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- Jan 23, 2016
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Ok.
So the future of reimbursement is increased medicare population (2nd lowest payer to tricare) entering the system at an estimated 20% move over the next 5 years alone. Over all this impacts reimbursement as your total case volume may increase but the money cases (commercials) will be a lower percentage. end result, you work harder for the same or less money.
More commercials will raise deductibles making it harder for us to collect on the half descent payers. Imagine you make 30K a year with a family and you have a 5-6K deductible you might as well have NO insurance until after you have basically defaulted on that 5-6 K deductible. The people you default on send you to collections thereby damaging your credit. Now your credit is gone and there is literally no negative to NOT paying these bills. So you simply continue to default on everything that isnt eating or living or on things that can be taken from you (car etc). End result the anesthesia bill they get 30 days after surgery wont be a priority and more will elect to simply NOT pay it.
Bundled payments will result in all of us being forced into a hospital CIN (clinically integrated network) or IPO (indep. physician org) in order to negotiate with insurers as a larger unit in hopes of creating some negotiating power by doing so. This may sound good but it also results in other specialities having a better idea of our income. That ISNT ever good. Additionally, now we will be pitted against each other to divide the 'flat fee' for a case (say a lap chole or whatever). Anesthesia will be negotiating with surgery and the hospital to divide up that single fee. Imagine how exactly that will go and then remember there is only one of us 3 who does NOT generate revenue. We will be on the bottom of that payment heap. Assume this means you will make less then than you do now. Goodbye to all those cases where your anesthetic is valued at more than the surgical fee.
So where are we headed?
I think bundled payments will fail but that we will be in a limbo with it for an undetermined period of time (maybe a decade regardless of who the president is).
I think commercial reimbursement will continue to rise minimally every contract but that increase will not come close to matching the higher volume of medicare and medicaid cases which flood the system over the next 5 years.
I think medicare $/RVU will stagnate or minimally increase yearly but it will be nearly insignificant.
So the reality is that while strictly, reimbursement is going up the overall revenue per case will decrease as payer mix shifts from an average of 60/40 (medicare/commercial) closer to 70/30. The metric which matters is the decrease in revenue per case not per unit as it best estimates the impact of increasing low payer volume.
What does this mean for the average physician? Here is my estimation:
- Stagnating and lower reimbursement. Especially with the AMC model expanding as it adds a 3rd party being paid (investors) expecting increasing revenues quarter on quarter.
- A disintegration of the physician only practice and an increase in other models of varying types as economics dictate.
- A continued trend of hiring physicians is in the future. With ownership comes power to the owners. However, a breaking point will come where the pendulum swings back to the private practice side. That will happen when hospitals find that paying surgeons (and other physicians) a salary and bonus structure by RVU eventually isnt less than the downstream revenue that they are estimated to generate. Then they will make bonus impossible and everyone will go private again. How long will this take? Not sure. Maybe 5-7 years.
What does everyone else think?
So the future of reimbursement is increased medicare population (2nd lowest payer to tricare) entering the system at an estimated 20% move over the next 5 years alone. Over all this impacts reimbursement as your total case volume may increase but the money cases (commercials) will be a lower percentage. end result, you work harder for the same or less money.
More commercials will raise deductibles making it harder for us to collect on the half descent payers. Imagine you make 30K a year with a family and you have a 5-6K deductible you might as well have NO insurance until after you have basically defaulted on that 5-6 K deductible. The people you default on send you to collections thereby damaging your credit. Now your credit is gone and there is literally no negative to NOT paying these bills. So you simply continue to default on everything that isnt eating or living or on things that can be taken from you (car etc). End result the anesthesia bill they get 30 days after surgery wont be a priority and more will elect to simply NOT pay it.
Bundled payments will result in all of us being forced into a hospital CIN (clinically integrated network) or IPO (indep. physician org) in order to negotiate with insurers as a larger unit in hopes of creating some negotiating power by doing so. This may sound good but it also results in other specialities having a better idea of our income. That ISNT ever good. Additionally, now we will be pitted against each other to divide the 'flat fee' for a case (say a lap chole or whatever). Anesthesia will be negotiating with surgery and the hospital to divide up that single fee. Imagine how exactly that will go and then remember there is only one of us 3 who does NOT generate revenue. We will be on the bottom of that payment heap. Assume this means you will make less then than you do now. Goodbye to all those cases where your anesthetic is valued at more than the surgical fee.
So where are we headed?
I think bundled payments will fail but that we will be in a limbo with it for an undetermined period of time (maybe a decade regardless of who the president is).
I think commercial reimbursement will continue to rise minimally every contract but that increase will not come close to matching the higher volume of medicare and medicaid cases which flood the system over the next 5 years.
I think medicare $/RVU will stagnate or minimally increase yearly but it will be nearly insignificant.
So the reality is that while strictly, reimbursement is going up the overall revenue per case will decrease as payer mix shifts from an average of 60/40 (medicare/commercial) closer to 70/30. The metric which matters is the decrease in revenue per case not per unit as it best estimates the impact of increasing low payer volume.
What does this mean for the average physician? Here is my estimation:
- Stagnating and lower reimbursement. Especially with the AMC model expanding as it adds a 3rd party being paid (investors) expecting increasing revenues quarter on quarter.
- A disintegration of the physician only practice and an increase in other models of varying types as economics dictate.
- A continued trend of hiring physicians is in the future. With ownership comes power to the owners. However, a breaking point will come where the pendulum swings back to the private practice side. That will happen when hospitals find that paying surgeons (and other physicians) a salary and bonus structure by RVU eventually isnt less than the downstream revenue that they are estimated to generate. Then they will make bonus impossible and everyone will go private again. How long will this take? Not sure. Maybe 5-7 years.
What does everyone else think?
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