Diabetes Practice Options, September 2012

OPTIONSDIABETES PRACTICE

™

Improving Patient Care Through Increased Practice Efficiency

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SEPTEMBER 2012

EDITORIAL

3 | DIABETES STRATEGYNaturopathic Care Can Enhance Diabetes Patients’ Outcomes, Self-Management

6 | CAPITAL IDEASPhysicians Should Consider a Range of Tools to Protect Assets From Lawsuits

11 | HEALTH CARE TRENDSAffordable Care Act Elicits Largely Negative Reactions From Young Physicians

17 | DEMONSTRATING VALUEEHRs Reduce Incidence of Malpractice Lawsuits, Study Shows

18 | PRACTICE MANAGEMENT NEWSACP, SGIM: PCMH Model Aligns With Principles of Medical Ethics, Professionalism

Iam intrigued with the Austrian economist Murray Rothbard. His method forevaluating the events of governments and economies was simple: “cui bono,” or “Who benefits?” Many industries have benefitted from the Affordable Care Act (ACA), which was upheld

by the Supreme Court: Quite simply, they wrote the bill. Numerous leaked e-mails, and thesurge in stock prices of the major players in these industries just moments after the Court’sJune decision, confirm this.

The medical loss ratio provision is particularly nefarious in that it virtually ensures theelimination of small insurance companies, leaving only the big players. Twenty percent ofa huge number is sufficient to cover overhead, while 20% of a smaller number might notbe. Combining this with a rebate check to the people completes the demagoguery.

Many people will obtain insurance who never had it before, only to find that no one willsee them, as the Independent Payment Advisory Board will set the price of care below themarket cost to ensure rationing. Physicians will bear the blame.

Adding morbidly obese, smoking, diabetic, and hypertensive patients to healthy plans

Who Benefits From the ACA? Not the Patients!By G. Keith Smith, MD, contributing editor

Page 3

IN THIS ISSUE

CONTRIBUTORS

David Mandell, JD, MBA

G. Keith Smith, MD

Neil Baum, MDNew Orleans

Daniel BeckhamPresidentThe Beckham Co.Bluffton, S.C.Physician and Hospital ConsultantsWhitefish Bay, Wis.

Nathan KaufmanPresidentThe Kaufman GroupDivision of Superior Consultant Co. Inc.Physician and Hospital ConsultantsSan Diego

Peter R. Kongstvedt, MDP.R. Kongstvedt, LLCMcLean, Va.

John W. McDanielPresident and CEO Peak Performance Physicians, LLCNew Orleans

Jacque Sokolov, MDChairmanSokolov, Sokolov, BurgessScottsdale, Ariz.

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will bankrupt these plans, but not before pre-miums skyrocket. This is all intended, so thetaxpayers will beg the government to rescuethem with a single payer plan.

Electronic medical record (EMR) systemswill serve as medical intelligence, relayinginformation to those in Washington whowill decide who gets treated and who doesn’t.The health information technology industrysold their products to the medical communi-ty as a safety-enhancing tool. The EMR is abilling tool, but no safety tool. Cui bono?How would you like to own a companywhose products’ purchase was mandated byUncle Sam?

I believe the free market is the only systemthat results in a rational allocation of scarceresources. Medicine differs from otherindustries only because the governmentintervened early in history. The notion thatmore government could answer a problemthat government caused is like offering analcoholic a drink.

I choose freedom. I exhibit the prices forsurgeries at my facility online for all to see. Ishun government money. I embrace thecompetition that all other businesses mustendure. I believe physicians who choose thispath will thrive. The others will becomeslaves of the state, just as the ACA intends.

If the presidency changes hands this fall, we’ll know very soon whether the political machine looks more to the industrygiants in health care or the patients forwhom we care. �

STAFF

2 Practice Options/September 2012

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G. Keith Smith, MD is a board certifiedanesthesiologist with the SurgeryCenter of Oklahoma in Oklahoma City.He writes, blogs, and speaks on politicaland financial topics of interest to physi-cians. His blog can be found at http://surgerycenterofoklahoma.tumblr.com/.

Primary care physicians’ (PCPs)attitudes toward complementaryand alternative medicine (CAM)

approaches range from skepticism tocautious interest to enthusiastic sup-port. Most, however, understandablyreserve their judgment about particulartherapies and approaches until studiesconfirm a meaningful clinical benefit.The good news for both physicians anddiabetes patients is that some CAMapproaches have been proven to gener-ate measurable improvements in out-comes. A study published in the April2012 issue of BMC Complementary andAlternative Medicine suggests thatnaturopathy, a long-standing CAMapproach, can serve as a positiveadjunct to usual care for diabetespatients by leading to improvements inblood glucose control, patient self-man-agement behaviors, and self-efficacy.

Focus of Naturopathy“Active health promotion counselingand an emphasis on self-care form thefoundation for naturopathic medicine,”says Ryan Bradley, ND, MPH, a natur-opathic physician with BastyrUniversity’s Center for Natural Healthand lead author of the study.“Naturopathy heavily focuses on

dietary and activity counseling, stressmanagement, and select nutritionalsupplementation.”

Certain aspects of naturopathy par-ticularly resonate with patients, saysBradley, who has published severalstudies summarizing clinical outcomesof naturopathic approaches. “Althoughpatients are hearing similar messagesabout lifestyle changes from conven-tional providers, naturopathic physi-cians have more time to spend withtheir patients in setting behaviorchange goals and acknowledging thatthese are hard changes to make,” hesays, emphasizing the value in havingpatients hear multiple providers makethese recommendations. “In addition,patients who seek naturopathic caretrust the philosophy of naturopathicmedicine. This makes patients ready tolisten, and helps reinforce the messagesprovided by PCPs. Naturopathic physi-cians identify the individual barriers tochange that a patient faces and thenemphasize practical solutions for fit-ting behavior modification techniquesinto a busy lifestyle.”

