A Brave New World…for Medical Practices

David K. Rea, M.P.A., F.A.C.M.P.E.
and Richard K. Thomas, Ph.D.

In rapidly evolving industries, you often hear the admonition: If you are not changing—you’re losing. That has certainly been the case in healthcare over the past 20 or more years. Medical practice today is certainly different than just a few years ago and the current developments suggest that there is no end in sight to turbulence in healthcare.

Most practices have successfully adapted to change in the past because they knew what that change was going to involve. Today, however, there has never been so much confusion, misinformation and downright lack of knowledge of what the future is going to hold. Physician practices are being encouraged to position themselves for the future healthcare environment but no one can tell them what that is going to be.

When is an expert required? It would probably take an expert on various aspects of the healthcare environment to try to explain what can be expected in the future. The practice would have to know about population trends, changes in reimbursement, the emergence of accountable care organizations (ACOs), and the impact of the ACA. In the short run, the best bet may be to consider what we do know about the future.

Population Changes Impacting the Medical Practice. We do know that the population is going to continue to change, becoming more diverse with growing numbers of patients who are racial and ethnic minorities. Not only will members of these groups have different health problems, they have different expectations with regard to the healthcare system. The existing patient base can be expected to be older and more female dominated in the future. As far as the white patient population goes, we can expect fewer pregnancies and fewer children. Further, as members of the Baby Boom generation, seniors are going to be particularly demanding as patients.

We also know that patient populations will continue to shift as some groups move out to surrounding areas and others move in. Clearly, the city of Memphis will hemorrhage more patients as residents continue to migrate to surrounding areas. A well-located practice today may find itself in a “patient desert” in a few years.

Some trends are expected to continue—the shift to outpatient care, the emphasis on prevention and on continuity of care. A new generation of patients expects a holistic approach to care, forcing practitioners to take a wider view of medical issues and consider non-clinical factors.

We don’t know yet the impact of the Affordable Care Act locally. We do know that tens of thousands of additional Shelby County residents will not be covered under TennCare unless something changes. Further, local hospitals that annually receive tens of millions of dollars in payments to cover indigent care will lose out on those funds—resulting in little if any gain in the number of insured and a likely overall loss of dollars for care. Local residents who enroll in the healthcare exchange may gain insurance that they wouldn’t otherwise have, but it remains to be seen whether this turns out to be merely swapping one policy for another.

One thing is clear, physician practices that expect to survive and prosper in this brave new world are going to have to know a lot more about the healthcare marketplace than at any time in the past.