HEALTH REFORM AND THE FUTURE OF MEDICAL PRACTICE

1. HEALTH REFORM AND THE FUTURE OF MEDICAL PRACTICE Presented To

2. BASED ON A WHITE PAPER CONDUCTED FOR: THE PHYSICIANS FOUNDATION

3. President: Lou Goodman, CEO, Texas Medical Association Executive Director: Timothy Norbeck; former Executive Director, Connecticut State Medical Society Vice President: Walker Ray, MD; former president of the Medical Association of Georgia

4. Signatory Medical Societies: • Medical Society of New Jersey • Medical Society of New York • Nebraska Medical Association • New Hampshire Medical Society • North Carolina Medical Society • Northern Virginia Medical Societies • South Carolina Medical Association • Tennessee Medical Association • Texas Medical Association • Vermont Medical Society • Washington State Medical • Association Alaska State Medical Association California Medical Association Connecticut State Medical Society Denton County Medical Society (Texas) El Paso County Medical Society (Colorado) Florida Medical Association Hawaii Medical Association Louisiana Medical Association Medical Association of Georgia

5. WHITE PAPER ADVISORY PANEL Michael Rossi, MD….Executive Director, LeHigh Valley Physician Group David Spahlinger, MD……Senior Associate Dean, Executive Medical Director of the Faculty Group Practice, University of Michigan Medical School John D. Stobo, MD….Senior Vice President, University of California Health System John R. Thomas…..CEO, MedSynergies Ron Yee, MD, MBA...CMO, United Health Centers, Parlier, California

6. WHITE PAPER ADVISORY PANEL S. Wright Caughman, MD….Vice President, Clinical and Academic Integration, Emory University Jane Jordan, JD….Chief Health Council, Emory University Richard Johnston, MD….President, Medical Clinic of North Texas Steven Levin….Managing Director, Chartis Group Claire Pomeroy, MD, MBA… Vice Chancellor and Dean of the School of Medicine, UC Davis

7. FIVE COMPONENTS 1. Reform provisions affecting doctors 2. A national survey of physicians 3. Physician practice model case histories 4. Analysis: physician workforce implications 5. Analysis: legal implications for physicians

8. A FOCUS ON PHYSICIANS. HOW DID WE GO FROM THIS……

9. …TO THIS?

10. AND WHY ARE WE HEADED TO THIS?

11. FROM 1970-2010WHAT HAS CHANGED…AND WHAT HAS NOT

12. A HAMBURGER IS STILL A meat patty and lettuce on a bun 1970…….25 cents 2010…….$1

13. HEALTHCARE: NO LONGER “TAKE TWO ASPRIN…” • Close to 200 Board Certified Specialties • Over 10,000 prescription drugs • Organ Transplants • Face Transplants • Teleradiology/Telemedicine • Non-invasive Techniques • Gene Therapy

14. 2011 HEALTHCARE: FROM BIG…. 1970… 200 million people

15. TO REALLY BIG 2010… 300 million people

16. MORE PEOPLE… AND OLDER PEOPLE 75 million baby boomers started turning 65 in 2011. One every 8 seconds

17. SOMETHING HAS COME BETWEEN US, OUR DOCTORS, AND HEALTHCARE DELIVERY…MONEY Virtually limitless demand vs. finite resources $2.5 TRILLION AND COUNTING A MODEL THAT IS NO LONGER SUSTAINABLE

18. IN TWO DAYS, WE SOLVE THE RIDDLE

19. RIDDLE SOLVED

20. THE IMPACT ON DOCTORS What does reform mean to physicians and to their patients?

21. WHITE PAPER KEY FINDINGS: Two types of reform: Formal……………. PPACA Informal…………. Market/societal forces This time, no “FALSE DAWN”

22. KEY FINDINGS: The independent, private practice model will be largely (though not uniformly) replaced. Physicians will consolidate, be employed, or align with larger entities

23. KEY FINDINGS: REGIONAL VARIANCE/PREVAILING MODELS ACOs (Medicare & Commercial) Larger, non-aligned groups Larger, aligned groups Medical homes Community Health Centers Concierge practices Smaller, aligned groups Traditional private practice

24. OBSTACLES TO FORMING AN ACO Source: AMN Healthcare 2011 ACO Survey Physician staffing/alignment...........42% Lack of Capital……………………………..38% Lack of integrated IT systems………..32% Lack of evidence-based protocols…..25%

25. KEY FINDINGS: THE MEDICAL PRACTICE ENVIRONMENT: FURTHER EROSION Through acts of omission and commission, “reform” is, on balance, a net loss for physicians and will further erode the medical practice environment No payment fix (SGR) Tort reform not addressed Onerous compliance regulations More patient volume Higher patient acuity Problematic cost/quality tracking Increased office expense ”Status quo” (pre-authorization, multiple forms) largely intact

26. KEY FINDINGS: REFORM WILL EXACERBATE THE PHYSICIAN SHORTAGE Supply provisions inadequate to meet demand Access issues for Medicaid, Medicare and other patients Primary care/specialist disparities to continue Many physicians will cut back or opt out Physicians will redefine their roles, rethink delivery models

27. DID ANYBODY ASK WHAT PHYSICIANS THINK? SURVEY OF PHYSICIANS AND HEALTH REFORM ”Thank you for asking”

28. RESULTS: WHAT WAS YOUR INITIAL REACTION TO PASSAGE OF HEALTH REFORM?

29. RESULTS: HOW DO YOU FEEL NOW ABOUT HEALTH REFORM?

30. RESULTS: DO YOU BELIEVE THE VIEWPOINT OF PHYSICIANS WAS ADEQUATELY RESPRESENTED TO POLICY MAKERS AND THE PUBLIC DURING THE RUN-UP TO PASSAGE OF HEALTH REFORM?

