AHS Community PracticesTrends and Strategies

November 2016

About this Initiative

� Objective:� The AHS is seeking innovative models to improve the delivery of needed health care services to headache patients.

� Develop tools to empower Academic and Community practices to deal with changing health care landscape.

� Bio:� Neil Parikh, MD, MBA� Neil Parikh, MD, MBA

� Clinical Instructor, UCLA Hospitalist

� Acknowledgements� AHS leadership

� Disclosure� Both academic and community projects have been financially sponsored by the American Headache Society.

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IN THE NEWS

Insurance companies opting

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companies opting out.

Premiums increasing.

Enrollment not meeting targets.

What does it all mean?

PRACTICE STRUCTURE TRENDS

� Generally speaking, there has been an increase in hospital employment, practice acquisition, ACOs

� Private practice is not dead and there may be a slight change in headwinds

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� Hospital acquisition of practices may be slowing down as many not financially viable acquisitions

� Insurance companies recognizing that decrease in number of practices leading to decreased competition

� Increased variety of direct pay structures

Successfully running a private practice is still challenging, but the pressure to move to employment may be lessening.

CONCIERGE, BOUTIQUE, RETAINER, DIRECT-PAY� Trends

� Survey of 14,000 physicians� 10% planning on shift to “concierge” in 1 to 3 years

� Survey of 22,000 physicians� 1 to 2% increase from 2012 to 2013 across specialties

� 4% of neurology practices are concierge or cash-only

� Challenges� Converting Patients

� “10%...doing pretty well”

� Attracting Patients� Marketing not taught in medical school

� Managing Patients� Pay more, Expect more

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only

� Models� Concierge: 24/7 access� Hybrid: Cash + Insurance� Menu versus Tiers

� Fixed fee per service

� Different membership plans for different levels of service

� Legal Considerations� Risk of being dropped as an in-network provider

� Co-pays can violate contracts� Medicare double billing

� Clearly defined non-covered services

Sources: “Neurologist Compensation Report 2013,” Medscape; “Cash only practice: what you need to succeed,” Medscape; “Concierge Medicine: Medical, Legal, and Ethical Perspectives,” Internal Journal of Law, Healthcare, and Ethics

GEOGRAPHY OF UCNS HEADACHE DIPLOMATES

United Council for Neurological Subspecialties: Diplomates 6

Understand the geography you are practicing in.

33 states with 5 or less headache specialists.

ACROSS SPECIALTY METRICS

Dermatologists

Endocrinologists

Family medicine physicians

Gastroenterologists

Internal medicine physicians

Neurologists

Psychiatrists

Rheumatologists

Median Compensation 2014

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Based on site interviews, mean RVUs for headache specialists is ~5,000 largely because of procedures

$- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000

Cardiologists

Dermatologists

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

Cardiologists

Dermatologists

Endocrinologists

Family medicine physicians

Gastroenterologists

Internal medicine physicians

Neurologists

Psychiatrists

Rheumatologists

Median RVUs 2014

Source: American Medical Group Association's "2014 Medical Group Compensation and Financial Survey," a 2014 report based on 2013 data

VALUATION: INTANGIBLE ASSETS

200

250

300

350Number of transactions

Valuation of Goodwill

0

50

100

150

200

<10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 60 60 to 70 70 to 80 80 to 90 90 to 100 100 >100

Number of transactions

Percent of preceding years net income

Source: The Goodwill Registry, Health Care Group 8

Goodwill is effectively your reputation.

Your value is determined by more than RVUs.

