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Top 6 Practice Management Challenges Facing Physicians in 2015

Medical Economics has compiled a list of the top challenges (and solutions) physicians may face in 2015. From that list, here are the six issues that focus on practice management.

Challenge 1: Administrative burdens

The link between busy work and burnout

If you feel like you’re glued to your computer or tablet for much of the day, it’s not your imagination. Many physicians say mounting paperwork is keeping them from spending enough time with patients. In The Practice Profitability Index, the percentage of physicians who spend more than one day per week on paperwork increased from 58% in 2013 to 70% in 2014.

This trend is eroding physicians’ on-the-job happiness. “The physicians I know truly enjoy spending time with patients and teaching, and anything that takes them away from that is a negative,” says Henry Borkowski, MD. In one sign of how squeezed many feel, 81% said they were overextended or at full capacity, according to The Physicians Foundation survey.

Prior authorizations are a major, and growing, source of physicians paperwork burden. More and more payers are requiring prior authorizations for more drugs and procedures. Consider, for example, that in 2013 21% of the brand-name medications covered under Medicare Part D required prior authorization, and 35% were subject to some form of utilization management. By contrast, in 2006 when Medicare Part D began, those numbers were 8% and 18%, respectively, according to a Kaiser Family Foundation study.

Another Kaiser study, from 2012, estimated that the nation’s physicians spend more than 868 million hours annually on prior authorization activities. Payers say prior authorizations hold down costs, improve treatment efficacy and ensure patient safety. To physicians, however, they are an obstacle to providing the best care for their patients.

Technology-driven changes, from meaningful use to ICD-10, are one key administrative task that’s taking up time. In a survey earlier this year by Deloitte, three quarters of physicians said despite increasing costs, electronic health record (EHR) systems do not save time.

From prior authorizations to struggles with implementing and operating EHR systems, physicians are increasingly struggling to squeeze patient encounters in between bouts of paperwork and other red tape.

“I can’t stand saying it—and can’t believe physicians say this—but patient care has almost gotten in the way of documentation and charting,” says Michael Murphy, MD, who gave up medical practice recently to become chief executive officer of ScribeAmerica.

“Obviously, if you’re in front of a computer and have all these different mandates of quality and ICD-10, you’re going to see fewer patients and have less financial return,” Murphy says. “That’s what’s driving a lot of physicians to sell their practice. On average, you’re seeing 25% sustained productivity losses around the country. That makes it hard to keep a practice open and hard to give your staff raises.”

Challenge 2: Independence vs. employment

Physicians chafe at pressures to give up independent practice

For some physicians, joining a large hospital system offers a haven from the rising administrative burdens of staying independent and from competitive pressures that can drive a small practice into insolvency. But joining a hospital system is not a panacea for the challenges facing physicians.

Heena Rajdeo, MD, for example, joined a hospital system in 2011 after 30 years of being a partner in a two-physician surgical practice. But she soon found that she preferred independence to being someone else’s employee. “Now I am going to have to invest everything,” Rajdeo says.

Some physicians are returning to private practice because their compensation from hospitals became less attractive after the expiration of their initial contract, says Divan Dave, chief executive officer of OmniMD. During an initial “honeymoon period,” he says, their pay was based on the previous three years of tax returns. However, after the contracts were up, the hospitals switched to performance-based pay, which ended up being lower.

Omni is helping three physicians, including Rajdeo, return to independent practice after being employed by hospital systems. “They got so upset at the hospital they are now converting their private practices back,” Dave says. “One of the doctors said, `I didn’t go to medical school to work for someone. I went to be independent.’ ”

Indeed, for all the talk of the demise of private practice, the American Medical Association’s 2012 Physician Practice Benchmark Survey found that 60% of physicians were working in physician-owned practices compared with 29% who worked in a practice that was either partially- or wholly-owned by a hospital system. While the trend towards consolidation and hospital employment is continuing, the AMA data suggests it has not happened as quickly as many analysts expected.

Still, the pressures on independent physicians are such that more physicians are likely to seek to join a hospital in the coming years.

“As large networks acquire more and more physicians, they direct patients to their physicians,” says Henry Borkowski, MD, a Waterbury, Connecticut cardiologist and member of the board of MPS ACO Physicians in nearby Middletown. “If you are outside of the network in most communities, that means the hospital systems or national networks will hire people to compete with you and take the losses up-front that are involved to ultimately get the patient base.”

It is not a theoretical issue for him. Borkowski and his colleagues ran their Connecticut-based practice, Cardiology Associates of Greater Waterbury, independently for 37 years before affiliating with Waterbury Hospital two years ago. Lower reimbursements were a key motivating factor. “It was purely a financial decision,” he says.