Naturopathic physicians may recom-mend specific nutritional supplementsthat may have benefits for glucose control. Supplements whose benefits

for diabetes patients are supported by clinical trial evidence includechromium, common botanical medi-cines like cinnamon, vitamin D replacement, and supplements withcardiovascular benefits.

Naturopathy is a reasonableapproach to diabetes management,believes William Huff, MD, a practic-ing family physician who serves as thedirector of alternative services at GroupHealth in Seattle. “Management of type2 diabetes requires the patient toaddress a number of lifestyle issues andother factors that have a meaningfulimpact on outcomes,” he says.“Naturopathic physicians generallyhave more time to spend with patientsthan most allopathic physicians do. Sowhile PCPs may cover some of thesame topics, these discussions are oftentruncated due to limitations on visittimes. Medical doctors and natur-opaths who have close referral relation-ships often feel their skills complementeach other.”

Comparing ApproachesThe one-year prospective study, con-ducted by researchers from BastyrUniversity and Group Health, a largenonprofit integrated health system inSeattle, measured the effects of adjunc-tive naturopathic care in primary carepatients whose type 2 diabetes wasinadequately controlled. Forty GroupHealth patients with type 2 diabetesand HbA1c levels between 7.5% and9.5% and at least one additional cardio-vascular risk factor received up to eightvisits with a naturopathic physician inaddition to usual care from their GroupHealth PCP. These patients were aged21-65 years and had had no prior expe-rience with naturopathic care. The out-comes in this intervention group werecompared to changes in a cohort of 329comparable type 2 diabetes patientswho received only usual care.

On average, intervention patientshad approximately four visits with anaturopathic physician over the courseof the study. Patients received recom-

Practice Options/September 2012 3

DIABETES STRATEGY

Naturopathic Care Can Enhance DiabetesPatients’ Outcomes, Self-Management

DIABETES STRATEGY

mendations from naturopaths relatedto physical activity increases (100% ofpatients), dietary changes (95%), stressmanagement (59%), and dietary sup-plementation (74%). Supplementsmost frequently recommended includ-ed omega-3 fatty acids, chromium, anda multivitamin with B-complex;others included fiber, vitaminsD, C, and E, cinnamon, priobi-otics, bioflavonoid/polyphenol,and coenzyme Q10.

The researchers found thatpatients receiving naturopathiccare experienced a greaterreduction in HbA1c thanpatients receiving usual careonly. “We knew that we had a verysmall sample of patients, and thereforewe were apprehensive about our poten-tial to detect changes in blood glucosecontrol,” says Bradley. “However, wedid measure a 0.9% reduction inHbA1c within the first six months ofthe study in people who sought naturo-pathic care. This magnitude of changeis similar to that achieved by some dia-betes medications.” This reduction was

about a half a percentage point greaterthan that observed in the usual caregroup. Improvements in glycemic con-trol were also greater in the interven-tion group at 12 months, although thedifference was smaller and not statisti-cally significant. Changes in lipid and

blood pressure measures were minimalin both groups.

In addition, the researchers founddifferences in patient-reported out-comes such as increased frequency ofself-care practices, increased self-effi-cacy, improved motivation for pursu-ing lifestyle changes, reduced diabetesproblem areas, and improved mood.These changes were measured usingvalidated instruments including the

Summary of Diabetes Self-CareActivities (SDSCA), Patient HealthQuestionnaire-8 (PHQ-8), the Self-Efficacy Scale (SES), and the ProblemAreas in Diabetes (PAID) instrument.

In particular, intervention patients’self-efficacy scores increased signifi-

cantly over the course of thestudy. “The implication is thatpatients receiving naturopathiccare felt more able to adopthealthier behaviors,” saysBradley. He noted that the mag-nitude of improvement in moodwas unexpected. “Although wewere not focusing on mood ordepression, the mood benefits

we saw were measurable at six monthsand persisted through 12 months, wellafter some patients had stopped seeingthe naturopath. This is significantbecause mood challenges and depres-sion create barriers to behavior change.People with diabetes have elevated ratesof depression, and people with bothdiabetes and depression are at muchgreater risk of cardiovascular eventsand mortality. Meaningful improve-


Aqualitative analysis of post-intervention focus group resultsfound that comments from patients with diabetes support-ed the notion that naturopathic care was complementary to

their primary care, and that they received different benefits fromeach type of care. “Some participants also stated that their natur-opathic care helped reinforce recommendations that they hadheard from their PCP or cardiologist,” adds Ryan Bradley, ND,MPH, a naturopathic physician at Bastyr University’s Center forNatural Health.“This is a small study that will form the basis for a larger

research effort, but the take-away message is that the naturopathcan add something valuable in diabetes care,” states family physi-cian William Huff, MD, director of alternative services at GroupHealth in Seattle. Previous research has also found that naturopathic approaches

can have a positive impact on diabetes outcomes. Two retrospec-tive observational studies (in the March 2006 issue of AlternativeMedicine Review and the June 2009 issue of the Journal ofAlternative and Complementary Medicine) found an increase in

the proportion of patients who had good blood sugar control, areduction in HbA1c levels, and high rates of delivery of advicerelated to diet, physical activity, and stress management. In asmall, prospective clinical trial of a naturopathic nutritionalapproach to diabetes in the August 2011 issue of ComplementaryTherapies in Clinical Practice, Oberg et al demonstrated improvedblood sugar control as well as various improvements in self caresuch as blood glucose checks, increased frequency of following ahealthy diet plan, and increased physical activity. Finally, a retro-spective study of patients with hypertension, a common diabetescomorbidity, in the March 2011 issue of Evidence-BasedComplementary and Alternative Medicine found that naturopath-ic care led to blood pressure reduction and a significant numberof participants who met blood pressure control goals. Bradleybelieves that, taken together, study findings to date provide justi-fication for a large, randomized, controlled trial to measure theimpact of naturopathic care on clinical risk factors and patient-reported outcomes measures.

