Ron Howrigon is the President and Founder of Fulcrum Strategies, a contract negotiation and practice marketing firm based in Raleigh, NC. Ron has a long history in the healthcare industry that includes work with thousands of physicians across the country. He’s also the author of Flatlining: How Healthcare Could Kill the U.S. Economy.
Ron took some time to talk with Continuum about recent efforts to repeal and replace the Affordable Care Act. Here, he talks about how physician practices might be impacted and how to plan in a time of uncertainty.
Continuum: Thank you for taking the time to speak with us today. Let’s start with what you’re hearing from physician practices about their areas of greatest concern as Congress proceeds with its efforts to repeal the ACA.
Ron Howrigon: The two biggest concerns I’m hearing are: will we go back to where a larger percentage of people don’t have any insurance, and is this going to cause more financial responsibility to be pushed on the patient.
Continuum: Talk about some of the gains physicians have seen under the ACA. Have they generally experienced a drop in uncompensated care as a result of more people having insurance?
Ron Howrigon: Yes. And I think definitely everyone has seen at least some degree of reduction in uncompensated care. It highly depends on specialty. For example, emergency medicine physicians may have been the physicians who were providing more uncompensated care than anyone else, and they pick up that increase when there’s less uncompensated care. But almost everybody I’ve talked to has seen the effects of the ACA and, in fact, that the uninsured population went down.
Continuum: Even though more people now have insurance, patients have generally been facing increased of out-of-pocket costs, and there’s reason to believe those costs could increase. What systems or practices could help physicians prepare to work with patients bearing the brunt of more medical costs?
Ron Howrigon: The best practice scenarios I’ve seen are really twofold. One is trying to do as good a job as you can up-front informing the patient of what their expense may be. If you ordered an MRI and you can see the patient has a high-deductible plan, try to counsel them and let them know that if this hits their deductible, it could cost $1,000, and ask whether they’re prepared for that. That helps a lot.
On the back end with regard to patient bad debt, it’s important to consider whether it is good practice to establish limits. That may mean telling a patient they can’t come back for the next visit unless they get on a payment plan. It’s an extremely difficult thing for doctors who went into medicine to care for everybody to put business practices in place that don’t [allow them to] care for everybody.
The advice that I give practices is this: I understand you’re here to provide care. But if your business fails, you won’t be here to provide care for anybody. So understand that you wouldn’t expect the plumber to come to your house and fix your pipes and never get paid. You should have some level of expectation around the same thing. If you work your way out of business, that doesn’t help anybody.
Continuum: Do you anticipate that changes in physician payment, including the Medicare Access and CHIP Reauthorization Act (MACRA), will be altered in this environment?
Ron Howrigon: The way the environment sits today, I think it’s going to be very difficult to have some of those systemic changes.
Payment reform remains a huge open item. When he was a surgeon, and when he was in Congress, Dr. Tom Price [now the Secretary of Health and Human Services] was never a fan of value-based payments, such as MACRA and MIPS. So I think there should be a lot of people looking at that very carefully. Did he change his mind about that? Or now that he has the ability to either change the [programs] or get rid of them and replace them with something else, which he can, is that going to happen?
Continuum: What’s your prognosis for the future?
Ron Howrigon: I don’t see anything right now that was either in the ACA or that’s being discussed in this replacement that truly, fundamentally addresses the cost problem. So until we do that, as a friend of mine who is a surgeon is fond of saying, we’re just putting Band-Aids on bullet wounds here.
And that should scare everybody.
What do physicians do with that today? I would say for those running a physician practice today, prepare your practice like you’re in an industry that could have a serious downturn.
If you’re seeing that this could get dim in a couple years and things could get rough — like what happened in the housing industry — maybe you don’t build that next building right now, or maybe you don’t expand where you’re not quite sure you can. Make sure you pay down your loans. I live in North Carolina. It’s sort of like when you see the hurricane coming you batten things down, and you ride it out.
Here are two specific tips I suggest for practices thinking about growth in this time of change:
- Know your patients. In preparation for a tough road ahead, practices need to look at their patient mix and understand the differences between these patients and identify what they look like. Other industries spend lots of time and money profiling and segmenting their customers. They want to know as much as possible about their customers and why they do or do not choose to purchase their products or services. When it comes to segmenting your patient population, it’s the same concept. Make sure your practice is set up to accommodate people with a good job and good insurance. Incentives, like offering different hours, providing exceptional customer service, and improving efficiency, are all factors that will be necessary in order to survive in the future healthcare environment.
- Operate from a place of knowledge. Another way to prepare for the future is to make sure your practice has a well-thought-out, well-executed marketing plan that is specifically designed to attract the insured patients who have choices regarding where they seek medical care. For primary care practices, effective marketing means clearly understanding the demographic you want to reach, deciding how to reach them, and crafting a message that will appeal to them. For specialists, effective marketing means not only marketing to a specific patient population but also marketing your services to your referring physician community in the form of a physician outreach program.
The main thing is to keep an eye on this. What recently got announced is the Republican first phase; whatever comes out at the end of this is going to look nothing like that.