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Health Care Reform Memo: October 22, 2012

Deloitte Center for Health Solutions publication

The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: the evolving role of physicians in U.S. health care

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

One fall day in the sixth grade at Henry L. Barger Elementary School, my best buddy Jerry Myrick asked me to play golf with him after school. It changed my life.

I used his brother’s clubs, and from 165 yards out on Number 11 at Brainerd Golf Course, I hit a three wood to two feet and sank the putt. No one in my family played golf, so my elation met a tempered reaction at home as I declared my intent to pursue a career in professional golf. My dad counseled I would need to be a physician, because “they are the only ones who can afford to play golf.”

I will never forget that discussion: he told me that physicians were members of private clubs, and did not see patients on Wednesdays so they could play together. And he reminded me they lived in the nicest houses, drove the nicest cars, and sent their kids to Baylor School, McCallie, and GPS—Chattanooga’s most elite private schools.

His assessment was not grounded in envy; it was deeply rooted in respect for the profession. He held physicians in highest esteem. He deemed them uniquely equipped to solve health problems regardless of complexity. He trusted his doctors, and taught his sons to do the same.

Medicine is different than any other profession: the rigor of training, expectations of perfection, the trust conferred is perhaps unmatched by no other occupational group. Opinion polls place doctors highest for trust, along with teachers and small business owners, and understandably so. But it’s changing.

Many physicians mourn the passing of medicine’s good ole days when complete autonomy to apply their judgment in diagnosing and treating patients void of utilization reviews was granted. There were no performance report cards or questioning by patients. The profession zealously held to its core belief that medicine is both art and science, and aggressively protected itself against those with lesser training via licensing and scope of practice controls.

Physicians earn high incomes and deserve respect. Neither is likely to change. They are not delusional about the future. Our data show that physicians expect to practice in larger settings, anticipate future compensation will shrink, and understand they will provide services through team-based models that leverage information technologies and engage consumers directly. That’s the new normal. They get it.

I spent Saturday in Monterey, California as part of a medical leadership retreat. I did not hear resentment; I heard resolve that the profession should maintain its dignity and proper seat at the table as the new normal plays out. And I heard honest questions about how things will change, who will make the decisions, and how patients will be impacted. I tend to be direct in answering questions: I told them the good ole days will never return. But I also shared my view that physicians can play a key role in the new normal if willing to adapt to simple realities:

  • Costs are the issue. They can’t be avoided. And they’re too high.
  • Medical care will be team-based. And other professionals on the team are key to its success. It’s not just about “the doctor.”
  • “They” are neither patient nor patients; they are consumers. And they’ll use their buying power and readily accessible data to reward effective teams.
  • Employers and Medicare will be catalysts that drive changes. Stay tuned. They’ll not pay for unnecessary care nor reward suboptimal outcomes.
  • Bigger is necessary. Scale is essential to sustainability. Investments in technologies and information systems are essential to future viability.

My effort to be a professional golfer fell short…way short. My skillset on the links is better suited for casual weekend stress reduction. But my respect for the medical profession remains strong, even as it grapples with these challenging realities in the new normal.

Paul Keckely

Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

PS – At press time, lawmakers are discussing another suspension of the sustainable growth rate (SGR) payment formula that would cut physician pay from Medicare 27 percent in January. A one-year fix is on the table as well as a three-month fix (January-March 2013) that would align the fix with the end of the continuing resolution. Congress passed a ten-month patch in March 2012.
Coming soon: the Center will release “Understanding the SGR: Analyzing the ‘Doc Fix’”—Stay tuned

Implementation update

Study: premium support could raise premiums for most Medicare enrollees

A Kaiser Family Foundation study released last week that analyzed the impact of premium support on Medicare beneficiaries had it been implemented in 2010, concluding a majority (59%) would pay higher monthly premiums if they remained in the same plan while 41 percent would pay the same amount or less than they are currently paying. The study focuses on beneficiaries’ premiums for both private Medicare Advantage (MA) and traditional Medicare fee-for-service (FFS) plans, but did not take into consideration out-of-pocket spending, cost-sharing requirements, and premiums for supplemental insurance. Notable findings:

  • Traditional Medicare program: 53 percent of beneficiaries would pay on average $60 per month ($720 per year) in additional Medicare premiums and less than half (47 percent) of beneficiaries would pay the same amount under a premium support system.
  • Private MA plans: 88 percent of beneficiaries would pay on average of $87 per month ($1,044 per year) in additional Medicare premiums, of which 39 percent would see an increase in premiums by at least $100 per month.
  • Geographic variation: in 29 states and the District of Columbia, less than 15 percent of beneficiaries would pay an additional $100 or more in monthly Medicare premiums, and in five states (CA, CT, FL, NJ, and NV) more than 45 percent of beneficiaries would pay at least $100 more in premiums per month.

