THE STATE OF RHEUMATOLOGY
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1 1 THE STATE OF RHEUMATOLOGY Paul H. Caldron, DO, PhD, FACP, FACR, MBA Coalition of State Rheumatology Organizations Fellows Conference February 17, 2018, California USA CSRO Fellows Conference February 17, 2018
2 Overview 2 Rheumatology as an Industry History and Perspectives Rheumatology as a Service Business Durable concepts Where Are We Going Correcting a market failure
3 3 Industry Analysis of Rheumatology The Bigger View Strong professional associations (guilds) ACR, EULAR, CSRO, AF Strong scientific and technological advances- new drugs, diagnostics Strong market large and expanding The players - relatively decreasing numbers of rheumatologists Why the decrease?
4 4 American College of Rheumatology (ACR) Workforce Study 2006 Projection Number of rheumatologists will increase by 1.2 % Demand for rheumatology services will increase by 46%
5 5 Industry Analysis of Rheumatology Why Choose Rheumatology? Intellectual Stimulation Considered Intellectual (Respect of Colleagues) Lifestyle (Few emergencies) Long-term Relationships With Patients Exciting new therapies Income? < Opportunity Cost
6 Medscape
7 Medscape Burn-out among rheumatologists 54% loss of enthusiasm for work (emotional exhaustion) feeling of cynicism (depersonalization) low sense of personal accomplishment
8 ACR Workforce Study Overall 31% decrease in manpower, 138% increase in demand by 2030 Manpower relative to current demand deficit of 700 rheumatologists Manpower relative to 2030 demand deficit of 4100 rheumatologists
9 Interest in Rheumatology Fellowships Programs Applicants Positions avail Total Positions 454 Grads per year Programs/positions increasing, though still a bottleneck
10 Forces Working against the Work Force Opportunity Cost - Fellowship programs not filling Retirement 50% over next 15 years Baby Boomers IMGs 60% of fellows entering % leaving US Women increasing 59% by 2030 fewer hours, fewer years Life style part time - millennial ascendency work-life balance 10
11 Rheumatology Workforce Study: The Role of Graduate Medical Education in Adult Rheumatology Bolster et al, A&R online Feb 6, 2018
12 12 Challenge to US Rheumatology in the New Millennium Guiding Principles for Promoting the Profession of Rheumatology 1. The greatest risk to the quality of care of a patient with rheumatic disease is: The unavailability of a rheumatologist 2. Private practice rheumatologists must optimize business practices To optimize profitability To compete for young doctors To meet the US demand
13 Responses in private practice management models 13 US Rheumatology Curascripts US Rheumatology Network (USRN) McKesson American Arthritis and Rheumatology Associates Multistate group single Federal Tax ID Bendcare Arizona Arthritis and Rheumatology Associates, PC One state_ All shareholders are practicing rheumatologists Integrated business units (physician APC teams) Integrated business units ( ancillaries ) Articularis Two states - All shareholders are practicing rheumatologists Better contracting/better drug rebates through use of RA pathway
14 Forces Governing An Industry 14 Bargaining Power Of Suppliers ME Porter. Competitive Strategy Threat of New Entrants Industry Rivals Bargaining Power Of Buyers Threat of Substitutes
15 15 Industry Analysis of Rheumatology The Bigger View Law of Supply and Demand not working Market Distortions Payers Government Managed Care Anti-trust laws Insurance may collude on payment schedules Physicians may not collude on price Cognitive/Procedural Discrepancy Lack of business and economic knowledge in rheumatologists An Inconvenient Truth
16 Market Failure in Rheumatology A series of distortions 16 Constrained pricing relative to supply and demand Constrained labor market - immigration Bottlenecks in education market Medical school too costly Inadequate supply of PGY-1 training slots Societal ambivalence about medical care Right vs. Privilege Infrastructure vs. Free market Contractual service vs. Covenant relationship
17 Operational Considerations Managing the Internal Environment Where most of the failures are: Building the internal customer. Enabling the promise (let the staff member know what the promise is) Internal Marketing Services Marketing Triangle Company Don t create expectations that can t be met. 17 Setting the promise (what I ll do and what I ll not do) Staff Member (internal customer) Delivering the promise Customer
18 Operational Considerations Managing the External Environment Evaluation and Management Contracts Vertical and Horizontal Integration Adding Services Functional Relationships with the Exchange Network Cooperating with Colleagues for Strength 18
19 19 Vertical and Horizontal Integration Laboratory X-ray Densitometry MRI Diagnostic / Interventional US Orthotics, Supportive devices Non Pharmacy Dispensing Site Suppliers Owning the Building Group Purchasing Organization Rheumatologist s Core Competency Diagnosis and Treatment Infusion Services Clinical research Physical / Occupational Therapy Electrodiagnostic Studies CORRONA Database Entry Theralogix Complementary Therapies Buyers Employer based Contracting
20 Industry trends - Technologies vs. human adaptability - Dislocation and disruption 20 Travel Airlines, Uber, AirBNB (sharing economy) Education MOOCs, Udacity, Coursera, distance, mergers Communication mobile, devices, payment Entertainment - movies, television, news Banking, finance Mpesa, crowd sourcing/lending facilitators (fintech) Power and Transmission Wind, solar, hydro, UHVDC transmission Medical technology oncology/ immunology therapeutics human exoskeletons, self-driving cars health apps - digiceuticals (behavior modification; brain games) Healthcare delivery population management alternative payment systems (risk-shifting) big data implementation, i.e., Real World Evidence physician extenders artificial intelligence gene technologies (CRISPR cas-9) EHR integration solving the Access : Privacy polemic
21 Dynamic relationships in healthcare supply chain 21 CVS Pharmacies, PBM, Minute Clinics Aetna (Ins.) Anthem (Ins.) Express Scripts (PBM) (break-up with lawsuit) United HealthCare Catamaran/OptumRx (PBM) Other PBMs and Ins. Companies as targets for acquisition Amazon pharmacy/delivery benefits/challenges Rite Aid
22 Solving the Manpower Problem 22 Reducing opportunity cost by better managing our practices Expanding training capacity, esp. in underserved regions Lowering load of OA, FM, pain management Loan repayment plans Immigration reform Academic rheumatology clinical training, mentoring life-long learning Private groups nurture efficiency, business acumen, ownership APCs Minding the Gap
23 Advance Practice Clinicians in Rheumatology a lifeline 23 25% of rheumatology practices utilize APCs US Ratio 1:10 APC : rheumatologist AARA Ratio 2 : 1 Barriers: Training, investment, risk What makes rheumatology APCs tick? Attracted to complexity, variety, results What makes APCs stick? Career fulfillment Identity and role Professional with back-up and respect Recruitment and training efforts
24 24 We cannot solve our problems with the same thinking that we used when we created them. Albert Einstein 1946 You are the generation that can handle this
25 25 THE STATE OF RHEUMATOLOGY Paul H. Caldron, DO, PhD, FACP, FACR, MBA Coalition of State Rheumatology Organizations Fellows Conference February 17, 2018, California USA
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