BEST PRACTICES: EASY WINS

� Utilizing Physician Extenders

� Follow up visits

� Patient communication (ie phone calls)

� Creating Procedure Days

� Increased volume of patients

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� Better utilization of botulinum toxin

� Templates

� Standardized intake forms

� Validated screening questionnaires

� Pre-authorization checklists

� Revenue Cycle Management and Analysis

Small, simple fixes can increase volume, increase revenue and decrease practice frustrations

Small BusinessSmall Practice

� Website

� Yelp: Patient reviews

� CRM = PRM

� Office management

� EMR/Medical billing

� HIPAA compliant communication tools

� Patient portals

Patient scheduling

Specialty

� Electronic diaries

� Pre-visit questionnaires

� Tele-health/remote monitoring

CHANGING THE WAY WE PRACTICE

� Networking� Patient schedulingmonitoring

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Conclusion

� Be aware of the news, the trends and impacts to your practice

� Understanding your value as a Headache Specialist

� Implement tools to make your practice more efficient

� Evaluate technologies in a constantly evolving delivery landscape

Headache is a misunderstood condition despite its immense physical, emotional, and economic consequences. In order to advocate for your practice and ultimately your patients, you will be charged with educating physicians, insurers, and executives about your important role in mitigating the impact of this complex disease process.

By effectively articulating the high-quality, cost-effective care you already deliver, you will ensure the growth of this important field.

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Question and Answer

� Thank you for your participation.

� Please direct questions to AHSHQ@talley.com

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� Disclaimer: the author accepts no liability for the accuracy or completeness of the information, advice or comment contained in this presentation or for any actions taken in reliance thereon. While information, advice or comment is believed to be correct at the time of publication, no responsibility can be accepted by the author for its completeness or accuracy.

Resource slides

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Road Map� Last time…

� Independence versus Integration� Hospital Employment versus Independent Practice Association

� This time…� Ends of the spectrum: ACO vs Concierge

Establishing your value

“Current trends in physician employment represent neither a

necessary nor sufficient condition for true

integration; value-added integration does not � Establishing your value

� Community Need versus Supply of Specialists

� Cost saving interventions� Keep employees at work

� Valuation techniques� Relative Value Unit� Fair Market Value

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integration does not necessarily require large-

scale physician employment and simplysigning contracts does not ensure progress toward more effective care coordination.”

Sources: Toward Accountable Care. Washington, DC: The Advisory Board Company; 2010.

ACA Will Increase Demand (2014 slide)

Numbers to Consider

� 8 million new entrants enrolled through market

� Only 28% of 28.6 million people eligible enrolled

� 54% female

Distribution of Potential Enrollees by Age

� 54% female

� 40% under age of 35

� 50,000 PCP shortage by 2025 Projected Physician Shortage (All Specialties)

Sources: Kaiser Family Foundation, Association of American Colleges, HHS.gov 15

Conclusions

� Significant rise in insured headache demographic

� Access to care potentially more challenging

ACO: Accountable Care Organization

� ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to a designated patient population

Total Number of ACOs over time Estimated Number of Lives Covered by ACO contracts

Source: Leavitt Partners Center for Accountable Care Intelligence 16

Physicians Taking the Lead

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51% physician led49% percent include a specialist group

75% believe 50% of population covered by ACO in next 5 years

Directors aware that institutions are transitioning to new delivery models

� About ¼ of centers are currently ACOs and another ¼ will become an ACO over the next few years

� 70% are unsure what the effect of joining/becoming an ACO will be on their center, 36%

27%

27%

9%

20%

40%

60%

80%

100%

Institute approach to becoming an ACO

Not currently considering an ACO model

Over next few years

Currently an ACO

Don't know what institutional level changes

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effect of joining/becoming an ACO will be on their center, while 30% believe there will be no change

� Most directors are not involved with their institution’s delivery model strategy

36%

0%

20%Don't know what institutional level changes are being considered

Source: AHS Program Director Survey, July 2014, n=11

55%

27%

18%

0%

50%

100%

Involvement in institutional strategy regarding ACO and/or delivery model

Aware of conversation but not involved

Limited Involvement

None

What does this mean for the specialist?