(Source: Kaiser Family Foundation, “Transforming Medicare into a Premium Support System: Implications for Beneficiary Premiums,” October 2012)

Study: Medicare Advantage payments will be 102 percent of traditional Medicare FFS

The Commonwealth Fund released an analysis highlighting significant cuts to MA funding in the Affordable Care Act (ACA) noting the following impact:

  • Reduces the amount of extra payments to MA private plans from $12.7 billion per year in 2009 to an estimated $1.4 billion a year relative to costs in traditional Medicare. Private MA plans will continue to receive higher payments than those in traditional Medicare plans.
  • Reduction in plan rebate payments will decrease overpayments to private plans by an estimated $640 million, the increase in both benchmarks and rebates to plans with high scores on the Medicare plan performance rating system will provide an estimated $2.1 billion in additional payments to high-performing plans.
  • Private MA plans will be paid an average of 102 percent of spending in traditional Medicare, but will vary widely
  • Plans are likely to place greater emphasis on tracking and improving their performance as they strive to qualify for bonus payments

(Source: Commonwealth Fund, “The Impact of Health Reform on the Medicare Advantage Program: Realigning Payment with Performance,” October 16, 2012)

Background: Section 3201 of the ACA restructured payments to MA plans by setting payments to different percentages of traditional FFS rates, with higher payments for areas with low FFS rates and lower payments for areas with high FFS rates, and requiring MA plans to return partial payments for plans with a medical loss ratio of less than 85 percent beginning 2014. Total cuts in payments to MA Part C plans vs. the current payments total $156 billion/ten years as part of the $716 billion in cuts to Medicare widely quoted in the Campaign 2012. Per the Congressional Budget Office (CBO), the Centers for Medicare & Medicaid Services (CMS) paid MA Plans on average 107 percent of traditional Medicare FFS rates, so the reduction reflects a cutback in rates paid to MA plans relative to what had been previously budgeted.

Study: notable increase in Medicare Advantage, Part D ratings

An Avalere analysis of CMS data on plan quality performance revealed that 28 percent of MA plans and 49 percent of Medicare Part D (prescription drug) plans improved their star ratings from fiscal year (FY) 2012 to FY2013. Of the 419 MA plans that received star ratings, 119 improved their star ratings while 50 MA plans received lower ratings. Eighty-three percent of the MA contracts that improved star ratings will receive a higher bonus payment applied to their benchmark plan for 2014, and 80 percent of MA plans which received lower quality ratings will see a decrease in their benchmarks as a result.

Background: per Section 3201 of ACA, beginning in 2012 plans will receive bonuses based on their quality ratings, which are based on a 5-star quality rating system. Plans with 3 stars will receive a 3 percent bonus, plans with 3.5 stars will receive a 3.5 percent bonus, and plans with 4, 4.5 or 5 stars will all receive a 5 percent bonus. Additionally, high quality plans operating in certain counties are eligible to receive a double bonus. According to the U.S. Department of Health and Human Services (HHS), 37 percent of enrollees are covered by 4 or 5 star plan and the percentage is expected to increase after the close of this year’s open enrollment period on December 7, 2012. (Source: Avalere Health, “2012 CMS Star Ratings: Availability of High Performing Plans for Medicare Beneficiaries”)

Related: Republican leaders of the Committee on Oversight and Government Reform expressed concern that HHS is using the Medicare Advantage Quality Bonus Payment Demonstration program as a way to offset MA payment cuts. Wednesday, Representative Darrell Issa (R-CA) and James Lankford (R-OK) sent a letter to HHS requesting documentation about…

