

With the 21%+ sustainable growth rate cut in place, it will be interesting to see the next step. We believe there will be a permanent solution, but it will not be pretty. In particular, we believe that specialists are at risk, the most likely victim of the budget cutting knife.
Judging by the interest in our physician compensation webinar, this is a hot topic. Considering that Medicare rate cuts are discussed annually, and that operating costs continue to increase, some private practices are left wondering how they?re going to survive. The net result is that physician incomes are declining and the market trends indicate that this will continue. Faced with increased operating losses, managers of hospital employed physician networks are struggling to align physician compensation with productivity. This very often puts the physicians and the administration at odds. The following points will help you craft a structured, on-point message and strategy to manage physician compensation issues.
Many hospitals or health systems with an employed physician network struggle to find additional ways to drive profitable volume through their primary care practices and increase referrals to their specialty practices that will generate inpatient volume. When these practices are not seeing the volume or payer mix needed to support them, physician retention often becomes an issue, as the employment model is not sustainable without sufficient production.
Accountable Care Organizations (ACOs) are receiving increased interest, from the Brooking-Dartmouth demonstration sites to the interest in Washington related to the floundering reform efforts. ACOs are designed to hold a group of physicians and other providers responsible for the quality and cost of care provided to a discrete population. Holding providers accountable for results seems an obvious next step in the evolution of the healthcare system.
