By Jordan Asher, MD, MS

The healthcare environment has undergone rapid change in a short period of time for an industry notoriously slow to adapt. Some of those changes include a shift to pay-for-value, increased focus on outcomes, and most recently a complete overhaul of the physician payment model for Medicare beneficiaries. Those of us steeped in care delivery have seen increased physician employment by health systems with simultaneous consolidation in other parts of the healthcare ecosystem, both horizontally and vertically.

The data is no different as it pertains to physician practices, where consolidation is also happening fast for all the same reasons. Historically, newly minted physicians would enter practice by joining a small to medium-sized group or just hang up their own shingle. However, such a model is no longer economically feasible, nor desirable. Work/life balance is critically important to new physicians, who have just finished their most intensive period of training. While many believe that younger physicians do not want to work as hard those who have started their own practices, it’s important to note that greater personal joy, having less burnout and greater work satisfaction is more important to younger physicians.

On the flip side, a large health system has advantages: stability, shared infrastructure, scaled process improvement, cost containment, higher quality, etc. The requirements under the Medicare Access and CHIP Reauthorization Act (MACRA) has also led to the realization that meeting the latest quality and improvement metrics requires capital and infrastructure. However, there are also downsides to physician consolidation. The Federal Trade Commission is concerned about the increased cost of healthcare due to stronger negotiation abilities of larger groups. This has played out in all sectors of the healthcare industry, validating fears.

There is another problem with the more consolidated distribution of physicians and healthcare services. With consolidation, the underserved and those living in rural areas will see a decrease in access.

As larger groups focus on their bottom line, services will likely decrease for certain areas and patient types. Consolidated groups tend to be in urban clusters. This is a driving force behind the recent Medicare Payment Advisory Commission (MedPAC) position concerning the need to readdress the fundamentals of the Merit-Based Incentive Payment System (MIPS). MedPAC has asked Congress to repeal the current legislation. The complexity of the current program and concern that the quality metrics as proposed will not lead to better outcomes is expected to create undue burdens on providers. These dynamics force providers to think differently about their current delivery models, further pressuring them to consolidate.

As we navigate the benefits of consolidation and the importance of smaller distributive delivery models, the imperative is to think about how to manage the dichotomy of the situation. This requires a pivot to ensure smaller practices thrive and continue to provide high-quality care to all. Since our population is heterogeneous, so must be the healthcare delivery model. Adjustments to current regulations are focused on such matters and on concerns of rural legislators. If consolidation continues at its current pace, we need to shift our focus to the distribution issue. Our goal should be to deliver value regardless of location. This value must contain the three components of greater quality, improved access, and lower cost. Other countries have implemented strong telehealth networks to accommodate populations residing in rural areas and ensure that higher-acuity conditions are prioritized at rural hospital sites. Another potential solution is to empower individuals with the education and diagnostic tools needed to self-diagnose and deliver self-care.

We can solve this distribution issue, but it will take better technology, education, legislative changes, and added incentives to provide the right care when and where it is needed. As our leaders in Washington grapple with both the design and legislative concerns, let’s hope they take an innovative and evolutionary approach. Recognizing a current model will not work and must be repealed is not the final solution. As with most complex questions, multiple answers are dependent on each other and solutions that might seem incongruent. If we truly want to deliver value to all those we serve, both near and far, we need to design not only better care models but also better distribution models. Fostering such creativity and outcomes that address the root causes of our current healthcare woes must be part of any new legislative agenda. The burden of responsibility to drive such changes falls on all of us.

Jordan Asher, MD, MS, is Chief Clinical Officer of Ascension Care Management

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