  •  Limits on what the Secretary of HHS can spend on demonstration projects
  • The decision to exempt this demonstration from CMS’s own budget neutrality rules
  • The requirement that CMS obtain the evaluation of a statistical expert for demonstration projects
  • The decision to implement this demonstration as a three-year project that ends the MA on December 31, 2014
  • Conversations between and among any executive branch employees that refer or relate to the demonstration

CMS update: concerns over dual eligible demonstration projects

Per Section 2601 of the ACA, states can apply to participate in an up to ten year demonstration project that aims to improve care coordination for the dual eligible population (those eligible for Medicare and Medicaid) through a 1915 or 1115 waiver. These waivers are traditionally for Medicaid beneficiaries and allow states to enroll eligible individuals into managed care. States and advocates are concerned that CMS is moving too quickly to allow for effective implementation and that these demonstration projects will limit Medicare beneficiaries’ choice of providers. At the National Association of State Health Policy conference in Baltimore last week, a CMS official leading the demonstration project stated that it would not limit provider choice, as Medicare beneficiaries would have the option to keep their current coverage or move into managed care. The CMS official also reported that most states have requested to begin their demonstration projects in 2013, and the rest will begin in 2014. Twenty-five states have applied and only one application has been approved.

Employers challenging contraception requirement in courts

Friday, the owners of four scrap metal recycling companies in Missouri filed a lawsuit against the ACA’s contraception coverage requirement. The companies are represented by the American Center for Law & Justice.

Background: Section 2713 of ACA requires that health plans cover U.S. Food and Drug Administration (FDA) approved forms of contraception exempting religious organizations from the mandate. It is one of seven gender-specific preventive health services (e.g. domestic violence screening and counseling, breastfeeding supplies and annual preventive care, such as pap smears and pelvic exams) that insurers/plans have to cover. All seven fall under the Women’s Preventive Health Amendment.

Legislative update

Deficit Reduction Commission leaders launch education effort

In December 2010, the National Commission on Fiscal Responsibility and Reform submitted its report to the President outlining a number of spending cuts, tax reforms and revenue increases intended to reduce the national deficit. The featured focus: three dollars of spending cuts for each dollar of new revenues, and for Medicare, caps on its growth at 1 percent above the gross domestic product (GDP).

Last week, its co-chairs, Erskine Bowles and Alan Simpson, announced the formation of “a sophisticated, national campaign to encourage policymakers to pass meaningful debt legislation in the coming months.” Their “Fix the Debt Campaign” will launch ads in 25-35 states.

Senators urge HHS to require autism treatment in health plans, create national standard in essential health benefits coverage

Senators Kirsten Gillibrand (D-NY), Barbara Boxer (D-CA), Al Franken (D-MN), and Sherrod Brown (D-OH) sent a letter to HHS Secretary Sebelius requesting the agency require that all health care plans cover autism treatment by 2014. They requested HHS make applied behavior analysis (ABA) part of the essential health benefits package that must be covered under health care plans by 2014 thus creating a national standard to which states would be held accountable in oversight of health plan coverage.

Background: currently, 32 states require at least some form of autism coverage. These states can choose a benchmark plan that provides a portion of ABA coverage if they wish and states without a current mandate are not required to cover treatment at all. The American Academy of Pediatrics has endorsed the use of ABA treatments within a medical home, working closely with families when it is determined to be appropriate by a physician.

Senate Finance Committee requests documentation of fraud efforts using CMS new predictive analytics program

Last week, Senators Tom Coburn (R-OK) and Orrin Hatch (R-UT) sent a letter to Acting CMS Administrator Marilyn Tavenner requesting documentation about the CMS fraud prevention system (FPS) noting that CMS has missed the deadline for public accounting. Senators Coburn and Hatch indicated they did not receive a report by the deadline, despite several public speeches made by CMS officials that indicate more specific details about the FPS are available. The Senators gave a deadline of three days for CMS to publicize the report and reply to their concerns about provider enrollment.

Note: Section 4241(e) of the Small Business Jobs Act of 2010 requires CMS to report on the use of predictive analytics no later than three months after the first complete year of implementation and to obtain certification from HHS Office of Inspector General on the actual and projected savings from the use of this technology. CMS’ use of predictive analytics is an effort to pre-empt payments to providers likely to be fraudulent rather than “pay and chase” culprits after payments are made.