Challenge 3: Payers dictating healthcare

Why payer interference is increasing

Paul Sueno, MD, knew it would happen eventually, because his mentors told him it would. And sure enough it did: “I received my first request for an audit a few weeks ago for a Medicare chart,” he says.

Fortunately, his staff has been scrupulous about record-keeping. “We document everything, within reason,” he says. “We know if it’s not documented, it didn’t happen.” Nonetheless, he doesn’t know what to expect. “How this all is going to happen is still unclear to me,” he says.

Physicians have to deal with a range of audits tied to meaningful use and other programs. The federal government can audit Medicare patients’ charts, while individual states can audit records for Medicaid patients, since they fund Medicaid, up to 10 years after a patient’s treatment, notes Tatiana Melnik, JD, an attorney specializing in technology and healthcare IT in Tampa, Florida.

“It’s very important that they print out the information and keep it in a binder,” Melnik says. “If the audit takes place six years from now they are still going to have to produce that information.”

The audits are just one sign of a trend toward payers influencing—or some would say dictating— patient care that, for many medical professionals, can erode their satisfaction with their profession. In a RAND study that the American Medical Association released in October 2013, being able to provide quality care was a top driver of physicians’ satisfaction—and factors that blocked this, such as payers’ refusal to cover necessary services—eroded this.

It isn’t just Medicaid and Medicare that are dictating patient care. According to the 2014 National Scorecard on Payment Reform issued by Catalyst for Payment Reform, a San Francisco nonprofit that works on behalf of large healthcare purchasers, 40% of payments to hospitals and providers are designed to nudge them toward what the insurers consider better care. In some cases, payments reward more affordable care.

Factors like these remind Mary Ann Block, MD, a general practitioner in the Dallas-Fort Worth, Texas, area, of how prescient her decision to stay independent of these outside payers really was.

“I believe in the sanctity of the doctor-patient relationship,” says Block. “That third-party—whoever it is—should not be in the middle of it.”

Audits are not the only way payers are inserting themselves into the physician-patient relationship. Prior authorizations are another ways payers attempt to take decision-making out of the hands of physicians.

In addition, more payers are tightening their provider networks in an attempt to reign in costs. This move toward narrow networks means many physicians are being evaluated.

Challenge 4: Patients dictating healthcare

The problem with patient satisfaction

Balancing the desire to practice quality medicine with the need to obtain positive feedback from patients promises to be a growing challenge for primary care physicians (PCPs) in 2015 and the years beyond.

As with anyone else providing services to customers, physicians have always wanted their patients to be satisfied. But government programs such as the Physician Quality Reporting System—which indirectly ties Medicare reimbursements to patient satisfaction scores—as well as the growth of websites devoted to evaluating doctors, the need to keep patients satisfied has taken on new urgency. But is that need affecting PCPs medical decision-making?

The answer is “yes,” according to many practitioners. “Physicians are judged by their performance grade card, so to protect their livelihood they tend to modify their practice patterns, to be more productive and improve their scores,” says David Fleming, MD, MACP, president of the American College of Physicians. “In all too many practices medicine is devolving into a metrics-centered business, rather than a patient-centered profession.”

“The challenge for clinicians is that the goal of patient satisfaction isn’t always aligned with the goal of providing high-value care,” says Joshua J. Fenton, MD, MPH, associate professor of family and community medicine at the University of California, Davis. “I assume this is true in other specialities, but in primary care, there can be tension between what a patient wants and expects and what the provider believes to be clinically important and evidence-based.”

William Sonnenberg, MD, FAAFP, board chair and a past president of the Pennsylvania Academy of Family Physicians, made the point even more forcefully in a 2013 editorial in Keystone Physician, the academy’s journal: “The mandate is simple: Never deny a request for an antibiotic, an opioid pain medication, a scan, or an admission,” he wrote. “And doctors face the reality that uncomfortable discussions on behavioral topics—say, smoking or obesity—come with the risk of a pay cut. Satisfied patients are not healthy patients.”

Sonnenberg goes on to recount anecdotes such as an emergency department that dispenses Vicodin “goody bags” to all discharged patients so as to improve their Press Ganey patient satisfaction ratings, and a physician who reported upping his satisfaction scores by 7% by prescribing an antibiotic for any patient with complaint of a cough, sore throat, or sinus headache.

Sonnenberg’s conclusion is supported by results of a 2012 study of patient satisfaction, healthcare utilization, expenditures, and mortality published in the Archives of Internal Medicine.

The authors found that “higher patient satisfaction was associated with less emergency department use, but with greater inpatient use, higher overall health care and prescription drug expenditures, and increased mortality.”

While the measurement and reporting of patient satisfaction scores likely will continue, it doesn’t mean doctors have to give in to every patient demand, notes Sonnenberg. “We should truy to be kind to our patients and take time to understand them, but…sometimes patients have to be told ‘no,’ and the leadership in healthcare must understand this.”

