These are uncertain times for physicians. The future of healthcare is uncertain for everyone involved, from payors to providers to consumers. In fact, there may be only one universal certainty about the future of healthcare: things are changing and are going to continue to change.
The federal Affordable Care Act (ACA) has sent shivers of panic through all levels of the industry. Payors are scrambling to find ways to control burgeoning premium and provider costs. Their stated goal is to transition reimbursement from fee-for-service to models based on quality and performance metrics (though no one has really figured out how to accomplish that goal).
Hospitals and other providers are racing to form Accountable Care Organizations (ACOs) and other networks to try to take advantage of these promised “new reimbursement models”. Unfortunately, developing a network that can effectively control costs and performance across a continuum of care is virtually impossible without knowing what criteria payors will pay for, how those criteria will be measured and how they will be incentivized/rewarded. As a result, most of the provider networks I have encountered in the last couple of years are suffering “all hat, no cattle syndrome” — which is to say that they have big plans for managing care but don’t yet have any payor contracts that will pay them for doing so.
For many physicians, particularly those in private practice, the lack of certainty and the resulting panic in the marketplace can be maddening. Looking for any kind of certainty, many physicians have sold or are considering selling out to a hospital. Unfortunately, as noted above, hospitals generally have no better idea of what the future of healthcare will look like than anyone else. Not surprisingly then, most hospital-physician employment agreements have a term of no more than three years, and more and more often, hospitals are building mechanisms into their employment agreements to permit them to reevaluate compensation even before the end of the agreement term.
What will make the most sense for a particular physician or practice will depend on a variety of factors, many of which will be subjective. While there can likely never be any guaranty that a particular decision in this regard will result in success, the chances of making the right decision will be greatly improved with some careful self-evaluation and planning.
The next several posts on this blog will explore some of the big practice planning decisions physicians are being faced with and the various practical and legal considerations that physicians should evaluate in making those decisions. Topics to be covered will include whether to sell, merge or stay the same, identifying the right “partners”, optimizing practice performance to adapt to change and contracting for successful relationships.