AHS Community Practices

Trends 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

Clinical Instructor, UCLA Hospitalist

Acknowledgements AHS leadership

Disclosure Both academic and community projects have been financially sponsored by the American

Headache Society.

2

IN THE NEWS

3

Insurance

companies opting

out.

Premiums

increasing.

Enrollment not

meeting targets.

What does it all

mean?

PRACTICE STRUCTURE TRENDS

4

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

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

5

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

Models Concierge: 24/7 access

Hybrid: Cash + Insurance

Menu versus Tiers Fixed fee per service

Different membership plans for different levels of service

Challenges Converting Patients

“10%...doing pretty well”

Attracting Patients Marketing not taught in medical school

Managing Patients Pay more, Expect more

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

7

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

Endocrinologists

Family medicine physicians

Gastroenterologists

Internal medicine physicians

Neurologists

Psychiatrists

Rheumatologists

Median Compensation 2014

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

0

50

100

150

200

250

300

350

<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

Num

ber

of tr

ansa

ctio

ns

Percent of preceding years net income

Valuation of Goodwill

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

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Utilizing Physician Extenders

Follow up visits

Patient communication (ie phone calls)

Creating Procedure Days

Increased volume of patients

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

Networking

EMR/Medical billing

HIPAA compliant

communication tools

Patient portals

Patient scheduling

Specialty

Electronic diaries

Pre-visit

questionnaires

Tele-health/remote

monitoring

10

CHANGING THE WAY WE PRACTICE

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

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Thank you for your participation.

Please direct questions to AHSHQ@talley.com

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 Community Need versus Supply of

Specialists

Cost saving interventions

Keep employees at work

Valuation techniques Relative Value Unit

Fair Market Value

14

“Current trends in

physician employment

represent neither a

necessary nor sufficient

condition for true

integration; value-added

integration does not

necessarily require large-

scale physician

employment and simply

signing 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

40% under age of 35

50,000 PCP shortage by 2025

Distribution of Potential Enrollees by Age

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

Source: Leavitt Partners Center for Accountable Care Intelligence

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

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Physicians Taking the Lead

17

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

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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, while 30% believe there will be no change

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

36%

27%

27%

9%

0%

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

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 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

20

30%

24%

37%

9% 0%0%

ACOOther

50% or More Production

Plus Incentive

50% of More Salary Plus

Incentive

100% Productivity

100% Equal

100% Salary

7%

23%

28%

31%

5%6%

NON- ACO

Majority of ACOs 50% or More Salary Plus Incentive

Non-ACO and PCMH tend to compensate based on RVU

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

Headache Disease Burden and Awareness

21

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

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

Alternative Practices

Outpatient Infusions

Decreased ER visits

ER Consultations

Current Metrics

CT and MRI utilization

Decreased Co-morbidity risk

Depression, anxiety, CVA, CAD

Comparative Cost of Management of

Status Migrainous Patient

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

23

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Non-Communicable Disease DALYsIn 2010, Per 100,000

Column1 Migraine Tension Type Headache

Industry Perspectives

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“…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

“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

“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.

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

25

26

“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 specialist work RVUs range from 5,000

Compensation per RVU variable Conversion Factor: $35.82

Average per MGMA: $61.62

RVU Comparisons

Source: MGMA Physician Compensation and Production Survey: 2014 Report Based on 2013 Data – Key Findings4718

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

$224,5

32

$375,7

67

$240,9

78

$425,5

90

$230,3

70

$389,9

82

$229,7

16

$398,3

87

$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

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“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”

–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