—the need to create some kind of long-term solution to the ongoing “patches” that have given physicians breaks from inevitable payment cuts under the Medicare Sustainable Growth Rate formula.
In any case, in the face of increasingly straitened reimbursement, physician group leaders are beginning to move ahead now to make the investments they will need in order to satisfy core requirements of the meaningful use process under the HITECH (Health Information Technology for Economic and Clinical Health) Act, and various elements of the Affordable Care Act. As one medical group leader told me recently, “Look, we know it’s never going to get any better,” when he described the IT investments that he and his colleagues were making in his organization. Indeed, even though each eligible provider (and both physicians and some mid-level providers qualify) can obtain up to $44,000 in total from the HITECH program, in most cases, the average per-physician cost for implementing an electronic health record seems to be averaging around $100,000 per doctor; so meaningful use funding still leaves gaps.
But I’m hoping that smaller surveys like this one from Provista are confirming real forward movement on the ground in terms of full clinical IT implementation, because, as all the already-aware physician group leaders in this country know, meeting all the requirements of both formal federal healthcare reform and the demands of private payers, will never get easier. And the requirements from both public and private payers are in fact only going to become more and more challenging to fulfill.