31. RESULTS: HOW DO YOU THINK REFORM WILL AFFECT PATIENT VOLUME AT YOUR PRACTICE?

32. RESULTS: DO YOU NOW HAVE THE TIME AND RESOURCES TO SEE ADDITIONAL PATIENTS IN YOUR PRACTICE WHILE STILL MAINTAINING QUALITY OF CARE?

33. RESULTS: HOW DO YOU BELIEVE HEALTH REFORM WILL AFFECT THE AMOUNT OF TIME YOU ARE ABLE TO SPEND PER PATIENT?

34. RESULTS: HOW DO YOU BELIEVE REFORM WILL AFFECT THE QUALITY OF CARE YOU ARE ABLE TO PROVIDE?

35. RESULTS: WHICH BEST DESCRIBES YOUR ATTITUDE TOWARD MEDICAL PRACTICE BEFORE REFORM WAS ENACTED?

36. RESULTS: WHICH BEST DESCRIBES YOUR MEDICAL PRACTICE NOW THAT REFORM HAS BEEN ENACTED?

37. RESULTS: DO YOU BELIEVE REFORM WILL COMPEL YOU TO CLOSE OR SIGNIFICANTLY RESTRICT YOUR PRACTICE TO ANY CATEGORY OF PATIENT?

38. RESULTS: CLOSE SIGNIFICANTLY RESTRICT Medicaid………………………………. 51% …………………………..42% Medicare………………………………. 30% …………………………. 57% Indigent………………………………… 43% …………………………. 38% Patients covered through exchange… 24% …………………………. 44% Some HMO/managed care patients… 17% …………………………. 42% All New patients……………………..… 5% …….……………………. 37% Self Pay………..……………………..… 10% …….……………………. 24% Privately Insured……………………..… 3% ……..……………………. 18% Other…………………………………..… 6% ………..…………………. 9% IF YES, PLEASE INDICATE ALL THAT APPLY:

39. RESULTS: CONSIDER YOUR PRACTICE PLANS OVER THE NEXT THREE YEARS AS REFORM IS PHASING IN. DO YOU PLAN TO:

40. RESULTS: WHICH BEST DESCRIBES YOUR VIEW OF THE INDEPENDENT, PRIVATE PRACTICE MODEL?

41. IF YOU COULD MAKE A STATEMENT TO POLICY MAKERS AND THE PUBLIC ABOUT HEALTH CARE REFORM AND THE STATE OF THE MEDICAL PROFESSION TODAY, WHAT WOULD YOU SAY? 1,200 written responses “The bill is too long and comprehensive to know what is coming. I fear the unknown.”

42. SURVEY CONCLUSION Physicians are being systemically disengaged from the practice of medicine The Result: LIMITS ON PATIENT ACCESS

43. REFORM AND THE PHYSICIAN WORK FORCE WHO WILL SEE THE 32 MILLION NEWLY INSURED? THE 75 MILLION BABY BOOMERS ACCESSING MEDICARE? THE 50 MILLION NEW ADDITIONS, 2000 – 2020?

44. HOW MANY MORE PCs? Source: The Lewin Group 32 million newly insured patients X 2 additional patients visits per year = 64 million patient visits divided by 4,000 = 16,000 additional primary care doctors

45. REFORM: CONSPICUOUS FOR WHAT IT DOES NOT DO • Does not remove the cap on GME funding • Just 889 “new” residency slots through redistribution

46. RESIDENCY CHOKE POINT Medical School Enrollment: 18,000+ and growing Residency: 25,000 and stagnant In practice: Negative growth by 2016 Source: MGT of America

47. THE PHYSICIAN SHORTAGE: RESULT Health Reform throws one bucket of water on the fire and two buckets of gasoline

48. THE PROBLEM: MEDICAL STUDENTS ARE GOOD AT MATH Source: Merritt Hawkins 2011 Revenue of Physician Recruiting Incentives Average income, Primary Care, with Medicare increases, vs. Specialists Family Practice: $178,000 + 2.5% increase…………………………….….. $182,450 Internal Medicine: $205,000 + 5% - 10% increase….. $215,250 - $225,500 Pediatrics: $183,000 + 0% increase…………………………………………….. $183,000 Anesthesiology…………………………………………………………………….…………. $335,000 Radiology…………………………………………………………………………...…….….… $402,000 Cardiology (inv.)…………………………………………………………………….……….$532,000 Dermatology……………………………………………………………………………...…… $331,000 Orthopedic Surgery……………………………………………………………..….……… $521,000 Urology…………………………………………………………………………………………….. $453,000

49. PHYSICIAN MALDISTRIBUTION TO CONTINUE 6,200 Health Professional Shortages Areas (HPSAs) 67% in rural areas 65 million Americans $1.5 billion over 5 years (2011 – 2015) to National Health Service Corps for Loan Forgiveness 38% of MERRITT HAWKINS SEARCH ASSIGNMENTS FEATURE LOAN FORGIVENESS

50. ED CROWDING WILL PERSIST ER visits grew 7% in Massachusetts from 2005 to 2007 PATIENTS ARE SEEKING CONVENIENT CARE RATHER THAN EMERGENCY CARE Source: CDC “Emergency Department Visitors and Visits: Who Visited the ER in 2007”, The Boston Globe