If you read the news, talk to colleagues, or attend an industry conference, it might feel like there’s never been a more challenging time to build and lead a medical group. The healthcare landscape is full of uncertainty and changing faster than ever before. The market is quickly becoming more value-based and consumer-driven, and new competitive models are cropping up left and right.
But times of great change are also often ripe for innovation. In spite of all the pressures, we’re seeing independent medical groups succeed outside of the hospital model. We’re witnessing the emergence of new technologies that enable custom workflows and new patient offerings that didn’t exist just a few years before. We’re also watching medical entrepreneurs begin to organize themselves into new, agile structures that increase efficiency, reduce costs, and improve the quality of care.
As CEO of CareCloud, I get to see these changes unfold every day through our work with innovative medical groups across the country. I’m eager to share our perspectives on what’s happening in the industry and help our customers better navigate and succeed in this evolving landscape. Over the coming months, I’ll be publishing a series of articles about the macro forces shaping the business of medicine and how top medical groups are managing through this change.
Here are a few of the themes I’ll be addressing in the series:
1. The shift to value-based care.
Pay-for-performance and outcomes-based revenue models — discussed in theory for decades — have quickly become a reality. In 2014, 20 percent of Medicare costs for more than 50 million patients were financed through value-based payments. That grew to 30 percent at the start of 2016. While the future of the ACA is unclear, value-driven programs such as the Medicare Access and CHIP Reauthorization Act (MACRA) and the Merit-based Incentive Payment System (MIPS) are backed with bipartisan political support.
What does this mean for medical groups? The legacy systems that worked fine in a fee-for-service model are no longer sufficient. Value-based care requires an entirely new approach to business infrastructure and technology. Medical groups must be able manage and measure for quality and remove unnecessary costs from their system. Their systems need to support a higher level of data sharing and collaboration between payers, providers and consumers. They must also facilitate information flow in a secure, compliant way.
We’ll look at how medical groups are adapting their systems to support clinical quality and cost-management initiatives, and examine how cloud technology is enabling automation of basic administrative tasks and linkage of EHR data with new population health tools. We’ll also look at how to design and lead this kind of technology transformation and offer best practices (and common pitfalls) from early adopters.
2. Doctors as entrepreneurs.
Independent medical groups are finding ways to survive and thrive outside of the hospital model. In fact, the American Medical Association (AMA) reports that 60 percent of physicians practice in organizations that are owned by doctors, and only about 20 percent work in practices owned by hospitals or are direct hospital employees. A recent survey by TD Bank also showed that independent medical groups are generally showing optimism about growth in the next two years, especially those owned by Millennials and women.
As complex as the modern healthcare landscape has become, it’s creating tremendous opportunities for innovative medical professionals to build new medical groups from scratch, partner with other providers in narrow networks, or acquire and “roll up” established practices.
In particular, we’re seeing that specialties such as family practice, orthopedics, dermatology, and urgent care have become appealing areas of medical group entrepreneurship, both for their strategic position in the new reimbursement landscape and for posting strong year-over-year increases in net-collections.
As medical groups re-imagine the end-to-end consumer experience in these new models, we’ll look at how they’re importing best practices from retail, banking and other consumer-facing industries into their businesses. We’ll also offer thoughts on what infrastructure and technology shifts are needed now in order to position groups for success in one of these new models.
3. The consumerization of healthcare.
Consumers are taking on more personal financial responsibility for their healthcare costs, particularly those seeing deductible, coinsurance and copay increases. Insurance premiums have climbed 213 percent since 1999 for family coverage purchased through an employer, and patients now pay for a full 25 percent of their medical costs out-of-pocket.
As the new payer group, patients are looking for precise information on what services will cost, what options are available, and what it all means in the context of their overall care plan and budget. They’re also quickly raising their expectations for service and quality.
This “consumerization” of healthcare is creating new competitive opportunities for medical providers to differentiate themselves and attract patients from other providers. For example, CareCloud’s 2016 Patient Experience Index found that Millennials are twice as likely as those in other age groups to switch providers in order to access online financial and medical records.
We’ll look at how high-performing medical groups are using technology to differentiate their practices, attract new patients, and build affinity and loyalty. We’ll discuss ways to improve the patient experience with offerings such as telemedicine, online appointment booking, secure messaging, and online financial tools. We’ll also share insights into what’s coming in the near future, to help you stay ahead of the curve.
While new uncertainties emerge every day in the healthcare sector, the trends I’ve outlined here continue to be tremendously exciting for physicians, patients, and medical group administrators. I look forward to sharing more insights and stories with you over the coming months.