COSM14: Healthcare Reform Expected to Impact Physician Demand, Hiring

The hiring of physicians and other healthcare providers could slow, but maybe not everywhere. Healthcare costs might go down some, depending on certain factors. Patients might be empowered to make their own medical financial decisions, but they might not be equipped to make wise ones.

Veteran physicians with extensive executive experience tried to tackle big questions surrounding healthcare reform during the panel discussion “Healthcare Delivery/Affordable Care Act—What Do We Know and What Can We Do?” In the process, they offered keen insights but also generated more questions.

The Affordable Care Act uses a variety of mechanisms to address several themes, which were laid out by panel moderator Ellis Arjmand, MD, MMM, PhD, professor of pediatric otolaryngology-head and neck surgery at the University of Cincinnati College of Medicine.

The legislation aims to promote access, control costs, improve quality, promote preventive care, improve nursing care through workforce provisions, raise revenue, and enforce requirements that insurance companies spend most of their premium revenue on the delivery of care.

The need for reform is apparent, Dr. Arjmand said. “I think that it’s important to remember that much of what we have, much of what we enjoy, has over time been publicly funded,” he said. “And we’ve built a system that is unavailable to many of the people in this country.”

The panelists were Jonas Johnson, MD, president of the Triological Society and Dr. Eugene M. Meyers Chair of Otolaryngology at the University of Pittsburgh School of Medicine; Marion Couch, MD, PhD, MBA, chair of otolaryngology-head and neck surgery at Indiana University School of Medicine in Indianapolis; and Michael M.E. Johns, MD, interim chief executive officer and interim executive vice president for medical affairs for the University of Michigan Health System in Ann Arbor.

Here are some key questions Dr. Arjmand posed to the panel:

1. What are your overall expectations for demand of healthcare as reform is rolled out?

Dr. Johnson said that it’s reasonable to expect that, if more people are insured, there will be “more work to do,” because those previously uninsured will now get preventive services they wouldn’t have gotten before. At the same time, waste will presumably be cut out of the system, so “the net effect could be even.” He added that everyone will be compared on cost and quality and cautioned that cost is a much easier thing to compare, so physicians should be prepared for that.

Dr. Couch said that Vermont is rolling out reform but has found that demand is far lower than projected. The state’s initial projection was that healthcare utilization would be 7% to 8%. But, last year, utilization was 2.7%, which is below the national average of 4%. She is not sure how much demand will rise in Vermont, which, as a rural state, is unlike more populous states. “I do think we have to understand how our healthcare utilization is trending in the economy,” she said. “And we are not utilizing services as much as predicted, and that plays into our model into how we’re going to pay for finances.” This will play out “region by region,” she said.

Dr. Johns presumes there will be more careful utilization of resources by consumers, but it will only be done in a reasonable manner if consumers are able to “divine what the real costs are.” That might be unrealistic, he said. “I would defy most of you to predict the costs of a hospitalization, and if you can’t tell them, how do you expect the patient to figure it out? … This whole game of high deductible I see as really just a shift of risk from the employer to the employee. It’s done [in a] very calculated [way] and deliberately and it’s under the guise of, ‘You’ll become more responsible for how you spend your money.’ Maybe.”

Dr. Arjmand said that while there will be more insured people coming into the system, it remains to be seen whether they will be able to find doctors at the reimbursement rates their coverage will provide. On the other hand, there’s a burden on physicians to “practice smart” and be less wasteful. “It’s so easy to understand what the forces are and what the trends might be,” he said. “[It’s] harder to say which will be the dominant effect over time.”

2. How do considerations of demand affect decisions on manpower needs and hiring?

Dr. Johnson said utilization had decreased at the University of Pittsburgh over the previous six months, and he suspects people are becoming aware of increasing personal responsibility and choosing not to use the emergency room and not to come back for checkups. “It makes me feel that this may be the new normal, and so the idea that we’re going to continue to expand seems to be counterintuitive,” he said. “In fact, I’m concerned that we’re going to have to start to shrink.”

Dr. Couch pointed out a paradox: Providing better, smarter care might, in the end, boost costs. “As people live longer, it may cost more to the federal government,” she said. “So the only thing you could to do to reduce the federal spending on healthcare is, unfortunately, [to] reduce physician reimbursement and administrative costs. So, I think we have to be ready for that.”

Dr. Johns said that rural hospitals might really feel a squeeze, because many barely get by now. Half the hospitals in Georgia, he said, operate at a loss. Large, integrated systems might actually expand to meet demand, but academic centers might not. “I do think that there will be physician hiring in our big systems, selectively, where needed,” he said. “But, as far as the academic side [goes], I’m not sure that we can afford to expand and then subsidize our faculty. We have to educate, of course, but it’s going to be a battle there.”

Dr. Arjmand echoed comments made in prior presentations by Dr. Johnson and Dr. Johns that it was important not to “fear change,” and that physicians should feel empowered to help lead change. “These are things we’ve been talking about: measuring quality, measuring safety, measuring cost,” he said. “There will now be structures in place that will require us to do those things.” As the old model of how payments flow is replaced by a new, more complicated one, it’s unavoidable that there will be an abundance of questions. So doctors may as well confront them, he said. “We’re introducing a lot of new players, we’re introducing the insurance marketplace, we’re introducing accountable care organizations, and we don’t have systems in place to manage them,” he said. “So these things are going to happen. Nobody knows what this is going to look like.”