—DJN

RESEARCH SHOWS NATUROPATHIC CARECOMPLEMENTS USUAL CARE FOR DIABETES PATIENTS

PCPs might want to investigate the potential benefits of

naturopathy and other CAMapproaches and consider whether

their patients could benefit.


ments in mood suggest that the inter-vention group may have experienced afundamental change in their activationand empowerment. These patients mayhave developed new skills that gavethem more confidence and feelings ofcontrol over their health.”

Enforcing Normal CareInterestingly, the number of pri-mary care visits increased in theintervention group butremained the same in the usualcare group. “Clearly, patientswere not replacing their primarycare with naturopathic care,”Bradley notes. Three-quarters ofpatients were given advice thatreinforced their use of medica-tions prescribed by their PCP.The use of oral diabetes medicationsand insulin increased in the interven-tion group over the study period, witha number of patients initiating newtherapies. The total number of pre-scription refills also increased in theintervention group, compared with no

change in patients receiving usual care. Huff notes that some conventional

physicians do not believe in CAM.“There has been an increasing aware-ness of the value of CAM, thanks tomore education and the growing inter-action among providers,” he says. “Weare finding that an increasing numberof doctors are open to CAM, even if

they don’t fully agree with all of thetreatments.”

Washington State requires payers tocover certain CAM services, includingnaturopathy, as long as they are offeredby a licensed provider. Patients are notrequired to obtain a referral from a

PCP to access these CAM services.“With this mandate, we have seen moreintegration of care and a greater accep-tance of CAM approaches,” Huff adds.

“Care provision is all about relation-ships,” says Huff. “If PCPs can developrelationships with naturopaths whomthey trust, they can have an open con-versation in which they share and coor-

dinate care for a given patient.”“Patients who are motivated

to make changes in their behav-ior should have access to sourcesof information that will helpthem do so successfully,”Bradley states, adding that PCPsmight want to investigate thepotential benefits of naturopa-thy and other CAM approachesand consider whether their

patients could benefit. “My hope is thatPCPs remain open-minded and con-sider facilitating referrals for patientswho are interested in naturopathy andalternative therapies.” �—Reported and written by Deborah J.Neveleff, in North Potomac, Md.

Ryan Bradley, ND, MPH, a naturopathic physician at BastyrUniversity’s Center for Natural Health, believes his study onnaturopathy and diabetes in the April 2012 issue of BMC

Complementary and Alternative Medicine carries a positive mes-sage for both primary care physicians (PCPs) and patients.“Patients need all the help they can get to self-manage their con-dition and improve their long-term health,” he says. “We are hop-ing that our results are reassuring to many conventional providerswho may be apprehensive or may have questions about whatnaturopathy includes and how it may work. Naturopaths do notoffer crazy recommendations that conflict with those made byconventional physicians. In some sense, referring patients tonaturopathic physicians for adjunctive care is not that differentfrom making referrals to other medical professionals such as reg-istered dietitians and diabetes educators.” Many patients may already be seeking complementary and

alternative medicine (CAM) approaches to care. A study by Egedeet al in the February 2002 issue of Diabetes Care found thatpatients with diabetes were 1.6 times more likely to use CAM

than those without diabetes, and that diabetes was an indepen-dent predictor of CAM use. A national survey of diabetes patientsby Yeh et al in the October 2002 issue of the American Journal ofPublic Health found that 57% of patients had used a CAM ther-apy over the past year. Practicing family physician William Huff, MD, the director of

alternative services at Group Health in Seattle, acknowledges thatmany patients who seek out alternative treatments are reluctantto share their experiences with their PCPs. However, doctorsshould be open to discussing these treatments. “Even if PCPs donot support CAM approaches, it serves the patient better if physi-cians are aware of the services he or she is receiving,” he says. Forexample, the patient may be taking herbs or supplements thatmight interact with other medications or treatments they areusing. “Regardless of whether PCPs believe CAM is valuable, theystill may treat patients who are choosing to see naturopaths, chi-ropractors, or other CAM providers—and this is something theyhave to factor into the care of those patients.”

—DJN

PCPS SHOULD BE OPEN TO PATIENTS’ USE OF NATUROPATHIC PROVIDERS, RESEARCHER SAYS

“Active health promotion counseling and an emphasis onself-care form the foundation for naturopathic medicine.”

—Ryan Bradley, ND, MPH, Bastyr University’sCenter for Natural Health, Seattle, Wash.

Financial advisors are often asked tohelp doctors to protect assetsagainst future lawsuits. In doing

so, we often learn what misconceptionsphysicians have regarding how to pro-tect their assets from potential lawsuits.Some practical advice can help dispelsome of the incorrect assumptionsphysicians may make, and shed somenew light on opportunities for furtherasset protection.

Protect Practice ARA practice’s cash flow and income areits most important assets. Fortunately,the tools that protect a practice’s cashflow also typically help physicians saveon income taxes and build retirementwealth. These tools include qualifiedretirements plans (including definedbenefit plans, 401(k)s, and combina-tion plans), non-qualified plans, fringebenefit plans, captive insurancearrangements, and others.

Beyond its cash flow, the practice’saccounts receivable (AR) are an impor-tant asset. AR is what physicians actu-ally work for. A lawsuit against thepractice, caused by a wrongful act ofany of the partners, threatens all of theAR in a typical practice setup. Therehave been cases where physicians hadto work for free for a number ofmonths because the lawsuit judgmentresulting from the act of onephysician created a loss of theAR for the entire practice.Don’t let this happen at yourpractice.

Other important practiceassets include real estate, if thepractice owns any, and equip-ment. If your practice has realestate or equipment, it must separatethese assets from the main practice.There are a number of tactics that canbe used to protect real estate and valu-able equipment from potential lawsuits

against any of the physicians or thepractice itself.

