The 21st Century Renaissance: A New Healthcare in the United States (Part 9)

The 21st Century Renaissance: A New Healthcare in the United States (Part 9)

The 21st Century Renaissance: A New Healthcare in the United States (Part 9)

How Will Physicians Recover Post-COVID 19?

In our previous blog, we closed it with the warning, “Doctors will only survive if, and when, they realize that the outdated business model of the 20th century will not work.  We have ‘crossed the Rubicon’ and we cannot return to a pre-Covid healthcare system.”

It has been six (6) months since many parts of the United States started to lock-down and self-quarantine. In the U.S., the death rate has dropped dramatically, yet according to the Centers for Disease Control, we just passed 200,000 COVID-19 deaths. Today, parts of the U.S. are slowly coming back online, and even in our home state of Florida, we are starting to see some improvement. While the re-opening will understandably be slow, the impact in some industries will take years, possibly a decade, to return to January 2020 normal, if that is even achievable.

Previously, we reported between 10% and 20% of primary care physicians were seriously considering permanently closing their practices and the same fraction were looking to sell or join a hospital or large group practice. I have advised those physicians who have contacted me that hospitals manage medical practices very differently and they should remember that hospitals are in the business of providing services and hospital rooms. Though hospitals collectively employ about 45% of all physicians in the U.S., their model is, with rare exception, an encounter-based financial structure. This model has contributed to the severity of the COVID-19 impact as “elective” or scheduled procedures were delayed either by the hospital or by the patient due to concern over exposure to COVID-19.

In a world, particularly a Medicare and Medicaid world, that is driving to establish value-based care, most hospitals are ill-equipped administratively and procedurally to adapt. As a point of reference, physician practices that had most of their business based on a value-based care payment model increased from 23% in 2015 to 34% in 2017.

The trend to drive to a new physician payment model does not include the hospitals hiring more physicians. On the contrary, we expect major reduction in staff at hospitals as they right-size the physicians and shrink their cost structure.

Over the last 30 years, we have witnessed many innovative physician organizations that extend well beyond small and large group practices. In the 80’s and 90’s, we witnessed the creation of large Physician Hospital Organizations (PHOs); then Independent Physician Associations (IPAs). Throughout the decade of the 1990s, we saw the emergence and destruction of PPMs or Physician Practice Management organizations, that led to MSOs or Management Services Organizations (Phase I), the PSNs or Provider Sponsored Network, and recently the re-emergence of MSO (Phase II).

During the last 10 years, we have seen the explosion in the marketplace of hundreds of healthcare technology companies, mostly in the Electronic Medical Record (EMR) or Electronic Healthcare Record (EHR) space.  We have even seen the term change from EMR to EHR as the functionality expanded well-beyond the mere digitization of the patient medical record.

However, what we have not seen is an organization that unifies doctors, patients and technology solutions AND is prepared to do that in a world where payors (government and insurance companies) want to share the financial risk and reward with those providers of care; collectively though, not on an individual basis. For larger groups of providers, we anticipate a demand that will not only use the “best practices” where payment is not only the sole objective, but also the use of the “best of breed” technology to expand their influence and increase the quality of patient care. Through the COVID-19 experience, we have found that despite the billions of dollars of our taxpayer money spent over the past decade on digitizing medical records, patient touch is just as important as the technology.

The way physicians provide care will likely NEVER return to what it was pre-COVID. Not only will we use more remote care, medical offices will change forever. Thanks to the increased use of telemedicine portals, millions of square feet of MOBs or Medical Office Buildings are obsolete as of TODAY.

So, to physicians, I implore you to recognize that you have had a certain state of myopia and you have been missing “the forest for the trees.” The practice of medicine and health is changing right before our eyes – we are undergoing a true ‘cultural’ renaissance in healthcare, one driven by the response to COVID-19 pandemic. The future belongs to a more “OMNI-CARE” approach that most assuredly is not only absent in hospitals, but also may impact hospital admissions because this renaissance will include more constant and real-time remote patient monitoring with fewer scheduled office visits. The good news is, you will get paid by providing great wellness, not just office encounters.

We are witnessing “OMNI-CHANNEL” in retail with brick and mortar stores like Walmart accelerating into the pick-up and delivery model – just as we witness online market places like Amazon expand into brick and mortar and on the verge of their using lockers for pick-up at some of their physical locations.

We are witnessing a rebirth of healthcare that is more dependent on technology, patient engagement and on-demand care, any time anywhere.

In our next blog, we’ll discuss what an “OMNI-CARE” physician practice organization would look like.

-Noel J. Guillama

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