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Top Practice Management Challenges for 2015

Administrative burdens head the list

Considerable challenges are projected to affect clinical practice management in 2015, according to an article published in Medical Economics.

Among the challenges that physicians are likely to face in the new year, the authors describe six issues related to practice management.

1. Administrative Burdens

According to the report, administrative burdens represent a considerable challenge, contributing to a reduction in physicians’ on-the-job happiness; prior authorizations represent a major source of the administrative burden.

The report notes that the percentage of physicians who spend more than one day per week on paperwork increased from 58% in 2013 to 70% in 2014.

Prior authorizations are a major, and growing, source of physicians’ paperwork burden. More and more payers are requiring prior authorizations for more drugs and procedures. For example, in 2013 21% of the brand-name medications covered under Medicare Part D required prior authorization, and 35% were subject to some form of utilization management. In contrast, in 2006 when Medicare Part D began, those numbers were 8% and 18%, respectively, according to a Kaiser Family Foundation study.

2. Independence Versus Employment

Issues related to independence versus employment present a second challenge, with the benefits of being employed by a hospital system becoming less attractive after the expiration of the initial contract for some physicians.

The American Medical Association’s 2012 Physician Practice Benchmark Survey found that 60% of physicians were working in physician-owned practices compared with 29% who worked in a practice that was either partially or wholly owned by a hospital system. Still, the pressures on independent physicians are such that more physicians are likely to seek to join a hospital in the coming years, the report says.

3. Payers Dictating Health Care

There is an increasing trend toward payers influencing patient care. For example, physicians have to deal with a range of audits tied to meaningful use and other programs. The federal government can audit Medicare patients’ charts, while individual states can audit records for Medicaid patients, since they fund Medicaid, up to 10 years after a patient’s treatment. Audits are just one sign of a trend toward payers influencing — or some would say dictating — patient care that, for many medical professionals, can erode their satisfaction with their profession, according to the report.

Audits are not the only way payers are inserting themselves into the physician–patient relationship. Prior authorizations are another way payers attempt to take decision-making out of the hands of physicians. In addition, more payers are tightening their provider networks in an attempt to rein in costs. This move toward narrow networks means many physicians are being evaluated.

4. Patients Dictating Health Care   

Other management challenges include patients dictating health care, reflecting the balance between the desire to practice quality medicine with the need to obtain positive feedback from patients.

With government programs such as the Physician Quality Reporting System — which indirectly ties Medicare reimbursements to patient satisfaction scores — as well as the growth of websites devoted to evaluating doctors, the need to keep patients satisfied has taken on a new urgency. And that need is affecting clinicians’ medical decision-making, the report says.

5. Staff Retention     

Staff retention is a growing issue, with the need to maintain staff becoming a critical issue in the era of value-based payment models and an increased emphasis on team-based medicine.

Staff turnover can be a significant drain on both practice revenue and resources. The Center for American Progress estimates that for workers earning less than $50,000 annually, it will cost employers approximately 20% of that employee’s salary to find a replacement.

Employees should be rewarded in “meaningful and creative ways,” the report says. Extra paid time off, gas and other gift cards, and tuition assistance for dependent children can solve employees’ problems that may hinder workplace performance.

6. Avoiding Liability

Finally, the Patient Protection and Affordable Care Act could be contributing to increased medical malpractice claims, which could lead to physicians practicing more defensive medicine.

A 2014 report from Aon Risk Solutions projects the frequency of claims per class 1 (internal medicine) physician in 2014 to be 3.37%, and the cost to be $185,000 per claim. The projected frequency of claims by Aon in 2014 was 2.97% per class 1 physician, with a price tag of $203,000 per claim.

The 2015 projected loss rate for hospital general liability is $125 per occupied bed compared with $119 in 2014, whereas the average general liability claim is expected to be $38,000 for claims occurring in 2015, up from 2014’s projection of $36,000.

Florida has the highest projected loss rate for 2015 at $7,920, and Minnesota has the lowest rate at $770.

Sources: Medical Xpress; January 6, 2015; and Medical Economics; December 1, 2014.

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