Eliminate Bad HabitsThe most common asset protectionmisconception physicians have regardsshielding their personal assets frompotential lawsuits. Asset protectionattorneys approach this challenge inmuch the same way that a physicianapproaches the experience of being apatient. Like physicians, asset protec-tion professionals first will try to get aclient to avoid bad habits. Bad financialhabits of physicians might includeowning property in their own name,owning it jointly with a spouse, oroperating a medical practice with busi-ness assets exposed.

Financial advisors use an asset pro-tection rating system to describe aclient’s overall level of risk, from -5(totally vulnerable) to +5 (superior pro-tection). Risks such as exposing a prac-tice’s business assets or owning proper-ty in a physician’s own name are exam-ples of a -5 risk situation.

Before implementing any sophisti-cated asset protection planning, advi-sors attempt to move the client from a -5 to at least a low negative number orzero. This is accomplished by eliminat-ing any of the bad habits mentionedearlier, and others. Any physician whohas business assets exposed and owns

personal assets in his or her own nameor jointly with a spouse should talk toan asset protection advisor immediate-ly. It’s not safe to linger too long in

the -5 category, as it’s only a matter oftime until you get “sick.”

Protecting AssetsWhen a physician sees a patientwith a harmful condition ordisease, he or she tries to treatit. Financial advisors try totreat physicians to solve theirlawsuit vulnerability, using par-ticular structures to protecttheir assets.

Physicians who want goodbasic asset protection, but do not wantto pay for more advanced tools, shouldconsider using basic asset protectiontools like family limited partnerships

CAPITAL IDEASPhysicians Should Consider a Range of Tools to Protect Assets From LawsuitsBy David Mandell, JD, MBA

Continued on page 10


David Mandell, JD, MBA is aprincipal of the financial consult-ing firm OJM Group (www.ojmgroup.com). He can be reached at877-656-4362. To reach him, or toobtain a free (plus $10 shippingand handling) copy of For DoctorsOnly: A Guide to Working Lessand Building More, call 877-656-4362. Mandell’s podcast inter-view, “Indexing Strategies toBuild Wealth in Up, Down, andSideways Markets,” can be foundat www.diabetesoptions.net.

The tools that protect a practice’scash flow also typically help physi-cians save on income taxes and

build retirement wealth.

(FLPs) and limited liability companies(LLCs). These tools will provide goodasset protection against future lawsuits,allow for maintenance of control by thephysician, and can provide income andestate tax benefits in certain situations.

These tools generally will keep acreditor outside the structure through“charging order” protections. Theseprotections typically enable a physicianto create enough of a hurdle againstcreditors to negotiate a favorable settle-ment. FLPs and LLCs are thereforeoften referred to as the building blocksof a basic asset protection plan.Advisors may also layer in domesticirrevocable trusts, such as life insur-ance trusts or charitableremainder trusts.

These tools will provide ade-quate asset protection, raisingthe physician’s asset protectionscore to +2. Obviously, theirasset protection benefitsdepend upon proper draftingof the documentation, proper mainte-nance and respect for formalities, andproper ownership arrangements. If allthese are in place, the physician canenjoy basic asset protection for a rela-tively low cost.

Taking Protection FurtherFor many physicians, a basic asset pro-tection plan, which has some potentialvulnerability, is not good enough. A +2on their asset protection score is notenough to give them the psychologicalcomfort they want. Other physiciansrealize that the best protection comesfrom tools that actually can help themcreate wealth. These physicians utilize

advanced structures to put themselvesat a +4 or +5, the ultimate asset protec-tion score. Like a physician prescribingthe best medicine or using the mosteffective surgical procedure, asset pro-tection consultants rely on a number oftools to provide ultimate asset protec-tion. These include qualified retirementplans, non-qualified and fringe benefitplans, captive insurance companies(CICs), and funding of exempt assets.

A qualified retirement plan complieswith certain Department of Labor andInternal Revenue Service rules.Qualified retirement plans includepension plans, profit sharing plans,money purchase plans, 401(k)s, and

403(b)s. Under federal bankruptcy law,and under nearly every state’s law, theseplans are totally protected against law-suits and creditor claims, enjoying +5protection status.

Non-qualified plans and fringe benefit plans allow a physician to putfunds away at the practice level andenjoy them in retirement. These typesof plans can be used in addition toqualified plans. In many states, thesecan be funded by exempt (+5) assetclasses. Even in states where there is no(+5) exemption, a (+2) LLC can typi-cally be used to provide a solid level ofprotection.

When using a CIC, the owners of a

medical practice actually create theirown properly licensed insurance com-pany to insure all types of risks thatmight be incurred in the practice. CICscan cover economic risks (drops inreimbursement), business risks(destroyed electronic medical records),litigation risks (coverage for defense ofharassment claims or Health CareFinancing Administration audits), andmedical malpractice risks (keepingsome risk in the CIC and reinsuring therest). To maximize the protection of theCIC, many physicians establish truststo own the CIC.

Under each state’s laws, certain assetsare absolutely exempt from creditor

claims, thereby achieving a +5status. Many states provideunlimited exemptions for cashwithin life insurance policies,annuities, and primary homes.Physicians should seek an advi-sor to help find out the exemp-tions in their states, and distrib-

ute their funds accordingly.Asset protection planning, like any

sophisticated multidisciplinary effort,is a matter of degree. Nothing in life is100% certain. For asset protectionplanning, this adage holds true. Wheninitiating an asset protection plan,physicians should make sure theyunderstand the costs and benefits asso-ciated with the various tools employed.These tools will help physicians notonly protect the wealth they havealready built, but may assist them inbuilding greater after-tax wealth forretirement and beyond. Remember toconsult with a qualified financial advi-sor to begin planning your strategy. �


CAPITAL IDEAS

The first misconception most physicians have is that theyshould only protect their personal assets from potential law-suits. Nothing could be further from the truth. The practice’s

assets are actually the most vulnerable to lawsuits, especially in agroup practice. That is because any malpractice claim or employee

claim against any of the doctors threatens all of the assets of thepractice. In other words, a physician in a group practice is under-writing all the acts and omissions of all his or her partners, to theextent of his or her practice’s assets.

