Part 2: The Business of Medicine - Navigating in a New Era of Medicine, A Call to Action ? A Tale of Three Letters!
Including an interview with Prof. Edward F.X. Hughes, MD, MPH, of the Kellogg School of Management, Northwestern University, Evanston, Illinois
ACOs, RVUs, and RACs. Are you as confused as I am? This new era of healthcare has ushered in a plethora of acronyms, entities and abbreviations that would confuse any seasoned physician, much less a new healthcare provider.
Consider this fictional yet realistic scenario:
Dr. Emm Dee completes his residency and is hired by A.B.C. ACO in his hometown. He asks for clarification on how he will be compensated. The head practice administrator, slightly distracted because of a recent RAC audit, which fined the organization for thousands of dollars, states that their compensation is based on RVUs. The administrator added that the new CCHIT EMR will be optimized to help him accurately code in ICD-10 mandated by v5010. Now, Dr. Emm Dee is completely befuddled.
To be clear:
- ACO: Accountable Care Organization, a healthcare organization housing providers from all specialties such that patients could have every healthcare issue addressed under one roof, and by virtue of monitoring the patient's outcomes, the organization as a whole could be held responsible for the successful or less than successful patient outcomes.
- RAC: Recovery Audit Contractors, a federal program developed to identify both Medicare overpayments and underpayments to hospitals. These contractors are paid on a contingency basis receiving a percentage of fees collected. According to CMS, RACs collected over 996 million dollars in overpayments to providers and just over 37 million in underpayments.(http://www.aha.org/advocacyissues/rac/index.shtml)
- RVU: Relative Value Units, are the measures used to quantify the amount of work or intensity of healthcare rendered by the physician, which is increased or decreased based on the complexity of the patient's medical condition.
- ICD-10: International Classification of Diseases, 10th edition codes will be used to report medical diagnoses and inpatient procedures instead of ICD-9 code sets as of October 1, 2013.(http://www.cms.gov/Medicare/Coding/ICD10/Downloads/ICD10IntroFactSheet20100409.pdf)
~ V5010: Version 5010, is the revised HIPAA set of electronic transaction standards, which stipulated that all HIPAA-covered entities transition to these standards by January 1, 2012.(http://www.cms.gov/Medicare/Coding/ICD10/Downloads/ICD10IntroFactSheet20100409.pdf)
This alphabet soup of new healthcare policies and mandates in healthcare represents one of the many challenges for new physicians to digest and understand in the midst of rendering excellent healthcare.
From my perspective, some of the biggest threats include a shortage of healthcare providers especially primary care physicians, egregious Medicare reimbursement cuts and a lack of physician education and knowledge, as in the example above, in business, economic and policy aspects of healthcare. As in Part I of this post, I called on Dr. Edward Hughes for his input on his opinion of the greatest opportunities and the biggest threats to current day healthcare that physicians should understand.
Dr. Hughes Weighs In
According to Dr. Hughes in Part 1 of this blog post, physicians are, in fact, "factors of production" in the healthcare industry. This terminology, standard in other industries, is new to physicians and represents a perceptual shift of their importance from their traditional stance of "captains of the ship" to one of lesser importance. Anytime a factor of production is viewed as a commodity, both their bargaining power in influencing the future direction of their industry and their own income are greatly reduced, as in the cases of teachers and autoworkers.
"One of the challenges physicians face, as we move forward, is that physicians have done a terrible job communicating the positive health outcomes they are producing, and society is enjoying both historically high levels of longevity and historically low levels of these specific mortalities, including cardiovascular disease and many forms of cancer. Regrettably, many policy makers see healthcare dollars as a cost rather than an investment, one of the best investments one can make.
"Until the physician's role of advancing the health of society is more widely appreciated, physicians will increasingly face external efforts to reduce to their incomes with major negative consequences for the profession and society as a whole."
Contrary to my perception, Dr. Hughes feels the physician shortage represents an opportunity for medical students when deciding on a specialty area. Selection of a less popular specialty, such as one primary care, will give the physician greater bargaining power in future income and potentially greater influence over the future of the specialty.
We both agree that one of the major challenges continues to be that students with increasing debt burdens are not choosing primary care specialties because of the lack of recognition and decreased reimbursements that primary care physicians face currently. Unfortunately, this trend may continue, at least in the near future.
So the question remains: What can physicians and other healthcare providers do to contribute to a more positive future in this new era of healthcare?
Take-home points from Dr. Hughes and myself:
- Become knowledgeable about the economic issues affecting healthcare on a local, regional, and national basis, because our healthcare challenges can be better addressed and better outcomes achieved with physician involvement
- Mobilize colleagues to remain abreast of and influence the changes that are affecting provider's ability to render quality and timely healthcare
- Don't become cynical! Cynicism will marginalize physicians and reduce their ability to positively impact the future of American healthcare.