10 Ways Market Changes Will Reshape Physician Practices

Laura P. Jacobs, MPH


November 07, 2012

In This Article

Not Operating Alone Anymore

5. Consolidation at All Levels

Recent transactions of publicly traded healthcare organizations (for example, the Wellpoint acquisition of Amerigroup, the Aetna acquisition of Coventry, and the DaVita acquisition of Healthcare Partners) indicate payers and providers positioning for the continued rollout of healthcare reform. Payers have acquired other payers with expertise in Medicaid and/or Medicare managed care; and, in DaVita's case, a specialty provider seeks to acquire the expertise in population management of a group experienced in managed care.

In addition, at local levels, health systems are merging. Medical groups are merging with one another or being acquired by hospital systems. Consolidation is occurring due to need for capital, interest in acquiring expertise, seeking operating efficiencies, as well as seeking a broader market presence. For physicians, the question will be: Who is likely to be the "consolidator" in your market and what role is in your best interest to play as new partnerships emerge?

6. Health Benefit Exchanges Are Coming to Your State

As part of the effort to extend health insurance to all, the PPACA calls for the implementation of insurance exchanges across the country by 2014 -- either developed by each state or the federal government. Think of "Expedia" for health insurance: a Web-based portal to assist individuals to select the insurance product that fits their needs and budget.

Because the individual mandate was upheld by the Supreme Court, all states are in some process of evaluating their plans for these exchanges. Some will not implement them, in which case the federal exchange will be provided. In some cases, private exchanges are being introduced.

The relevance to physicians is in the fact that health plans are now forming the provider networks that will be the basis for the health insurance products sold through the exchanges. In some cases, these networks will be limited; those outside the network will not have access to the newly insured population. Physicians must pay attention to the activities in their state regarding the evolution of the exchange, note payer activities, and determine the implications for their practice.

7. Dual Eligible -- The Next Frontier for Managed Care

The poor elderly or disabled -- covered by both Medicare and Medicaid ("Medi-Medi" or the "dual eligible") -- are the focus in many states of initiatives to better manage both the care and costs for this population.

For many physicians, particularly those with a heavy Medicare population, it can be surprising to realize how many of these patients are dual eligible because their physician reimbursement is largely paid by Medicare. But as some states are exploring demonstration projects that move these patients into managed care plans, it can potentially change both payment mechanisms and referral patterns for physicians in and out of the networks.

Find out what is happening in your state and local region pertaining to these patients, and analyze your payer mix to determine your current reliance on this patient base; there may be further changes in store for your practice than you realize.