—DM

PRACTICES’ ASSETS, NOT PERSONAL ASSETS, ARE MOST VULNERABLE TO LAWSUIT

Continued from page 6

Like physicians, asset protectionprofessionals first will try to get a

client to avoid bad habits.


The future of the U.S. health caresystem is bleak, according tomost young physicians surveyed

by The Physicians Foundation(www.physiciansfoundation.org), aBoston, Mass.-based nonprofit organi-zation that promotes the work of prac-ticing physicians and improves healthcare quality through grants andresearch. The survey also assessedyoung physicians’ satisfaction withtheir current practice arrangement.

Telling NumbersOf the 500 physicians surveyed (40years of age and younger), the majority(57%) say they are pessimistic aboutthe future of the U.S. health care system(Figure 1, page 16). Of those,more than 30% identifiedthemselves as highly pes-simistic. Twenty-one percentof the physicians are neutralabout the future of U.S. healthcare, while 22% are opti-mistic—with only 4% sayingthey are highly optimistic.While reasons for the consid-erable pessimism vary, newhealth care legislation tops the list, withmore than twice as many respondents(49%) thinking the Patient Protectionand Affordable Care Act (PPACA) willhurt their practices compared withthose who think it will have a positiveeffect (23%). The PPACA, upheld asconstitutional by the U.S. SupremeCourt on June 28, 2012, has been hailedas President Barack Obama’s signaturedomestic policy achievement.

In stark contrast with their over-whelmingly pessimistic views regard-ing the future of the U.S. health caresystem, most young physicians (80%)are satisfied with their current practicearrangement. Thirty-five percent ofphysicians surveyed are highly satis-fied, and 45% are somewhat satisfied,

the survey found. Most respondentsexpect to remain with their currentpractice for at least the next eight years(52%) and, not surprisingly, manyyoung physicians (39%) desire someform of ownership position withintheir current practice in the nearfuture. “I feel like I could run my ownpractice better than it is being run bymy boss, the current owner,” said onerespondent.

Although satisfaction was relativelyhigh across all practice groups, the sur-vey revealed some differences amongthese subsets. For example, hospital-based physicians anticipate shortertenures (≤2 years) compared with theother practice groups surveyed.Hospital-based physicians also tend to

be part of larger group practices, apractice arrangement preferable to only12% of respondents. They are signifi-cantly more likely to consider changingtheir current arrangement (43%) com-pared with primary care physicians(23%) and medical/surgical office-based physicians (27%), suggesting ahigher level of dissatisfaction com-pared with the other groups.

Money is the most important factorin the choice of practice arrangement,and in the decision to change practicearrangement, according to the survey.Most respondents (65%) citedincome/cash flow as prominent in theirworkplace decision. More than half ofyoung physicians (53%) consideredemployment security in their practice

choice. However, 25% of physicianssaid they took the only job available.

Regardless of practice type, youngphysicians declared that they wouldlike to have some form of ownership intheir practice. Among the total sample,26% currently have an ownership posi-tion, and 39% aspire to such a position.Of those who have changed or consid-ered changing their practice arrange-ment, 10% cited the need for autono-my. “I considered changing due to [the]desire to be a partner-owner and workfor myself,” said one respondent.Financial and economic issues, howev-er, remained the most compelling rea-son (31% of respondents) for switch-ing—or contemplating switching—practices.

A Troubling TrendThe level of pessimism iden-tified by the survey is both“surprising” and “troubling,”says Lou Goodman, PhD,president of The PhysiciansFoundation and chief execu-tive officer of the TexasMedical Association. “Onewould think the level of pes-

simism would be low, given how mucheffort and time they have put into it,and the best and brightest students arestill going into medicine,” Goodmansays. “What I think they find is thattheir expectations aren’t being met.And if these doctors are pessimistic,and they have gone through all thisincredible training and feel their expec-tations are not being met, we have anational problem. Already, we have ashortage of 150,000 primary carephysicians, and then we will have 30million more [insured patients] fromthe [ACA]. We will need more doc-tors.”

Self-identified optimists cited theirreasons for being optimistic, too. Theseincluded better patient care, better

HEALTH CARE TRENDSAffordable Care Act Elicits Largely Negative Reactions From Young Physicians

When asked, “Why do you feel opti-mistic about the future of the U.S.health care system?” some of the

responses were: “It has to get better,”and, “It can’t get any worse.”

health care accessibility, and other gen-eral health care improvements, with noone reason standing out. However,even the optimists’ responses often hadnegative undertones. When asked,“Why do you feel optimistic about thefuture of the U.S. health care system?”some of the responses were: “Ithas to get better,” and, “It can’tget any worse.”

One respondent said, “I ammostly optimistic but havepessimism towards Congressand the public’s ability to enactdecent change and regulation.”Another optimist said, “I amconcerned about the efforts and actionsof those in Washington [who are] moreworried about [themselves] than thecurrent health care system, which isvery broken right now.”

For unknown reasons, primary carephysicians (n=250) tend to be signifi-cantly less negative about the impact of

the PPACA compared with membersof the other practice types identified inthe survey: medical/surgical office-based specialists (n=175) and hospital-based specialists (n=75). Twenty per-cent of primary care physicians identi-fied themselves as somewhat positive

about the effects of the PPACA on theirpractices, compared with only 8% ofhospital-based physicians. Thirty-twopercent of hospital-based physicianssay they are somewhat negative aboutthe new health system reform legisla-tion compared with 18% of primarycare physicians and 21% of

medical/surgical office-based physi-cians. Regarding the future of the U.S.health care system in general, primarycare physicians are significantly moreoptimistic overall (27% of respondents)compared with medical/surgical office-based physicians (16% of respondents).

