12 Changes That Will Affect Doctors' Income in 2015

Leigh Page


November 25, 2014

In This Article

6. Retail Clinics Offer New Competition

Retail clinics—housed in pharmacy chains, such as Walgreen's, CVS, and Rite-Aid—have shown a great deal of growth but have also encountered pushback from the medical community. From 2007 to 2009, visits to retail clinics grew by 400%, according to a report[9] in Health Affairs.

Staffed mostly by nurse practitioners who closely follow clinical protocols, these clinics basically treat five symptoms or conditions: sore throats, ear infections, sinus infections, bladder infections in women, and conjunctivitis. Retail clinics are open when physicians' practices are usually closed. According to the Health Affairs study, almost one half of patients come in off-hours. And retail clinics are less expensive: The price of a visit is about $75, compared with $150 at many urgent care clinics, according to Thomas Charland, CEO of Merchant Medicine, a Minnesota-based consultant on walk-in healthcare. Almost all retail clinics, he added, accept health insurance.

Although some physicians' offices offer same-day appointments, Charland said that retail clinics are a step ahead, offering immediate care for walk-ins. Some physicians view the clinics as a threat and tell their patients not to use retail clinics, he said. According to a RAND Corporation analysis,[10] some doctors are concerned that retail clinics are skimming patients who are less costly to treat, but other doctors are relieved not to have to treat such simple cases. Meanwhile, the AAFP is concerned that the clinics could fragment healthcare delivery, because patients might not report their visits to their PCP.

Rather than fight retail clinics, Charland advises doctors to forge reciprocal referral relationships with them. The website for CVS' MinuteClinic lists its affiliations with regional health networks, including the Cleveland Clinic. Charland added that some doctors' offices are trying to mimic retail clinics by allowing walk-ins. A walk-in with a sore throat is sent directly to a nurse, he said.

7. PCPs Due to Lose Enhanced Medicaid Payments

When 2015 starts, PCPs are in for a tough beginning. Enhanced Medicaid payments for PCPs, which brought their reimbursements up to Medicare levels, are scheduled to stop, and Medicaid reimbursements for PCPs will fall back to their old levels, which are on average about 40% of Medicare.

A few states will continue to provide the enhanced payments out of their own funds, and Congress is considering a bill to extend federal funding for enhanced Medicaid payments. Dr Wergin has been campaigning on Capitol Hill for the bill on behalf of the AAFP, and he said it has a 50-50 chance of passage.

The extra money is crucial at a time when six million people have been added to the Medicaid rolls, partly as a result of the Medicaid expansion under the ACA. Dr Wergin said that PCPs couldn't afford to see them all at the lower rates. "If parity with Medicare goes away, family physicians have to make a business decision," he said. "Can they take as many Medicaid patients?"

Unlike PCPs, specialists never got the enhanced Medicaid funding, and many of them already strictly limit the number of Medicaid patients they see. "We've seen a huge increase in Medicaid patients in the past year or so," said Pat Howery, administrator of Colorado West Otolaryngologists in Grand Junction. To financially protect itself, the practice has been limiting its four ENTs to two Medicaid patients per day.

This limit is a matter of financial survival, Howery said. Commercial insurance pays $119 and Medicare pays $73 for a basic office visit, but Medicaid pays only $52, which is below cost. "If our physicians were taking nothing but Medicaid patients, they couldn't bring home any income at all," he said. "In fact, they'd have to give us back some."


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