As the health care delivery system in the U.S. is being reshaped by industry megatrends like health care consumerism, digital health technologies and value-based reimbursement, no stakeholder is feeling the magnitude of that transformation more than physicians and their medical practices. Ten recent industry developments illustrate that impact and how physician practices are responding to those trends now and in the future to maintain the health of their patients and the business health of their practices.


Financial Performance


Operating losses less at private physician practices than at system or hospital-based practices

That's according to a report released by the American Medical Group Association. The report is based on an AMGA survey of 50 medical practices representing more than 10,000 doctors. The report said medical practices owned by health systems or hospitals suffered an operating loss of $210,000 per physician in 2015. By comparison, private medical groups incurred an operating loss of just $14,000 per physician last year. The AMGA gave no explanation for the discrepancy but did note that the practices in its survey employed 17 full-time equivalent positions for information technology services for every 100 physicians. “Factors contributing to the prominence of IT FTEs may be the growing need for the ability to manage quality and service metrics and preparation for risk as the market shifts from volume to value,” the AMGA said.

Physicians generate an average of $1.6 million in revenue per physician for their hospitals

That's according to a survey by Merritt Hawkins, the Irving, Texas-based physician recruitment firm. The $1.6 million includes inpatient and outpatient revenue generated by one physician for his or her affiliated hospital this year. That's up from $1.4 million in 2013, the last year the firm conducted the survey. Of the 18 specialties in the survey, orthopedic surgeons topped the list of revenue-generators with an average of more than $2.7 million per doctor, followed by invasive cardiologists ($2.4 million), neurosurgeons ($2.4 million) and general surgeons ($2.2 million). Primary care doctors generated an average of $1.4 million in revenue per physician for their hospitals. Doctors “drive the financial success of hospitals, even in a health care system that is evolving away from volume-based payments and toward value-based payments,” Merritt Hawkins said in a press statement.


Practice Ownership


35.1% of physicians belong to medical groups that have 100 or more physicians

More physicians are joining larger medical practices, according to a new physician consolidation study in Health Affairs. Researchers from Leavitt Partners, the Salt Lake City-based health care consulting firm, compared physician data from 154,726 Medicare-certified practices in 2013 with physician data from 152,328 Medicare-certified practices in 2015. The proportion of doctors practicing in medical groups with 100 or more physicians rose to 35.1 percent in 2015 from 29.6 percent two years earlier. Meanwhile, the proportion of doctors practicing in medical groups with nine or fewer physicians dropped to 35.3 percent last year from 40.1 percent in 2013. The study cited several factors driving the trend: the financial and technical challenges of running a small practice; value-based reimbursement models like population health that require larger patient panels to be successful; and the growing preference by younger physicians to work in larger groups.

141,000 physicians are employed by hospitals or health systems

The number of doctors employed by hospitals or health system rose nearly 50 percent to 141,000 in July 2015 from 95,000 in July 2012, per a report from the Physicians Advocacy Institute and prepared by Avalere Health, the Washington-based health care consulting firm. That means 38 percent of all practicing physicians worked for hospitals or health systems last year versus 26 percent just three years earlier. The number of medical practices owned by hospitals or health systems rose to 67,000 in July 2015, or 26 percent of all practices, from 36,000 in July 2012, or 14 percent of all practices, the report said. The PAI said the shift to hospital ownership from independent ownership “can alleviate certain burdens of independent practice” but raise treatment costs for patients and the overall health care system.


Information Technology


Multispecialty group practices spend $32,500 per doctor on information technology

That's up more than 40 percent over what multispecialty group practices spent on health IT per doctor in 2009, according to a report from the Medical Group Management Association. That $32,500 figure includes what each physician-owned practice spent per doctor in 2015 on IT equipment, staff, maintenance and other IT-related expenses, the MGMA said. The MGMA attributed the boom in IT expenses to the HITECH Act, which created incentives for practices to adopt EHRs, investments in new digital technologies like online portals that connect physicians to their patients and the growing complexity of health IT systems that require additional IT staff and expertise.

Physicians spend 49.2% of time they're in the office on EHR and desk work

An observational study of 57 physicians in medical practices in four states found that they spent 27 percent of their total time in their offices on “direct clinical face time with patients” and 49.2 percent of their time on “EHR and desk work.” The American Medical Association conducted and funded the study, which was published in the Annals of Internal Medicine. When seeing patients in exam rooms, the physicians from four medical specialties - family medicine, internal medicine, cardiology and orthopedics - spent 52.9 percent of the exam room time on direct clinical face time with patients and 37 percent of their time on EHR and desk work.


Digital Health


85% of physicians say digital health tools have potential to improve patient care delivery

That's according to a survey of 1,300 physicians by the American Medical Association. The survey asked a representative sample of primary-care doctors and medical specialists about their opinions and use of digital health technologies in seven areas: clinical decision support; consumer access to clinical data; patient engagement; point of care/workflow enhancement; remote monitoring and management for improved care; remote monitoring for efficiency; and tele-visits/virtual visits. Overall, 31 percent of the physicians said the tools provide a “definite advantage” in improving patient care, and 54 percent said they provide “some advantage.” The top three reasons doctors said they are attracted to digital health tools were: improves work efficiency (82 percent); increases patient safety (80 percent); and improves diagnostic ability (79 percent). Currently, the most frequently used of the seven tools were technologies that give patients access to their own clinical data (53 percent).

58% of consumers share medical information with a medical professional via mobile device

Nearly six out of 10 consumers said they have shared personal medical information with a medical professional electronically via their smartphone, mobile application or wearable device, according to a survey of 2,000 consumers by Ketchum, the New York-based public relations firm. Some 25 percent said they've emailed or texted a photo of a medical issue to their doctor. “This study points to a shift in people's attitudes and readiness to use technology to manage their health,” Ketchum said in press statement, though acknowledging that 63 percent of the people it surveyed said they still prefer face-to-face interactions with health care providers over tech interactions.


Value-Based Reimbursement


42% of doctors say standardized clinical performance measures central to VBR acceptance

A survey by the Deloitte Center for Health Solutions asked 600 physicians to rank 10 practice considerations that would make them more likely to accept value-based reimbursement arrangements. At the top of the list - cited by 42 percent of the respondents - was having a standardized set of quality measures across all payers to track doctors' clinical performance. Rounding out the top six considerations were: being part of a larger organization to spread the risk (39 percent); being part of an organization that provides comprehensive resources for all clinical/nonclinical activities (36 percent); easy-to-use patient engagement tools (33 percent); transparent financial terms in risk-based arrangements with payers (30 percent); and having advanced data analytical and monitoring tools to identify and track high-cost patients (29 percent).

42.8% of physicians say at least some of their compensation is value-based

A survey of more than 17,000 physicians conducted by the Physicians Foundation found that 42.8 percent said at least part of their compensation is tied to value-based or quality-based metrics. Some 45.1 percent of the respondents said none of their compensation is performance-based; 12.1 percent of the physicians said they were unsure. Of those who said they receive value-based reimbursement, 77.2 percent said less than 20 percent of their compensation is tied to value-based or quality-based metrics. “The survey strongly indicates that considerably more physician support and participation will be required to achieve the goals of health care reform and to transform the health care system from one based on volume to one based on value,” the group said in its report.

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