Looking Forward“With the Supreme Court’sdecision to keep the PPACAintact, policy makers must nowaddress the ongoing challengesfaced by America’s physiciansand their patients,” notesGoodman. “From the very

beginning of the health care debate,The Physicians Foundation unequivo-cally stated that physicians need to beincluded in the formulation of any leg-islation that carries such significantimplications. Specific issues, such aswidespread physician shortages andsubstantial burdens related to running


HEALTH CARE TRENDS

Not surprisingly, many youngphysicians (39%) desire some formof ownership position within theircurrent practice in the near future.

The Affordable Care Act (ACA) may have leaped a hurdle whenthe U.S. Supreme Court judged the health care reform legisla-tion to be constitutional on June 28, but it may face its biggest

challenge yet, according to an article in the July 2, 2012 issue of theNew England Journal of Medicine. With the November 6 presiden-tial and congressional elections looming, the fate of the ACA hangsin the balance. In fact, one of the fears of young U.S. physicians,captured by a survey conducted by The Physicians Foundation, isthat the ACA will be overturned by the next U.S. president. “I feelthe next president will reverse Obamacare,” said one respondent.“The policy consequences of the election will be most immedi-

ately and compellingly felt in connection with health care reform,”says John E. McDonough, DrPH, the author of the New EnglandJournal of Medicine article. “In January 2013, if Democrats holdthe White House and Senate and regain control of the House, theACA will be implemented mostly as constructed. If Republicanscapture the White House and Senate and retain House control, theACA will face major deconstruction in 2013,” he says. In the meantime, the positive Supreme Court ruling allows for

the continued implementation of health care innovations such asaccountable care organizations, patient-centered medical homes,the Prevention and Public Health Fund, the Patient-CenteredOutcomes Research Institute, and state-optional Medicaid expan-

sion—an option on which some Republican governors havefaded. However, attractive financial incentives are expected toentice a number of states to expand Medicaid. The federal gov-ernment plans to subsidize Medicaid expansion 100% between2014 and 2016, and then no less than 90% by 2020—a consid-erably more magnanimous offer than past federal contributionsranging from 53% to 83%.Most states have yet to determine whether they will assist con-

sumers and small businesses in purchasing health care coverage,or whether they will rely on the federal government for assistance.For many states, this decision will rest on the outcomes of theNovember elections—specifically, whether the ACA survivesbeyond January. If so, McDonough notes that many states willdevelop their own exchanges in lieu of ceding insurance marketsto the federal government. The magnitude of the ACA is largely unappreciated, according

to McDonough. “The ACA is the first U.S. law to attempt compre-hensive reform touching nearly every aspect of our health system,”he says. Unfortunately, the current political climate is not a collab-orative one. “Perhaps we will still get there, as the Supreme Courtruling begins to recede in the rearview mirror and the dust fromthe November elections settles. For now, there are still manyobstacles ahead.” —SC

HEALTH CARE REFORM CONTINUES TO FACE OBSTACLES

Continued on page 16

medical practices, continue to be areasof concern that have not beenaddressed by policy makers.”

“Regardless of the Court’s decision,significant health care reform is alreadywell underway in this country. As thelandscape changes due to marketplaceforces as well as government policies,The Physicians Foundation standsready to offer its knowledge, informa-tional resources, and perspectives tomeet the needs of patients and physi-cians,” Goodman concludes.

For an in-depth perspective on thesocietal and economic issues that areinfluencing current health care reformefforts, download The PhysiciansFoundation’s report for private practicephysicians, “A Roadmap for Physiciansto Health Care Reform,” at www.physiciansfoundation.org/FoundationReportDetails.aspx?id=288. �—Reported and written by Stacy Clapp, inOrangeburg, N.Y.

Continued from page 12


FIGURE 1. YOUNG PHYSICIANS’ PERCEPTION OFTHE IMPACT OF THE AFFORDABLE CARE ACT

HEALTH CARE TRENDS

Fears about excessive and/or botched government involve-ment and an overriding emphasis on the bottom line ratherthan on the quality of patient care are recurring concerns

expressed by young physicians with negative outlooks regardingthe future of U.S. health care, according to a survey conducted byThe Physicians Foundation. Other concerns include increased reg-ulatory burdens and medical liability insurance premiums.Comments from the physicians surveyed included the following:• “I don’t trust government to do the right thing for patients andphysicians or to enact lasting improvements.”

• “The U.S. health care system isn’t concerned about the employ-ees or patients; they’re just concerned about the money.”

• “Government control is a recipe for disaster. They cannot run abusiness and cannot control expenses. How could they do agood job on health care? It is a real joke!”

• “Government-controlled health care will be the downfall.Anyone who has worked in a government environment such as[Veterans Affairs (VA)] would know this—ask any vet whoreceives their care through VA how good the system is!”

• “The current administration is only concerned with money andmaintaining their power and socialism.”

• “Government regulation has too many strings attached. [It] has

not been well thought out. [It] will bankrupt the country. [Weare] pushing toward socialist medicine.”

• “I do not feel optimistic because of all the increased regulatoryburdens on physicians. There will be an increased shortage ofphysicians to provide primary care and decreased access tocare.”

• “The very reasons why people come to the U.S. to obtain care(research, quality, availability, cutting edge, good physicians,etc.) are being taken away one at a time. The changes that arebeing made are not made with the patient in mind, but with the‘bottom line’ economically in mind. Not once is the patientmentioned in all these changes.”

• “I think the government is destroying health care.”• “Large amounts of money are being spent on things outsideactual health care; CEO bonuses, pharmaceuticals, malpracticeinsurance premiums, lawyers, etc. This, accompanied by the new‘Customer Service’ initiatives that reward physicians who prac-tice bad medicine, is clouding the future of medicine.”