Senators request meeting with CMS and ONC staff to discuss Stage 2 Meaningful Use

Senators Richard Burr (R-NC), Tom Coburn (R-OK), Pat Roberts (R-KS), and John Thune (R-SD) requested a meeting with staff from CMS and the Office of the National Coordinator for Health Information (ONC) to discuss Stage 2 Meaningful Use requirements. Specifically, the senators are interested in the following:

  • Electronic health records’ (EHR) impact on the utilization of diagnostic tests
  • The agencies’ strategies to address any unintended consequences of EHRs
  • Whether inappropriate payments have been disbursed to providers who were already using EHR technology
  • Consequences for the Medicare program and EHR use
  • Agency strategy to ensure interoperability, not just meaningful use

Physicians urge Senators to replace SGR using industry principles

Over 100 organizations, sent a letter to Senate Finance Committee leaders Orrin Hatch (R-UT) and Max Baucus (D-MT) urging Congress to develop a replacement for the current SGR Medicare physician payment formula with a model that rewards physicians for improving the quality of patient care, and lowers the rate of growth in costs. The groups claim that the current system presents challenges to physicians who aim to improve care, and advises that physician-led, patient-centered care models be developed during the transition between the elimination of the SGR formula and implementation of a new system. The groups suggest that a new payment model consider that:

  • Successful delivery reform is an essential foundation for transitioning to a high performing Medicare program that provides patient choice and meets the health care needs of a diverse patient population
  • The Medicare program must invest and support physician infrastructure that provides the platform for delivery and payment reform
  • Medicare payment updates should reflect costs of providing services as well as efforts and progress on quality improvements and managing costs
  • The program reflects the diversity of physician practices and provides opportunities for physicians to choose payment models that work for their patients, practice, specialty, and region
  • The model encourages incremental changes with positive incentives and rewards during a defined timetable, instead of using penalties to order abrupt changes in care delivery
  • It provides a way to measure progress and show policymakers that physicians are taking accountability for quality and costs

Legislation to reform RAC program introduced in the House

Last week, Representative Sam Graves (R-MO) introduced the Medicare Audit Improvement Act of 2012, which would make several reforms to the Recovery Audit Contractor (RAC) program. Specifically, as drafted, the Act would:

  • Financially penalize auditors who consistently fail to meet program requirements
  • Increase transparency
  • Prohibit the Secretary of HHS from denying a repeal claim from a hospital based on a RAC decision under the AB Rebilling Demonstration
  • Allow hospitals who have incorrectly submitted claims for inpatient services to resubmit the claim as an outpatient service without penalty when appropriate
  • Require physician validation of medical necessity denials for Medicare beneficiaries

Background: the RAC program is designed to identify and remediate billing errors. The program was authorized in 2003 as a part of the Medicare Modernization Act of 2003, officially established by the Tax Relief and Health Care Act of 2006, and expanded to Medicaid per Section 6411 of the ACA. RACs are required to employ nurses, therapists, certified coders, and physician certified medical dosimetrists.

Response: last week, the American Hospital Association (AHA) sent a letter to Representative Graves commending the Act and voicing concerns about the current status of the RAC program, stating that because RACs are paid contingency fee payments based on the number of billing errors discovered, claims are being unduly denied and are costing hospitals time and money on the appeals process. The AHA believes this legislation “provides much needed guidance for medical necessity audits, keeping auditors out of making medical decisions that should be between patients and their physicians.” Furthermore, the AHA believes this legislation would address operational problems with the RAC program it states are “persistent and widespread.” (Source: AHA, Letter to The Honorable Sam Graves, October 16, 2012)

