Physicians must unite to weather changing socioeconomic, regulatory climate

Payment reform provisions include bundling of services and value-based purchasing.

William L. Rich III

Physicians must pool their resources to meet regulatory benchmarks and satisfy the needs of an expanding patient population as federal health care reform takes effect, a physician-advocate said.

At the American Society of Retina Specialists meeting in Boston, William L. Rich III, MD, medical director of health policy for the American Academy of Ophthalmology, told colleagues that they must work in teams to accommodate an influx of previously uninsured patients who will receive coverage under the Patient Protection and Affordable Care Act.

“Over the next decade, the pressure of constrained resources during a period of expanding health care access — 43 million uninsured — increasing demands for improved quality and patient-centeredness in a more diverse patient population with known disparities of care … will lead to a growing interdependence of society and medicine,” Dr. Rich said.

Health care faces challenges such as burgeoning costs, 43 million insured citizens, perceived poor quality and safety, a lack of comparative effectiveness research, and disparities in care, Dr. Rich said.

A decade-long rise in health care spending has significantly diminished disposable personal income. Out-of-pocket costs for a family of four averaged $16,000 in 2009 and $18,000 in 2010, and they are expected to reach $36,000 by 2019, Dr. Rich said.

“Health care has been a major drain on our economy for well over a decade,” Dr. Rich said. “It’s the leading cause why disposable income in the American middle class has gone down.”

Fee-for-service, bundling

The ability to provide health care coverage for previously uninsured patients hinges on payment reform, Dr. Rich said.

“[The Affordable Care Act] will move us away from fee-for-service, where you were rewarded for doing more volume of service,” Dr. Rich said. “Future payments will be based on the value, in terms of quality and cost, of services provided to patients.”

Starting in 2013, the Centers for Medicare and Medicaid Services will bundle medical services. In ophthalmology, CMS will bundle glaucoma, age-related macular degeneration and diabetic retinopathy services — including drugs, devices, testing, surgeon fees and facility fees — and will pay in installments. Physicians will be encouraged to use more generic drugs and order fewer tests in order to gain a greater share of cost savings, which will be divided between payers and providers.

However, risk adjustment will be a major sticking point of the bundling component, Dr. Rich said.

ACOs, value-based purchasing

Payment reform partly hinges on accountable care organizations (ACOs), collaborative entities comprising primary care physicians, hospitals and other professionals, Dr. Rich said.

Ophthalmology will be largely unaffected by ACOs; ophthalmologists will still be paid under the fee-for-service model, he said.

“So, there’s no need for you to sign up with an exclusive contract with a hospital or physician group tied to an ACO,” he said. “We’re not attractive to hospitals. We generate no income for hospitals. … You’re going to be able to practice the way you are now.”

However, ophthalmologists will need to maintain close communication with primary care providers to retain their access to referrals, Dr. Rich said.

Under a value-based purchasing component starting in 2012, CMS will start sending reports to providers on their use of various resources. Beginning in 2013, providers will be required to report resource use and disclose all financial relationships with industry.

“Physicians respond to both quality efforts, doing the right thing, and they respond to economic stimulus. If you combine those two together, you dramatically decrease variation in care,” Dr. Rich said.

Quality and access

Health care reform also targets care quality, Dr. Rich said. For example, despite explosive growth in health care spending, Americans receive only 55% of recommended care 10 years after National Institute of Health clinical trials, he said.

“Ophthalmology has the highest rate of adoption. But still, it’s a huge problem,” Dr. Rich said.

The Physician Quality Reporting System will be augmented, and outcomes will be publicly reported, Dr. Rich said.

Coverage for 33 million previously uninsured patients, including 22 million entering the Medicaid ranks, will pose numerous challenges. For example, many of the newly insured patients will be minorities with a higher incidence of ophthalmic disease. Dr. Rich has 35 years of practice reacting to changing clinical environments and expressed optimism that challenges will be met head on.

“We have always responded to challenges by keeping patients first, doing the right thing, and I think, both professionally and financially we are going to be fine,” he said. – by Matt Hasson and Michelle Pagnani

• William L. Rich III, MD, can be reached at American Academy of Ophthalmology, Governmental Affairs Division, 1101 Vermont Ave. NW, Suite 700, Washington, DC 20005; 202-737-6662; fax: 202-737-7061; email: hyasxa@gmail.com.
• Disclosure: Dr. Rich has no relevant financial disclosures.