• “Physicians have no say; rather, insurance companies dictatecare. The focus is saving money for insurance companies, notpatient care.”

—SC

YOUNG PHYSICIANS VOICE DOUBTSOVER THE FUTURE OF U.S. HEALTH CARE

Highly positiveSomewhat positiveNeutralHighly negativeSomewhat negative

How do you feel the Affordable Care Act will affect your practice?

21%

28%

29%

17%

6%


Physicians who use electronichealth records (EHRs) are lesslikely to be sued for malpractice

compared with those who use paperrecords, suggests a study published inthe June 25, 2012 issue of Archives ofInternal Medicine. Investigators report-ed an approximate six-fold reductionin the rate of malpractice claims whenEHRs were used instead of paper med-ical records.

Collecting DataThe study authors collected and exam-ined closed-claims data for the years1995-2007 from 275 physicians insuredby a Massachusetts malpractice insurer,as well as 189 random sample surveyscollected from Massachusetts physi-cians in 2005 and 2007. Because thestudy was conducted over a long periodof time, a number of practices adoptedEHRs during the study period, allow-ing for both pre-EHR and post-EHRassessment. Of the 189 physicians sur-veyed, 14.3% reported at least one mal-practice claim in 2005 or 2007, thereport says. The closed-claims datashowed that 12% of 275 physiciansfrom multiple surgical and medicalspecialties had 51 unique claims duringthose same time periods, it says.Notably, 49 of those claims occurredbefore the adoption of EHRs; only twoclaims were made after EHR adoption,neither of which resulted in a payment,the report says.

Results were most notable in general surgery and internal medicine,the practice specialties that saw thehighest number of pre-EHR claims (13and eight, respectively) in this study.After EHR adoption, no malpracticeclaims were made in general surgery,and only one (which did not result inpayment) in internal medicine, thereport says.

“By examining all closed claims,

rather than only those for which a pay-ment was made, our findings suggestthat a reduction in errors is likelyresponsible for at least a component ofthis association, since the absolute rateof claims was lower post-EHR adop-tion,” say the investigators.

Other factors may partially explainthe observation of fewer malpracticeclaims following the implementation ofan EHR. For example, physicians whoare early adopters of new technologymay practice medicine in a way thatmakes them less likely to incur mal-practice claims, the study authors sug-gest. Or, use of other electronic plat-forms besides an EHR may contributeto a lower incidence of malpracticeclaims, they say.

However, this recent study supportsand amplifies the conclusions of priorstudies by the same authors, suggestingthe potential of EHRs to lower the riskof paid claims among physicians usingEHRs. The investigators’ prior researchfailed to show a causative relationshipbetween EHR adoption and paid mal-practice claims. It also lacked the powerto determine whether the actual rate ofclaims was attributable to EHR adop-tion or to proportionately fewer claimsleading to payment.

Additional EHR BenefitsThese data add to a growing body ofresearch showing other merits ofEHRs, including enhanced documen-tation, increased efficiency of office vis-its, and better tracking and manage-ment of patients. It has been speculatedthat a reduction in medical errors (andpossible associated malpractice claims)could be another boon of EHR adop-tion. Such a system can help addresssome of the problems that may lead tomedication errors, such as difficultyaccessing patient information in atimely manner, suboptimal prescribingpractices, and nonadherence to clinicalguidelines.

“Implementation of EHRs mayreduce malpractice claims and, at theleast, appears not to increase claims asproviders adapt to using EHRs,” thestudy authors write. “The reduction inclaims seen in this study among physi-cians who adopted EHRs lends supportto the push for widespread implemen-tation of health information technolo-gy,” they conclude. The full report canbe viewed at http://archinte.jamanetwork.com/article.aspx?articleid=1203517.�—Reported and written by Stacy Clapp, inOrangeburg, N.Y.

DEMONSTRATING VALUEEHRs Reduce Incidence of Malpractice Lawsuits, Study Shows


T he American College ofPhysicians (ACP; www.acponline.org) and the Society of

General Internal Medicine (SGIM;www.sgim.org) explore the ethicaldimensions of the patient-centeredmedical home (PCMH) in a new posi-tion paper published by the Journal ofGeneral Internal Medicine: “The Patient-Centered Medical Home: An EthicalAnalysis of Principles and Practice.” Thetext is also available on ACP’s website.

In the paper, ACP and SGIM examinehow the PCMH meets four fundamentalethical principles by facilitating apatient-centered approach to care,which reaffirms the core principles ofmedical ethics and professionalism;access to a personal physician who pro-vides coordinated, comprehensive carethrough an integrated team; involve-ment of patients, families, and caregiversin care, thereby supporting respect for

patient wishes and autonomy; and prac-tice-based system improvement andexplicit attention to quality.

The organizations also note practicalbarriers to meeting some goals. Forexample, access to a personal physicianresponsible for coordination of care pre-sents a challenge because of the shortageof primary care physicians.

ACP and SGIM say that the PCMHstrongly supports the “bedrock princi-ple” of patient autonomy because theconcept of patient-centeredness thatforms its foundation emphasizes patientengagement, provision of health infor-mation to patients, and involvement ofpatients in shared decision making. Byintegrating system improvements intothe practice environment, the PCMHcould help physicians meet the ethicalobligations for quality improvementand patient safety, ACP and SGIM say.

PRACTICE MANAGEMENT NEWSACP, SGIM: PCMH Model Aligns With Principles of Medical Ethics, Professionalism

HHS OFFERS STATES INCENTIVES TO TEST MULTI-PAYER PAYMENT, DELIVERY SYSTEM IMPROVEMENTS

Physicians reported moderateshifts in compensation in 2011,according to respondents to the

Medical Group ManagementAssociation (MGMA) PhysicianCompensation and Production Survey:2012 Report Based on 2011 Data. Forexample, primary care physiciansreported a 5.16% increase in mediancompensation. Physicians in familypractice (without OB) reported medianearnings of $200,114, and those inpediatric/adolescent medicine earned$203,948 in median compensation.Internists also reported a 5% increasein compensation.This year’s report provides data on

more than 62,000 providers andincludes data for providers in morethan 170 specialties. The report alsocontains various performance ratiosillustrating the relationship betweencompensation and production anddata on collections for professionalcharges and work RVUs.The full report is available for pur-

chase at http://tinyurl.com/7y5r33w.