State update

State round-up

  • Facing higher rates for benefits, state authorities in Georgia are inquiring about withdrawal from the state employee health plan (SHBP). The Department of Community Health has raised coverage costs for employers and employees of the plan as the SHBP finished FY2012 with $16 million in surplus and no reserve funds. The plan is expected to have shortfalls in FY2013 of $89 million and $418 million in FY2014.
  • The American Beverage Company, along with several other associations and business groups, filed suit in New York on October 12, 2012 against the New York City Department of Health and Mental Hygiene and the New York City Board of Health in an attempt to overturn the law restricting the size of soda beverages to 16 ounces or less at certain establishments. The groups claim that the Board of Health in New York City did not have the authority to ratify the new rules unilaterally.
  • The Center for Healthcare Research and Transformation (CHRT) in collaboration with the University of Michigan, released a report finding that the state could save $1 billion over ten years and provide 600,000 residents with health insurance if the state chooses to expand its Medicaid program. The report also found added benefits would come to hospitals, which provide uncompensated care costing millions of dollars each year. (Source: Center for Healthcare Research & Transformation, “The ACA’s Medicaid Expansion: Michigan Impact—State Budgetary Estimates and Other Impacts,” October 2012)
  • An independent report concluded that if Texas chooses to expand Medicaid coverage, the state will see a rise in “economic activity, federal funds inflow, reduction in costs for uncompensated care and insurance, and enhanced productivity from a healthier population.” The report projects that for every $1 spent by Texas, $1.29 in “dynamic state government revenue” will be returned to the state over the first ten years of the expansion– essentially saving the state money in other areas of the budget that it would normally spend on Medicaid. (Source: The Perryman Group, “Texas Should Participate in Medicaid Expansion under the Affordable Care Act,” October 2012)
  • Tuesday, Massachusetts launched a statewide health information exchange (HIE), Massachusetts Health Information Highway, allowing providers to share health information electronically. As part of the launch, Governor Deval Patrick (D) sent his health information from Massachusetts General Hospital in Boston to Baystate Medical Center in Springfield. The state has received $16.9 million in funding to implement the HIE and has nine provider, two health care, and five vendor organizations as its Golden Spike participants, a group that includes early adopters within the state.
  • October 12, CMS announced that Coordinated Health Plans of Ohio, Inc. (CHP-OH) received funding through the Consumer Operated and Oriented Plan (CO-OP) program. CHP-OH received $129 million in funding through the program to increase health insurance coverage statewide. To date, a total of 23 non-profit organizations providing coverage in 23 states have been awarded more than $1.8 billion in funding through the CO-OP program.

Industry news

Walgreens announces medication management program to reduce hospital readmissions

Last week, Walgreens announced it will establish contracts with hospitals and health systems to provide medication management services to patients transitioning out of inpatient care in an effort to prevent excess avoidable readmissions for which hospitals will be penalized starting October 1, 2012. Patient’s will receive a review of prescriptions upon admission and at discharge, delivery of medication to their hospital room at the time of discharge, medication counseling for both the patient and caregiver, regularly scheduled follow-up calls, and round the clock access to pharmacy staff for the first 30 days after discharge. The program was piloted in three hospitals prior to its nationwide launch.

Trinity Health, Catholic Health East explore consolidation

Trinity Health and Catholic Health East announced late last week that the two systems signed a non-binding letter of intent to explore the creation of a unified health system that would leverage $13.3 billion in revenues and $19.3 billion in assets. According to the press release, the combined entity would touch 21 states with 82 hospitals, 89 continuing care facilities and home health and hospice programs, and would employ 87,000 workers including 4,100 physicians.

Pediatricians encourage removal of guns at home

Last week, the American Academy for Pediatrics (AAP) published a policy statement calling for increased gun safety restrictions to prevent firearm related injuries in children and adolescents. The statement expressed AAP’s concerns over the use of firearms in youth homicides and suicides, and advised that the absence of guns from children’s homes is the most reliable and effective way to prevent such injuries. According to the Centers for Disease Control and Prevention (CDC), in 2009 84.5 percent of all homicides involving people age 15 to 19 were firearm-related and 15,576 people under the age of 20 were treated for non-fatal firearm injuries. Suicide is the third leading cause of death for adolescents in the U.S., with firearms being the most common method used to commit suicide. AAP made several recommendations to include advising pediatricians to incorporate questions about the presence and availability of firearms into their patient history taking and urge parents who possess guns to prevent access to these guns by children.