Challenge 5: Staff retention

How to keep your staff superstars happy

Ask any consultant, and they will tell you that a practice is only as good as its employees.

As more payers gravitate toward value-based payment models and increased emphasis is placed on effective team-based medicine, maintaining staff will be critical to practice success.

Yet, recruiting and retaining top talent continues to be a challenge for many medical practices.

Staff turnover can be a significant drain on both practice revenue and resources. The Center for American Progress estimates that for workers earning less than $50,000 annually, it will cost employers approximately 20% of that employee’s salary to find a replacement. As some practices face shrinking revenue under fee-for-service models, Deborah Walker Keegan, PhD,FACMPE, a healthcare consultant for Medical Practice Dimensions and Woodcock & Walker Consulting, says they may look at reducing their staffing size. “At some point, unless other changes are made to recognize these staff in terms of both tangible and intangible rewards, staff feel overworked and underpaid,” she says.

“These practices recognize that each member of the care team is vital to the success of the whole,” Keegan says. “They expect high engagement and performance, while at the same time creating a practice where staff feel their work is valued and makes a difference in patients’ lives.”

Complexity is impacting practices both clinically and administratively, she says. When staff members are faced with additional workload, often it is without first being provided with the necessary tools and education. Also, uncertainty has some staffers feeling insecure in their employment as healthcare continues to change, Keegan says.

“Faced with this challenge, some staff go about their day racing from one task to another, feeling increasing stress as they try to accomplish multiple, often competing demands,” Keegan says. “They feel they cannot get out from under the weight of the work and are not able to do their very best work. As a consequence, some staff members are seeking jobs that are more defined (and less chaotic).”

Successful practice managers must walk in their staff’s shoes in order to keep them happy at work. Addressing workplace issues that seem minimal to you can go a long way. Also, pay must remain competitive.

“Your employees can reach superstar status only if their lower-order needs are met: The paycheck is good and working conditions are fair,” says Judy Bee, practice management consultant with Performance Practice Group in La Jolla, California, and a Medical Economics editorial board member. “Good employees may leave because they are lured away (someone else promises something missing in your practice) or because they are driven out (something in your practice is intolerable.)”

Bee says to reward employees in meaningful and creative ways. Extra paid time off, gas and other gift cards and tuition assistance for dependent children can solve employees’ problems that may hinder workplace performance.

“In today’s world of declining reimbursements, lower revenue means budget pressure on staff compensation. But that is the employer’s problem to deal with,” Bee says. “Physicians and managers should never talk about such matters in the presence of the staff because it can cause anxiety about job security, which can lead to distracted job performance and behavior.”

Challenge 6: Avoiding liability

The ACA’S impact on malpractice

The influx of patients stemming from the Affordable Care Act (ACA), could be contributing to added medical malpractice claims.

A 2014 report from Aon Risk Solutions projects the frequency of claims per class 1 (internal medicine) physician in 2014 to be 3.37%, and the severity of claims to be $185,000 per claim. The projected frequency of claims by Aon in 2014 was 2.97% per class 1 physician, with a price tag of $203,000 per claim.

Aon projects the loss rate for physician professional liability to be $6,230 per class 1 physician for incidents occurring in 2015, up from $6,030 in 2014.

The 2015 projected loss rate for hospital general liability is $125 per occupied bed versus $119 in 2014, while the average general liability claim is expected to be $38,000 for claims occurring in 2015, up from 2014’s projection of $36,000. The report draws on data from all U.S. states and provides specific benchmarks for 27 states and the District of Columbia.

According to the report, Florida ($7,920) has the highest projected loss rates for 2015 at $7,920, while Indiana, ($800) and Minnesota ($770) have the lowest.While the expanded market might increase claims, premium prices have been holding steady for several years. The median level of annual premiums paid by family/general practitioners in 2013 was $11,900, unchanged from the prior two years.

Since 2009, median annual premiums for family/general physicians have dropped by 5.8%, and premiums for internal medicine practitioners have come down by 11.7%, driven largely by greater competition.

As a way to avoid potential liability, some physicians report practicing defensive medicine. Erring on the side of caution, physicians order more diagnostic procedures than might be necessary to head off litigation.

But a new study suggests that the overuse of resources might have less to do with avoiding liability than with routine. RAND Health and RAND Institute for Civil Justice looked at emergency department data from Medicare patients from 1997 to 2011 in three states that raised standards for malpractice liability. The new standards essentially required patients to prove that physicians consciously disregarded the need to use “reasonable care.”

The study found that “legislation that substantially changed the malpractice standard for emergency physicians in three states had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates.”

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