• Decrease in referrals to manage costs• Loss of referrals to affiliated specialistsUnaffiliated

• Create contracts with ACOs• Allowed to contract with multiple ACOs“Other” Entity

• Limited to one ACO because use E&M codeJoin an ACO

• Limited to one ACO because use E&M code• Entitled to shared savings depending on ACO structureJoin an ACO

• Generally for large multi-specialty groups• Start up costs estimated at $1.7 millionStart an ACO

Recognize ACOs in your community and evaluate options for clinical integration

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ACO Compensation Arrangements

9% 0%0%

ACOOther

50% or More Production 7%

5%6%

NON- ACO

� Majority of ACOs 50% or More Salary Plus Incentive

� Non-ACO and PCMH tend to compensate based on RVU

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30%

24%

37%

50% or More Production Plus Incentive

50% of More Salary Plus Incentive

100% Productivity

100% Equal

100% Salary

23%

28%

31%

5%

Source: MGMA Physician Compensation and Production Survey: 2014 Report Based on 2013 Data – Key Findings

Headache Disease Burden and Awareness

� 36 million Americans, about 12% of the population, suffer from migraine headaches

� 3% of the population have chronic migraine with at least 15 days of headache each month for

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days of headache each month for at least 6 months

� “As Americans, we must recognizes the scope of migraine’s impact and deal realistically with this disabling disease.”

� Cindy McCain, 36 Million Migraine Chair

Insurers Perspective: Shared Savings� “Savings will come from physician pre-hospitalization interventions, alternative practice settings and patient interventions that improve the health profile of patients with ambulatory sensitive conditions so as to avoid events and expensive hospitalizations” – AMA

� Target Population Group

� Specific Disease

� Pre-Hospitalization Interventions

Comparative Cost of Management of

Status Migrainous Patient

Emergency Room Cost� Pre-Hospitalization Interventions

� Alternative Practices

� Outpatient Infusions

� Decreased ER visits

� ER Consultations

� Current Metrics

� CT and MRI utilization

� Decreased Co-morbidity risk

� Depression, anxiety, CVA, CAD

Emergency Room Cost

MD $1,900

CT Scan $1,000

Medication $1,000

Total $3,900

Carolina Headache Institute

Intervention $383

Total Savings Per Patient $3,517

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Employers Perspective: $29 billion cost

2000

2500

3000

3500

4000

4500

Non-Communicable Disease DALYsIn 2010, Per 100,000

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0

500

1000

1500

2000

Column1 Migraine Tension Type Headache

Industry Perspectives� “…a multidisciplinary approach to neurological care i.e. Headache Clinic…appears to be ‘low hanging fruit’ for an ACO and its neurologists.”

� The Accountable Care Guide for Neurologists

“Need to sell an ACO on the long term value of a patient. Even

though you can make a cost savings argument, it is not all a cost-play.

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� “Almost all ACOs right now are focusing on target populations within their total patient population… Most really are targeting related to a specific disease.”

� David Muhlestein,

Leavitt Partners

is not all a cost-play.

It’s really more about the stickiness. You want to prove you can hold

on to a captive population.”

-ACO Executive

RVU: Relative Value Unit

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� “Am doing well here, nearly my 2000th new patient so that’s great, but the institution is saying that I am not being productive, which would be a first for me in my life. LOL.”

Based on site visits, headache

RVU Comparisons

4718

5718

5023

7063

4797

6798

4296

6311

0

1000

2000

3000

4000

5000

6000

7000

8000

Primary Care Physicians Specialty Care Physicians

Work RVUs by Demographic Classification

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� Based on site visits, headache specialist work RVUs range from 5,000

� Compensation per RVU variable� Conversion Factor: $35.82

� Average per MGMA: $61.62

Source: MGMA Physician Compensation and Production Survey: 2014 Report Based on 2013 Data – Key Findings

Primary Care Physicians Specialty Care Physicians

$224,532

$375,767

$240,978

$425,590

$230,370

$389,982

$229,716

$398,387

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Primary Care Physicians Specialty Care Physicians

Compensation by Demographic Classification

Increased Transparency:Medicare Provider Utilization and Payment Data

� “Three Connecticut doctors billed Medicare for nearly 24,000 drug tests in 2012 – on just 145 patients.”

– Reuters

� “Pain and gain: An Alabama clinic stands out amid data on Medicare payments”

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clinic stands out amid data on Medicare payments”

–Washington Post

� “The highest-paid California doctor in the 2012 data was oncologist Minh Nguyen of Newport Beach, who was paid $11 million for his treatment of 793 Medicare patients.”

– LA Times