Fungal meningitis outbreak prompts further investigation

The number of confirmed fungal meningitis cases CDC reported linked to the New England Compounding Center (NECC) reached 254 cases with 20 deaths in 16 states as of Friday. Thursday, the CDC and the FDA issued a press release confirming the presence of a fungus known as exserohilum rostratum in unopened vials of the drug, following a search of NECC facilities conducted earlier in the week. The FDA now suspects that several other drugs in addition to the epidural steroid injection produced by the company were tainted, and has distributed to state health departments nationwide a list containing over 130,000 shipping invoices for products distributed by NECC.

Related: sponsor of the Food and Drug Administration Innovation and Safety Act, Representative John Dingell (D-MI) wrote a letter to FDA Commissioner Margaret Hamburg requesting information on the number of products produced by NECC, the number of facilities and states that received these products and an updated estimate of how many patients may be at risk. Senator Richard Blumenthal (D-CT) requested information from U.S. Assistant Secretary of Defense, Dr. Jonathan Woodson, regarding a contract between the U.S. Army Medical Command and Ameridose, a Massachusetts company which shares ownership with NECC. According to the letter, the company supplied compounded pharmaceuticals to the intensive care unit of the Tripler Medical Center in Hawaii.

Quotable

“Healthcare, unlike almost all other industries, is considered a drain on a nation’s economy by policymakers. The bigger the portion of a nation’s economy that is devoted to health, the bigger the healthcare problem is perceived to be for that nation. If, for example, the percentage of GDP devoted to video games was rising, it would be ludicrous to be alarmed. On the contrary, video games would be viewed as a “growth” industry in which investors would direct capital to avail themselves of the profits achievable. However, no one views increased healthcare spending as a boon to an economy. Why is healthcare different? The chief reason for this incongruity stems from the fact that one’s healthcare is almost exclusively paid for by a third party while other goods and services are paid for directly by the consumer. The system of third parties receiving funds from which to disburse payments to healthcare providers and facilities creates a situation in which insurance premiums are considered as revenue, while healthcare is viewed as a cost, from the perspective of the third party.” 

— Dr. Amesh Adalja, “Let's End The Enslavement Of Healthcare Providers”, Forbes October 2012)

“Come 2014, the feds will be running two-thirds of the state health exchanges…so far, only 15 states and the District of Columbia have established the exchanges…of the remaining 35, seven have no intention of doing so, three say they’ll partner with the federal government, and 25 remain undecided. But only four of the 25—MN, MS, AL, NM—stand any chance of meeting the November 16 deadline.”

— Kiplinger Letter, October 5, 2012

“Remember, it was Republicans who made this law apply to Congress, not the Democrats who wrote the law.The Democrats were perfectly fine with applying Obamacare to the entire economy but leaving themselves out.  Despite passage of my amendment, Democrats still carved out exemptions for high-level staff, despite Republican efforts to undo the carve-outs, and Democrats refused to make Obamacare apply to the White House itself."

— Statement from Senator Charles Grassley, October 19, 2012, challenging Democrats regarding campaign ads suggesting Republicans seek repeal of the  ACA

“Utilizing a physician for a service that another professional is able to effectively and safely provide is a missed opportunity to utilize a lower cost provider…When a NP or PA can provide the same care to a patient safely and effectively, engaging a physician for this service is a missed opportunity to utilize a lower cost provider.”

— Bipartisan Policy Center, “What Is Driving U.S. Health Care Spending? America’s Unsustainable Health Care Cost Growth,” September 2012

Fact file

  • Physician work hours: the average number of hours physicians worked decreased by 5.9 percent, from 57 hours a week to 53, and doctors saw 16.6 percent fewer patients between 2008 and 2012. Hospital-employed physicians averaged 53.1 hours a week, compared with 54.1 hours per week for private practice physicians. Specialists worked 53.9 hours seeing 19.8 patients/day vs. primary care physicians who worked 51.1 hours seeing 19.2 patients/day. (Source: The Physicians Foundation,” A Survey of America’s Physicians: Practice Patterns and Perspectives”. September 2012)
  • Physician compensation trends 2003-2011: physician compensation has fared better than inflation in recent years and has had steady increases over the decade:

Physician compensation

Source: Bureau of Labor Statistics, National Occupational Employment and Wage Estimates

  • Mean annual wage, percent change from previous year, 2003-2011: decreases in compensation, adjusted for inflation, have been rare; primarily targeted to certain procedurally intense specialties where a Medicare payment adjustment is made:

Mean annual wage, percent change from previous year, 2003-2011

Source: Bureau of Labor Statistics (BLS), National Occupational Employment and Wage Estimates
BLS Definitions:
Teachers: education, training, and library occupations
Surgeons: physicians who treat diseases, injuries, and deformities by invasive, minimally-invasive, or non-invasive surgical methods, such as using instruments, appliances, or by manual manipulation
Family and General Practitioners: physicians who diagnose, treat, and help prevent diseases and injuries that commonly occur in the general population. May refer patients to specialists when needed for further diagnosis or treatment
Anesthesiologists: physicians who administer anesthetics prior to, during, or after surgery, or other medical procedure
Obstetricians and Gynecologists: physicians who provide medical care related to pregnancy or childbirth and those who diagnose, treat, and help prevent diseases of women, particularly those affecting the reproductive system. May also provide general medical care to women

  • Costs administrative vs. compensation:
    Costs administrative vs. compensation:

Source: American Medical Association, “Access to Physicians in Jeopardy as Rates Fall Further Behind Cost Increases,” January 2012

  •  Income expectations: question: next year, as a result of health reform, do you anticipate your net income (take home compensation after taxes) will…

Income expectations

Source: Deloitte 2012 Physician Survey

  • Expectations about the future physician workforce: question: based on what you know about the provisions of health reform, do you…
    Percent responding yes:

Source: Deloitte 2012 Physician Survey

  • Optimal practice setting: question: on a scale of 1-7, where “1” indicates the least financial success potential and “7” indicates the greatest financial success potential, please rate each of the following practice settings to indicate personal financial success potential for new clinicians who want to practice medicine. Percent rating 6 or 7:
  Total PCP Surgical Specialist Non-Surgical Specialist Other
An administrative role (i.e., Chief Medical Officer, Chief Executive Officer, etc.) in a large health care delivery system 53%
56% 54% 50% 37%
A concierge medicine practice that does not take insurance 47% 46% 48%  48%  42%
A large integrated health system that owns its own health insurance plan, hospitals and medical practices 33% 35% 32% 33% 32%
A large multi-specialty group that contracts with multiple plans and hospitals 32% 38% 22% 34%  47%
A large single specialty group that contracts with multiple plans and hospitals 32% 30% 25% 37% 42%
A large integrated health system that owns hospitals and medical practices and contracts with multiple plans 29% 33% 26% 28%  32%
A small single specialty group that contracts with multiple plans and hospitals 17% 15% 13% 21% 16%
As an employee working directly for a health insurance company offshore 16% 22% 16%  15% -
As an employee in an employer-sponsored clinic setting where care is provided directly to employees 9% 9% 10% 8%  11%
An academic medical center where I can teach, do research, provide clinical outpatient care and/or hospital medicine 9% 8%  9%  9%  5%
As an employee in a retail setting as part of a large retailer's health services offering 6% 8%  8% 3% 11%

Source: Deloitte 2012 Physician Survey

  • Primary care practice: question: over the next decade, do you think primary care services will be delivered by other medical professionals (for example, physician assistants, and nurse practitioners) independently or as an adjunct to physician services?

Primary care practice

Source: Deloitte 2012 Physician Survey

  • Primary care workforce: National Health Service Corps received $229.4 million in 2012 including nearly 4,600 loan repayment and scholarship awards to clinicians and students, and grants to 32 states in order to increase access to primary care. (Source: HHS, “Health care law increases access to primary care through the National Health Service Corps”, October 2012)
  • Nurse practitioners: there are 155,000 nurse practitioners (NP)practicing in the US; 34 states do not allow a NP to practice without physician supervision (Source: American Academy of Nurse Practitioners)
  • Income differential: 58 percent of surgeons think they should be paid 30 percent of more than PCPs vs. 14 percent of PCPs.

Source: Deloitte 2012 Physician Survey

National health reform: What now?

National health reform: What now?

At Deloitte, we continue to explore and debate the key questions facing 
the industry, and we look forward to helping our clients find and implement 
the right answers for their organizations. To learn more, visit www.deloitte.com/us/healthreform/whatnow today.

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