Physician Demand : Driving A Brighter Future for Primary Care. William Breen Sr. Vice President, Physician Alignment Methodist Le Bonheur Healthcare
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1 Physician Demand : Driving A Brighter Future for Primary Care William Breen Sr. Vice President, Physician Alignment Methodist Le Bonheur Healthcare November 15, 2012
2 Primary Care Demand and Supply What is the future role for primary care physicians? What is driving health system employment of primary care physicians? How many are likely to be employed? What effect is this having on compensation? Is employment the only option? How can we create more primary care physicians?
3 What is the Future Role of Primary Care Physicians? PCPs form the core of an organized delivery system In a population focused new world, PCPs are the managers of teams of allied health professionals EMRs and technology in the PCP office will increase care coordination and reduce gaps in care It will be increasingly harder to fill these demands AND profit financially without the benefits of scale
4 What is Driving Health System Employment of PCPs In a FFS market it is downstream referral influence In a hybrid market, it is securing referral channels and increasing the coordination of care In a world of global budgets it is coordination of care and total management of expenditures. The average PCP in the US provides approximately $ 1 million of downstream referral revenue for health systems but influences $12-14 million of healthcare services
5 How Do We Predict How Many PCPs Are Likely To Be Employed? Review development in other areas of the US (Cincinnati example: 80% aligned; far exceeds Memphis) Predict appetite for PCP employment by health systems (High) Predict readiness of PCP s for new models (very ready) Review alternatives and timelines for environmental changes (only consolidation offers similar benefits)
6 A National Transformation 40% 35% 30% 40% 25% 20% 30% 15% 10% 20% 5% 0% 2,004 2,008 2,012 % U.S. Physicians Employed by Hospitals and Health Systems Advisory Board survey results; cited in New York Times, Same Doctor Visit, Double the Cost, August 27, 2012
7 A New Paradigm Panel Size and Attributable Life metrics are the new paradigm, not inpatient discharges, for system market and quality of care analysis NPs and PAs will be in greater demand
8 MLH Market Position: A Cross-walk Between Share of Discharges and Population Share MLH IP 2011 market share stands at almost 44% (Excluding Baptist Desoto) Market Share 5-county Area Discharges System Total Share MLH 46, % BMH 29, % SFH 17, % MED 11, % Delta 2, % Grand Total 107,629 MLH Primary Care service line based on population age and their respective market position
9 Medical Staff Age Distribution by Service Staff Physician Analysis Physician Specialty Average Age Total Count Under % Age 55+ Primary Care Total % Medical Total % Pediatrics Total % Surgical Total % Other Total % Total % Under Primary Care Total Medical Total Pediatrics Total Surgical Total Other Total Source: Cactus database July 2012
10 Primary Care Physician Loyalty and Market Primary Care IP 2011 physician loyalty stands at 56% for MLH, with MLH employed physicians reaching 87%, and unaffiliated physicians reaching 58%. IP 2011 Physician Loyalty System Employment MLH Volume Market Volume Physician Loyalty MLH Practices 1,363 1, % BMH Practices 4 1, % SFH Practices % Unaffiliated Practices 20,255 34, % 21,622 38,406 56% There are a 282 PCPs eligible for employment in our market, with 215 of them unaffiliated. Employed PCP Physicians System # of Market Share Physicians Controlled MLH 30 10% Plus another 15 and 3 LOI BMH 24 10% SFH 13 5% Market* % Total Eligible for Employment 282
11 Primary Care Physician Need In order to adequately serve our existing patient subset of the market (56%) and its population equivalent (approx 500,000 - Age 18+), based on a recommended PCP panel size of 3,651 patients, we would need over 130 PCPs. This model assumes every patient should have a PCP.. Panel Size Need Evaluation Methodist Share of Population (18+) 507,442 Panel size 90th Percentile 75 th Percentile Average 10th Percentile Methodist recommended 4,716 3,651 2,500 1,159 3,651 Physicians needed to protect Methodist position 90 th Percentile 75th Percentile Average 10th Percentile Methodist recommended At the 2,500 patients panel size, the need for PCPs to protect our market share (157) is closely matched by Solucient s 41.5/100,000 physician need ratio (163). Given that we employ 45 PCPs (30 plus another 15 soon to join us), given also the presence of Christ Community physicians (26) and UTMG (6), it is reasonable to assume that we would need 62 PCPs to protect MLH market share, assuming each patient has a primary care provider. In addition, if we also count mid-level providers (15 with a 0.8 MD FTE equivalent), the need for PCPs to protect MLH share is reduced to an additional 50.
12 Primary Care Medical Staff Age Analysis Primary Care Medical Staff Age Distribution (Excluding OB/GYN) Under Average Total Under Staff Physician Analysis % Age Physician Specialty Age Count Family Medicine % Internal Medicine % Obstetrics & Gynecology % Primary Care Total % Source: Cactus database July 2012
13 Primary Care Summary The market assessment shows a need for an additional 50 PCPS/NPs to serve our patients through aligned PCPs, assuming all MLH patients should have a PCP Specialty Market share Pop 5 counties 18+ Population to protect market position Panel size Need to protect market position Current employment PCP 56% 901, ,442 3, Other physicians in the market loyal to MLH CC and UT NPs (0.8 MD FTE) MD Gap The medical staff analysis shows that there are 40 PCPs over the age of 60 Specialty Total medical staff Medical staff over 60 Loyalty of all staff over 60 Loyal / Aging PCP % 15
14 Memphis Primary Care Alignment Review Aligned 30% Non-Aligned 70% We are approaching a tipping point with 30% of the PCP market aligned
15 How is this Impacting Compensation? From 2010 to 2012, MGMA SE region mean comp per wrvu rose from $40 to $43 (3.75%/year) The Memphis market experiences higher panel sizes and greater productivity for PCPs than the rest of the US In a productivity model, this means higher incomes than the norm Remember: The average US health system loses $80K per MD in operating employed primary care practices. (Reasons: Overhead, Benefits and higher MD Income) Scale in contracting, lab operation and other ancillary revenues can drive a health system closer to break even for a health system What is the value proposition? Increased Market Share, Downstream Revenue and Population Health
16 Is Employment the Only Option? Employment is NOT the only option Other options include micro practice management (status quo) and Consolidation Consolidation enables maximized contracting, IT deployment and ancillary revenue capture (lab)
17 How Can We Create More PCPs? Accentuate the positives! No hospital work Limited call Comp above mean for the SE Region for productive PCPs Limited business risk Describe
18 Does This Spell The End of Specialty Stability? No larger specialty groups still exert strong influences Not every specialty is ripe for an alignment initiative. Totally closed staffs are hard to envision at area health systems However, scale and sophistication will be extremely important in operating any specialty care clinic Smaller practices will have a harder (but not impossible) time coping
19 Literature Review Physician panel sizes from the MGMA 2011 Productivity Survey Panel Size: How Many Patients Can One Doctor Manage? Mark Murray, MD, MPA, Mike Davies, MD, Barbara Boushon, RN, Family Practice Management, Manage Panel Size and Scope of the Practice IHI, April The effect of physician panel size on health care outcomes Theodore Stefos, James F Burgess, Jr, Michael F Mayo-Smith, Kathleen L Frisbee, Henry B Harvey, Laura Lehner, Sophie Lo, and Eileen Moran Health Serv Manage Res May : Panels And Panel Equity Tantau & Associates PCMH Panel Size Trends: Introducing A New Data Series The Advisory Board Company Why the Doctor Can t See You by John Goodman, WSJ 8/15/ Too Few Doctors In Many US Communities by Annie Lowrey and Robert Pear, NYT 08/28/2012
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