Physician payment reform: How to take charge of your destiny

Apr 01, 2011

There are lots of savings to be extracted from the system if physicians can work together to remove excessive, unnecessary, and/or unnecessarily expensive treatments.

There was a lot of discussion about how primary care physicians need to be paid more to manage patients. The biggest concern of the specialists was that those primary care dollars would be extracted from specialists' income-the same fear we've all discussed before in conversation after conversation.

In reality, it does not have to be that way. There are lots of savings to be extracted from the system if physicians can work together to remove excessive, unnecessary, and/or unnecessarily expensive treatments. Futile end-of-life care, very expensive drugs that have marginal value (or can be replaced with less expensive alternatives), poorly controlled chronic diseases, and hospitalizations and ER visits that could be avoided are just a few of the opportunities for cost savings.

With the shared savings contracts to be offered by Medicare, we actually can make the physician's share of the pie bigger. The biggest hurdle is for physicians to decide how to split the pie. The next big hurdle is for physicians to remain in control so that contracts with expensive vendors, such as hospitals, can be ratcheted down. Hospitals, in the majority of cases, are not your friends and should be considered a vendor, not your partner.

Medicare wants to bend the cost curve and would be happy to simply decrease the percentage of increase from year to year. First and foremost, Medicare realizes that physicians are the only ones who can assist in accomplishing that goal. That's the reason the law is structured so that physicians are in control of accountable care organizations (ACOs). As an aside, that's also one of the reasons hospitals are buying physician practices. In order to protect their income and participate in the cost-savings contracts, hospitals will have to be aligned with physicians. With ownership comes control.

Yes, payment reform is occurring now and in many forms. Many physicians, including urologists, are selling their practices to hospitals. Others have joined much bigger single-specialty groups or are being bought by multispecialty groups. Many of these arrangements pay salaries as well as productivity incentives.