Money vs. Medicine: Physicians Face Dilemma in Reform Proposals

Call them Yin and Yang.

Yang, at the Medical Group Management Association's annual meeting in Denver, was MGMA President and CEO William Jessee, MD. He told the assembled group practice managers that they and the physician practices they represented could be a positive force for change in healthcare. They could help spread the gospel of information technology and telemedicine, and support the changes that Jessee said were needed in the healthcare system: universal coverage, cost control, patient safety, and an adequate supply of health workers. The industry, he said, must reduce administrative costs, and "difficult conversations" must be held with patients about end-of-life care, which consumes a quarter of Medicare outlays.

Yin was Matthew Montgomery, who spoke at MGMA on behalf of Buxton Co., a "consumer analytics firm." Montgomery's theme was that physician practices should figure out how to attract the most profitable patients. In a session entitled "Not All Patients Are Created Equal," Montgomery offered a number of tips on how to do that. He suggested that physicians look at the kinds of insurance that their patients have and the services their best patients typically need. To find patients who yield a high return on investment, he said physicians should consider the demographic characteristics, including age, education and income, of people in the area from which they expect to draw patients. He also advised practices to buy customer relationship management (CRM) software to profile their patients, using data in their practice management systems and electronic medical records.

Except for the last suggestion, Montgomery's ideas are old hat in most physician practices. Physicians naturally congregate in areas that have a lot of well-insured patients and tend to avoid areas where there are many Medicaid and uninsured patients. Many practices do not take Medicaid, and if they do accept the uninsured, they frequently demand payment upfront. Physicians will sometimes drop health plans that pay too poorly or too slowly.

So how is Ying related to Yang? They are the two poles of the physician community-the side that wants to improve the system and is willing to accept major changes to accomplish that goal, and the other side, which is determined to keep doing things the old way, with the primary goal of optimizing income. Of course, most people-whether they're physicians or not-would prefer to increase or least maintain their incomes. But unless physicians accept fundamental changes in how they are paid--changes that will require altering their work habits and even how they view patients--healthcare reform will be impossible to achieve.

I had a conversation the other day with James Walker, MD, chief health information officer of the Geisinger Health System in Danville, PA. Often held up an as example of how to do things right in health care, Geisinger is ready for whatever reimbursement changes may be rolling down the pike. It is highly computerized, does disease management, and knows how to manage care. Walker, who's on the HIT Standards Committee of the Department of Health and Human Services, says he's convinced that HHS is going to do whatever it takes to move Medicare toward quality-based reimbursement. And once that begins to happen, he says, physicians will adapt.

"Those private docs are good business people, and once there's a business case, they'll be leading the charge."

Walker is right about that. But will most physician practices be prepared for the enormous changes in their processes that will be required? Today, the answer would be No. Practices will need a lot of help to make this transition, and I wonder where it will come from.