MGMA PHYSICIANCOMPENSATIONREPORT SHOWSMODERATE SHIFTSIN 2011

Health and Human Services Secretary Kathleen Sebelius inJuly announced a new opportunity made possible by theAffordable Care Act to help states design and test improve-

ments to their health care systems that would bolster health carequality and decrease costs. Through this initiative, states will work with a broad coalition

to design or test multi-payer payment and delivery systemimprovements to health care systems for Medicare, Medicaid, andChildren’s Health Insurance Program (CHIP) beneficiaries whileeliminating unnecessary spending. Given the broad scope ofthese multi-payer models, successful innovations are expected tobenefit both privately and publicly insured residents of participat-ing states.Many states are already engaged in these efforts. Examples of

ongoing health care innovation include statewide primary carenetworks supported by advanced health information technologysystems and models that coordinate care across primary care

providers, specialists, and hospitals. The State Innovation Modelsinitiative, with support from the Center for Medicare andMedicaid Innovation, will build upon this work and achievegreater results through state-federal partnership.States can apply for either Model Testing awards to assist in

implementing their already developed models, or Model Designawards that will provide funding and technical assistance as theydetermine what type of system improvements would work bestfor them. Up to five states will be chosen for the initial round ofModel Testing awards and up to 25 states will be chosen forModel Design awards. Up to $275 million is available in funding,including $50 million for Model Design and $225 million forModel Testing. For more information on the State Innovation Models initiative

and to learn more about how states can reform health care payment and delivery, visit innovation.cms.gov/initiatives/State-innovations.


Aetna Adapts to Changing Market by Embracing ACO Model

Repeal of Medicare’s Sustainable Growth Rate (SGR) is essen-tial, but repeal by itself will not move Medicare to betterways to deliver care,” David L. Bronson, MD, FACP, president

of the American College of Physicians (ACP), told the House Waysand Means Subcommittee on Health on July 24. “We need to tran-sition from a fundamentally broken physician payment system toone that is based on the value of services to patients, building onphysician-led initiatives to improve outcomes and lower costs.” Bronson described how physician organizations’ efforts and ini-

tiatives to promote high quality care could contribute to a solu-tion to fixing the Medicare physician payment system. He sug-gested that Congress establish a transitional value-based pay-ment initiative, so that physicians who voluntarily participate in physician-led programs to improve quality and value would be

eligible for higher Medicare updates. As part of this transitional program, he recommended that high-

er Medicare updates be provided to physicians in recognizedpatient-centered medical home (PCMH) and patient-centeredmedical home neighborhood (PCMH-N) practices. Bronson also recommended that Medicare payment policies

support efforts by the medical profession to encourage high-value,cost-conscious care. Finally, he urged that existing Medicare qual-ity improvement programs—meaningful use standards for elec-tronic health records, e-prescribing incentive payments, and thePhysicians Quality Reporting System—be improved and harmo-nized, by providing more timely performance data to physiciansand having greater consistency in the measures and reportingrequirements for each program.

ACP PRESIDENT: PHYSICIAN-LED QUALITYINITIATIVES COULD SOLVE MEDICARE PAYMENT PROBLEMS

As a result of the Affordable CareAct, over 5.2 million seniors andpatients with disabilities have

saved over $3.9 billion on prescriptiondrugs since the law was enacted. TheCenters for Medicare & MedicaidServices on July 25 also released datashowing that in the first half of 2012,over one million people with Medicaresaved a total of $687 million on pre-scription drugs in the “donut hole”coverage gap, for an average of $629in savings this year.These savings are automatically

applied to prescription drugs thatpatients with Medicare purchase, afterthey hit the Medicare Part D prescrip-tion drug coverage gap, or “donuthole.” Coverage for both brand nameand generic drugs in the gap will con-tinue to increase over time until 2020,when the coverage gap will be closed. More information on how the

Affordable Care Act closes theMedicare drug benefit coverage gap“donut hole” can be found athttp://tinyurl.com/7dtxzzl.

HEALTH CARE LAWSAVES PATIENTS WITHMEDICARE $3.9 BILLIONON PRESCRIPTION DRUGS

Nashville, Tenn.-based managedcare market intelligenceprovider HealthLeaders-

InterStudy finds that Aetna is adaptingto the changing health care market byfocusing on key markets and embrac-ing the accountable care organization(ACO) model. This strategy will helpthe company thrive in a post-healthcare reform landscape. Aetna’s strategylikely will pay off if the company canbetter control costs by coordinatingcare, according to the National MCOAnalyzer: Aetna report.

Aetna’s Accountable Care Solutionsdivision offers information technology(IT), risk management, analytics, andorganizational expertise to providergroups seeking to form ACOs. Aetna’sACOs will set their own performancemeasures and incentives around costsavings and clinical quality but medica-

tion adherence will be a major focus. Aetna’s involvement with ACOs will

run the gamut from an IT provider andmanagement partner to the formationof a joint venture that creates an ACOwith risk sharing and a new MedicaidMCO.

The National MCO Analyzer: Aetnaanswers the following questions:• What is Aetna doing to make sure it

can offer health care products at acompetitive price when it cannot winthe deep provider discounts that itslarger market competitors can?

• How is Aetna allowing plan sponsorsto customize benefits to encourageprescription compliance?

• What will the likely effect be in themarkets where the Aetna ACO col-laborations exist?An abstract of the report can be read

at http://tinyurl.com/843tey6.

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