By Christopher L. Graff, JD, CPA, CHBC
As the political and structural momentum from Obamacare continues to dissipate, health care costs are beginning to serve as the primary driver in changes to our existing health care marketplace.
The effects of the efforts of some major healthcare insurance companies to drive business away from health care entities with costly facility fees, such as hospitals, likely will lead to the decentralization of health care services by fueling the growth of free-standing facilities such as diagnostic centers and ambulatory surgical centers (ASCs). Additionally, the continued push to expand Medicaid probably will contribute to the pressure to relax or even eliminate Certificate of Public Need barriers that currently exist in Virginia and North Carolina.
As cost containment efforts facilitate the decentralization of health care services, productive and entrepreneurial physicians currently working in integrated health care facilities as employees with compensation caps will find greater incentives to leave those facilities, in order to gain the ability to participate in ASC and free-standing diagnostic facility ownership.
Integrated health care facilities likely will face lower profit margins as a result of a lower diagnostic capture rate, which could also lead to a reduced need for these systems to continue to employ physicians. Further, non-physician providers who do not generally receive incentive-based compensation in integrated health care facilities should find better opportunities in a decentralized marketplace, especially nurse practitioners who have practiced for at least five years and no longer need to enter into collaborative practice agreements with physicians as of July 1 in Virginia.
Physicians and other providers seeking to leave hospital employment and strike out on their own should also find fewer practice start-up barriers and more revenue-generating opportunities than in recent years. The electronic medical records and practice management systems market is finally starting to mature, which is creating an environment of better service and more competitive pricing. In addition, concierge and semi-concierge, hybrid practice structures appear to have solidified a foothold in the spectrum of health care services and offer additional revenue-generating opportunities for the independent practice.
The growth of logistical efficiency in recent years is also contributing to greater free market influence on health care costs. Many companies large enough to self-insure, or to at least financially influence the health care decisions of employees, are negotiating prices for certain treatments and procedures with geographic limitations becoming less of a cost consideration in relation to employee health care costs.
Although many of these direct-line negotiations currently take place with larger, integrated and specialized systems, direct contracting with entities that do not implement facility fees seems to be a logical progression in market development, as health care costs likely will increase the rate of health care service decentralization for the foreseeable future.
Christopher L. Graff is an attorney and a medical practice consultant and accountant with the Medical Management Consulting Group, Inc., a full-service consulting and accounting firm based in Virginia Beach. mmcgonline.com
