You have to admit that now is a very interesting time to be in the healthcare field. This year we saw a $1 Trillion healthcare reform bill get passed. I don’t believe that anyone has a real understanding of the impact of the bill or its affects on medical practices. It seems every day more details are revealed of the bill. It will take years before we see the total impact.
Then you have the ARRA stimulus package which provides $19 Billion in Medicare incentives to doctors that embrace the use of certified EHRs. This is a huge opportunity for medical practices to implement technology and move from paper charts to EHRs. But along with the incentives come some significant obstacles. Medical practices have to use a certified EHR but there is no definition of what that means or who the exact certifying bodies are. As of today you can not purchase an EHR that is certified and will qualify for the stimulus funds. Practices not only have to implement certified EHRs but they have to use them in a way that shows “meaningful use”. Of course the exact rules for meaningful use are not known and many argue that the rules that are being proposed are too rigid and the bar is too high for practices to actually show meaningful use. Taken altogether, you have a lot of medical practices that want to cash in on the ARRA stimulus incentives and to implement an EHR but you have uncertainty and obstacles that are keeping them on the sideline. They are taking the wait and see approach. Some are even thinking that it may not be worth the effort to attempt to participate in the ARRA stimulus incentives.
One thing for certain is that the medical practices that are moving forward with an EHR implementation are spending a lot of money. There is no way around it, EHRs are expensive. The cost of the software, hardware, network, training, staff disruption and all of the other components that go into an EHR implementation all add up. Of course the hope would be that the costs would be offset by the ARRA stimulus incentives but that is not a guarantee as I mentioned before.
At the same time you have all this uncertainty around healthcare reform and ARRA stimulus, medical practices have to contend with two major economic issues. The first is the severe recession that we have been in since 2008. There is no way around it, when the economy is suffering all business including medical practices suffer as well. I hear from my clients that patient visits are down and that waiting rooms are less filled. This has a significant and real impact on a medical practice’s cash flow and financial health. The second economic issue is the proposed cut of 21% in Medicare payments to physicians. For at least 6 months the looming threat of a 21% cut in Medicare payments have darkened the economic sky for medical practices. Congress has postponed the cuts several times but have not permanently addressed the situation. As of today, the 21% cut has been pushed back until November 30, 2010. Along with postponing the Medicare cut, Congress has given doctors a 2.2% increase until November. Very few medical practices are rejoicing because in December 2010 they are looking at a 23% cut in Medicare payments followed up by a 30% cut in January 2011. No one really knows what or when the final outcome will be.
On top of major financial outlays to implement EHRs and the uncertainty surrounding the economy and Medicare reimbursements, medical practices have to deal with many government regulations. As I have written about often, the looming threat of HIPAA Security Audits are a real concern for medical practices. Implementing HIPAA Security usually require skill sets that medical practices don’t have. IT security companies are needed to help with policies and procedures, vulnerability and risk assessments along with implementing new technologies such as email and laptop encryption. On top of HIPAA Security, medical practices face the “Red Flags Rule” requiring that certain entities develop and implement written identity theft prevention and detection programs to protect consumers from identity theft. The Red Flags Rule has been postponed several times and was to go into affect June 1, 2010. As of now the FTC has agreed to keep physicians exempt from the rule until the outcome of a lawsuit by the American Bar Association. Once again, the outcome of this regulation is unknown.
When you look at each of the issues a medical practice has to address from healthcare reform to Medicare reimbursement cuts they don’t seem to bad. Each one taken separately allows a medical practice to address the issue and to make modifications to they way they run their business. But unfortunately all of the issues are happening at the same time. A medical practice has to address all of the issues together including major financial outlays, cuts in revenue caused by several factors, and staying abreast and implementing the latest government regulations. All the time spent addressing these issues is time not spent on seeing and treating patients.
Have other industries gone through such dramatic change in such a short period of time? The changes provide opportunities along with real negative affects. Medical practices need to be flexible and to adjust to all of these changes. Some of the changes such as the Red Flags Rule may never occur. But either way a medical practice needs to be prepared, need to be informed and need to be ready to change their business model to adjust to such dramatic changes. Strange days indeed.