It truly is the Wild West out there for independent physician practices today. Forty percent of primary care providers said they werent sure their practices would be open through August, according to The Primary Care Collaboratives survey fielded in late June. Decreasing patient volume, declining revenue, increasing technology needs, and an ever-changing policy and payment landscape are crippling them.
Pediatrician listening to child lung and heart sound
At a glance, the options for physicians seem grim. Many independent practices are scrambling to find ways to provide what their patients need with the limited resources they have, while managing the mounting challenges that Covid-19 has brought to bear. Others are considering selling to survive, as they struggle with the trade off between what is best for their patients and what is feasible from a financial and operational standpoint.
But some practices, like Piedmont Adult & Pediatric Medicine Associates in Gastonia, North Carolina, are stable even well-prepared as the pandemic ranges on.
Practice co-owner John L. Scheitler, MD, an internist and pediatrician, and his partners at Piedmont Adult & Pediatric have spent the last year intentionally and ultimately, quite serendipitously putting the right frameworks in place to be able to quickly adapt in a shifting environment. An essential element of their plan was entering into a shared savings program by joining a physician-led Accountable Care Organization (ACO); another was finding a strategic partner to help guide them through the process and provide a playbook for success.
We realized the need to be nimble and change with the times, said Scheitler, referring to the impetus of beginning work with Aledade last year. Founded in 2014 by Farzad Mostashari, MD, Aledade is a health IT company building a network of ACOs to help practices transition to value-based care and remain independent. More than 550 independent physician practices participate in Aledade ACOs.
Shared savings, competition and choice
Under the Medicare Shared Savings Program (MSSP), providers in ACOs are paid in part according to how well they are able to control costs and improve patient outcomes, as opposed to a straight fee-for-service payment structure. This kind of risk-based arrangement encourages participating physician practices to work together as a network to deliver better coordinated, higher-quality care; its also designed to improve overall population health, and decrease cost of care for the industry.
Maintaining physician practice independence through value-based arrangements like ACOs is also critical from a market perspective. A recent Health Affairs study supports the finding that financial integration and consolidation has proven to have anticompetitive effects that drive up healthcare prices in the U.S.
He continued, When there is a single monopolistic provider, they can turn to whoever else theyre negotiating with and say, Pay me because Im big. Not because Im good, because I provide access to high quality care, or because I provide a good customer experience or prioritize patient safety. You will pay me more just because Im big and you have no choice.
When physicians offices are owned by a hospital group, for example, they are much more likely to refer patients to hospitals that employ those referring doctors, even when those hospitals deliver lower quality care at a higher cost. When this consolidation happens on a grand scale, competition decreases, market power shifts, and prices increase for patients and payers alike; meaning, when hospitals or health systems own the majority of physician practices in a community, private insurers are essentially held hostage from a financial standpoint, having to pay whatever prices they demand.
To help combat unnecessary spending and financially-charged referral practices to hospitals, the Centers for Medicare and Medicaid Services (CMS) established the site-neutral payment policy in 2019. The policy mandates that hospitals be paid the same, lower rate as physician practices for the same services to help control unnecessary increases in the volume of hospital outpatient services, while also saving Medicare an estimated $610 million in spending.
Though the rule has been challenged, the U.S. Court of Appeals in the District of Columbia recently sided with the Department of Health and Human Services (HHS), ruling that the agency had the authority to reduce payments to off-campus facilities to the same level as those received by physician practices.
Keeping the patient at the center of value-based care
For physician groups striving to remain independent, Its all about being able to decide what's best for the patient, said Mostashari. If practices are beholden to another set of agendas from an ownership perspective, the duty they owe their employer might be different from the duty they owe patients, he said, adding that this conflict often leads to burnout and moral injury for doctors.
For Scheitler, being able to prioritize whats best for the patient while also maintaining the integrity of the doctor/patient relationship were some of the driving forces behind partnering with Aledade and joining an ACO.
When his practice first started working with Aledade, Scheitler was simply hoping for it to be a good partnership. He could never have predicted that the partnership would help their practice weather the Covid-19 storm. He credits both Aledade and Blue Cross of North Carolina for his practice being stable today.
Though 56 percent of ACOs cited Covid-19 related financial strain as an obstacle that might ultimately cause them to exit the MSSP, Blue Cross of NC is leaning into its value-based arrangements, offering financial support to participating practices to help them stay open and operational for the long haul.
Blue Cross of North Carolina really stepped up as a leader and a payer, said Scheitler, reflecting on the last six to 12 months working with the organization. This is the first time that a payer or insurance company was really a partner in trying to provide support and enabling me to care for my patients.
Overcoming technology and administrative hurdles
Managing technology and making sense of the deluge of disparate data available is also an important factor in sustained practice independence, said Mostashari.
One of the biggest challenges is the wealth of information and data available, which can be difficult for an independent practice to reconcile. Managing this process is a huge lift and a huge risk for independent physician practice, he said, but a very necessary one for practices to get right.
Scheitler agrees, noting that having actionable data, as close to real time as possible, at the ready when hes with patients, has been very insightful and helpful. Theres data Ive never been able to see before [Aledades] application, that Im now seeing, adding that the technologys ability to integrate the various interfaces and data feeds into a standardized, centralized format is different than what Ive seen other technology solutions do.
From a technology standpoint, part of what makes Aledade so powerful is its platform, which makes it possible for all physicians in its network to access the tools, data and services they need to deliver connected, high-quality care. For example, through its population health management platform, which is integrated with more than 90 electronic health records (EHR) providers, physicians can identify high-risk patients and more easily coordinate care.
In terms of technology priorities, virtual care services have become a practice lifeline during Covid-19, especially as people continue to avoid or delay in-person primary care visits. Through Aledade, practices have access to a common telehealth platform, which Mostashari and his team contracted within eight days and rolled out to 150 practices over a weekend.
From a market perspective, by bringing many independent physician practices onto a single, connected platform, Aledade is also aggregating their market power and helping to bring parity in terms of how physicians can work both with health plans and their local health systems. And data shows that with this strategy, physician-led ACOs are getting results.
According to a 2019 analysis from the consulting firm Avalere, physician-led ACOs generated nearly seven times more savings for Medicare in 2018 compared to those that are led by hospitals and typically associated with higher-revenue. The analysis found that physician-led ACOs generated $180 in Medicare savings per beneficiary in 2018, where hospital and health system-led organizations generated $26 per beneficiary.
Keeping up with administrative challenges is also an ongoing challenge for independent practice leaders. Every year, the administrative burdens have gotten worse and worse, said Scheitler. The outcome is that its another layer of administrative burden that, while well-intentioned, is putting a greater and greater wedge between the patient/doctor relationship.
Accelerating value-based care during Covid-19
At the end of the day, whats most important to both Schitler and Mostashari are the patients. ACOs provide the right framework to deliver quality care and allow independent practitioners to swim with the changing tides.
We felt this framework meant we could adapt to whatever changes are coming in healthcare, in a way that we can still advocate for our patients, said Scheitler.
Will Covid-19 slow down the shift to value-based care? Mostashari says no. I think [Covid-19] will accelerate it. I think payers, employers, consumer groups, and doctors are all looking at this fee-for-service debacle right now and saying, theres a better way, and weve got to move towards it.
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