Bad Moon Rising

I see the bad moon arising,

I see trouble on the way…

Thus begins the classic Credence Clearwater Revival song, Bad Moon Rising.

You may be aware that the Congress has again failed to forestall a dramatic reduction, yes a reduction, in Medicare payments to physicians that is built into its physician payment system. Overall, physician payments under Medicare will be reduced by 21.2% if no action is taken. Imagine your business facing a 21.2% price reduction. Never mind, it’s no fun thinking about closing the doors.

So, this morning’s headline in the Courier-Journal, “University of Louisville doctors threaten to leave Humana Network” was an ominous sign of things to come for our physician community.

I know from experience that there are always two sides, at least, to every conflict and it’s difficult to discern the facts from a newspaper article. Having said that, if it is indeed true that Humana is asking the docs to take a 10% reduction in payment, there is indeed a bad moon arising.

No matter how this latest dustup turns out, the message is clear for Louisville’s physician community. Doctors need to consolidate, build market share, and therefore market clout, to position themselves to negotiate with the large insurers from a position of relative strength. But that’s not enough. When an association of 460 physicians cannot reach terms with an insurer without applying public pressure, it is clear that scale is insufficient.

Docs also need to address a variety of other trends and environmental imperatives. For example, how would the public (patients) view the quality of care provided by a doc? Moreover, how do the insurers view quality (hint: read cost)? Has the practice adopted electronic records and are they used effectively to improve outcomes and lower cost? Does a method exist that would allow physicians the opportunity to participate in the cost savings that they can surely bring about?

All of these issues and more need to be addressed by docs and it needs to happen soon. The nature of the current payment system, individual practice operations and simply a lack of time to plan, all conspire to keep physicians from assessing changes, planning an approach and executing effectively.

All of these major trends; reimbursement, quality, demographics, patient preference, information technology and so on, require thoughtful analysis and action on the part of the docs. The CCR songs lines include,

hope you got your things together,

hope your quite prepared to die,

looks like we’re in for nasty weather…

Are you ready?