Impact of the ACA (Part III): Physicians making changes to adapt to their new reality
MedPanel hosts a community of more than 400,000 physicians, nurses, and hospital executives, and from February 27 – March 6, 2015, we conducted a survey to understand how the Affordable Care Act (ACA) has impacted them. 400 physicians across all specialties answered our questions without compensation, and the results were striking. The gains and pains were shared unequally across our physician community, with physicians in small and solo practices much more likely to respond that they had lost patients since the enactment of the ACA, and physicians in large practices and hospitals more likely to say they had gained patients. While physicians were generally neutral to negative that the ACA had improved the access to care, and improved the quality of that care, physicians in these small practices were much more likely to hold these negative views. (Read more about these results here.)
We investigated the trends that were driving patients from small and solo practices towards hospitals and large networks, and identified four major trends from our physicians’ input (learn what those trends were here). Unfortunately, most were beyond physicians’ control. In Part III of our series on the impact the ACA, we review the changes that have been wrought on physicians’ compensation and enjoyment in practicing their craft. We then look at the changes they are making to adapt to their new environment.
Bad news first: Almost half of solo practitioners are considering leaving medicine entirely, but important sacrifices are being made by physicians in all settings
We asked physicians to tell us what changes they were making to adapt to the ACA, but we were astounded at the percentage of physicians who said they just couldn’t or wouldn’t make it work anymore. Roughly a quarter of physicians in hospitals and large practices said they were considering leaving medicine entirely, while nearly a half of physicians in small and solo practices said the same! (See top row in the figure below.)
In the meantime, many physicians indicate that they are seeking supplemental income opportunities outside of their clinical practice and are pushing to see more patients per week to make ends meet, even taking less vacation to keep their volumes up! More so than their counterparts in large practices and hospitals, small practice physicians are restricting the types of insurance they accept, likely in response to the lower reimbursement rates offered by CMS and possibly also restricting patients with high copay / deductible plans who may not end up paying the physician for their services out of pocket.
Roughly 20% of physicians in small and solo practices say they are spending more of their working time with patients, and cutting out time for sales reps or attending meetings where they learn about new products. Only 9% of physicians in independent large practices have had to make the same change, but interestingly, 22% of hospital docs have. As hospitals push hard for efficiency from their employees, physicians in this setting are seeing their ability to participate in these activities constrained just as much as solo practitioners, meaning large independent practices may become the target of choice for sales reps. The same trend is visible when physicians are asked about whether they have had to reduce their attendance to conferences.
So what is driving these changes, and why are more physicians in small and solo practices having to make sacrifices than those in large practices and hospitals?
Most physicians are working harder to make less under the ACA
Several of the adaptations we saw in the results above are driven by the new financial environment in healthcare. The ACA vowed to contain the United States’ spend on healthcare, and that reduction is being felt by physicians through lower reimbursements. However, it is physicians in small and solo practices who are bearing the majority of the reduction as many hospital physicians are salaried employees whose compensation has remained steady. Not entirely sheltered, 39% of physicians in hospitals and large health networks reported a decrease in their compensation per patient, but that pales in comparison to the 79% of physicians in solo practices who report making less money per patient since the ACA went into effect.
Physicians in solo practices are also seeing the largest magnitude of change, reporting that their compensation per patient has decreased 18% on average compared to only 14% for hospital and large health network physicians. To put that in context, these physicians need to work an extra day every week (assuming a 5 day workweek currently) just to make the same amount of money as they made prior to the ACA.
Not in it just for the money? The ACA has decreased the enjoyment of practicing medicine for a strong majority of physicians too.
71% of physicians disagree that the ACA has increased their enjoyment of practicing medicine; again, this negative sentiment is held more strongly by physicians in small or solo practices. 81-84% of physicians in these smaller settings held this view compared to 53-57% of physicians in hospitals and large practices. That doesn’t mean many physicians in larger settings are happier practicing medicine since the ACA came along – only 13-14% would agree with that statement.
High deductibles of ACA-inspired health plans keep patients from following physicians’ recommendations
One of the key areas of frustration for physicians is when patients simply won’t follow their recommendations. In a follow up to our previous finding that 59% of physicians disagreed that the ACA had improved the quality of care their patients received (as opposed to 16% who agreed), we looked at one of the areas that has changed quite a bit. Many of the insurance plans offered through the ACA offer low premiums to appeal to the previously uninsured, but these low premiums are offset through very high deductibles and copays. As one physician put it, “Their deductibles are so high that they are avoiding care. They want to come but can’t afford it. Basically they have insurance only for catastrophic medical issues, but otherwise they have none.”
These types of insurance plans are, therefore, a probable source of physicians’ dissatisfaction with how the ACA has impacted the quality of medicine. Even when patients do visit, these health plans can have an inhibitory effect on the ability of the physician to offer care in the way they wish. 76% of surveyed physicians agreed that high deductible and high copay directly inhibit their patients’ willingness to accept the diagnostic and other tests that physicians suggest. Many of these tests must be paid for directly by patients with these high deductible plans, and are therefore one of the key areas in which care is likely skipped.
Again, the results indicate an even stronger negative sentiment among physicians in small and solo practices – 55% of solo practitioners completely agreed that these plans impeded their recommendations from being enacted compared with only 35% of physicians in hospitals or large health networks who completely agreed. This disparity is alluded to in some of the responses we heard in Part II of our series, in which physicians said that hospitals were much more able than solo doctors to sell add-on services and diagnostics to maintain their profitability from these types of patients.
Perhaps there was no way to send 10 million new patients through the healthcare system and at the same time constrain the overall cost without physicians feeling tremendous pain in that transition. Still, the magnitude of dissatisfaction in the small and solo practice settings is surprising. With nearly half of physicians in these settings saying they are thinking about leaving medicine entirely, it is clear that the period of change is not nearly over. We predict a continued consolidation of small practices into larger as physicians look for financial security.
For the industry, this shift portends important changes in how marketing and sales are conducted. As seen in the first figure, physicians in hospital and large network settings are more commonly restricted from seeing sales reps, attending meetings, and attending conferences than their peers in large independent practices. Detailing will need to become even more focused on digital channels that can squeeze through the barriers hospitals are erecting to keep their patient volumes as high as possible. Sales reps will have even fewer call points, and even fewer of those that are willing to see them.
Clearly, it won’t only be the physicians who need to adapt to the ACA’s new healthcare environment.
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