The country doctor with his black leather bag may be becoming the purview of the nostalgic, up there with Route 66 and RC Colas, but in Texas the independent physician is alive and well. While on the national scale, the percentage of US physicians who practice outside of a hospital or large group plummeted from 57% in 2010 to 39% in 2012, about 60% of Texas physicians practice independently. It's an important part of the state's cultural identity, what Merritt Hawkins senior VP Travis Singleton called the state's "independent DNA."
But across the country, the independent physician is disappearing, and while Texas might be the Alamo, it can't remain immune forever. According to the AMA, the percentage of physicians practicing independently has been steadily declining by 2 percentage points per year, with the drop expected to have grown. The same pressures that face independent physicians in other states apply equally to those in the Lone Star state.
According to an Accenture survey, 87% of physicians who abandoned their independent practice blamed the high cost of doing business. 61% blamed managed care and over half cited EHRs. Independent physicians—particularly specialists—have historically based their business model on the fee-for-service arrangement. As the nation's healthcare system lumbers unevenly towards a value-based model, these same physicians often find themselves without the tools that health systems have at their disposal to comply with new federal regulations.
"It's a challenge for small physicians and small practices to afford the kind of software they need to monitor the care continuum and to abstract the data necessary to report that they've complied with the standardized evidence-based practices," BDO's Chief Physician Executive Dr. William Bithoney told Healthcare Dive.
"Texas is the last bastion of fee-for-service," Singleton told Dallas/Fort Worth Healthcare, and it's because of the determination of independent physicians to remain autonomous. But with that payment model becoming increasingly outmoded and no way to become involved in the kinds of value-based contracts that hospitals, with their size and leverage, have available to them, how long will independent physicians be able to hold out?
In Texas, the answer may be the very model that has traditionally been inaccessible to independent physicians: The accountable care organization.
Practice Edge: A service organization, not an ACO
Practice Edge, the new company formed as a partnership between the Texas Medical Association and minority investor Blue Cross Blue Shield of Texas, has been widely reported to be an ACO. In fact, it's not an ACO at all. It's a service-based organization that will allow physicians to access tools, education and technology—and in some cases financial assistance—to become involved in both public and private coordinated care organizations. Costs to physicians will be based on which services they take advantage of and in some cases will work similarly to CMS' Investment Model, which provides financial support to new ACOs in rural or underserved areas to make the infrastructure investments necessary to successfully implement population care management.
"Physicians in Texas by nature would like to remain autonomous and independent, but they haven't had access to the tools and technologies and leadership and strategies that are needed to set up these programs," BCBS Chief Medical Officer Dan McCoy said.
"It makes sense," said McCoy. "Hospital systems had the technology, capital and leadership to set [ACOs] up. We're hoping to help independent physicians set up these programs in a physician-centric model outside of the normal hospital model."
As well the nominal assistance in coordinating care efforts and helping to form ACOs, that "help" also includes assistance with credentialing, identifying drug and pharmaceutical discounts and determining the most cost-effective facility to deliver care, said TMA CEO Lou Goodman.
The company will also help physicians select an EHR that is interoperable with perhaps the most notable service that Practice Edge offers: A platform that allows independent physicians access to the same population health management tools that larger organizations have at their disposal.
Likely to be developed as an HIE, the platform will be owned fully by the company and accessible only to participating physicians. According to Goodman, the company hasn’t yet negotiated with BCBS whether or not the payer will be sharing any of its patient data, but McCoy hinted at the holistic data that the insurer might be able to make available to a participating physician. In describing what a population health effort might look like for an independent practice, McCoy said:
"When a family practice has a patient that gets admitted to the hospital, they may not even know that the patient was admitted. Bringing that kind of information to the practice, so they know when that patient is discharged, that they need follow-up, they need their medications checked and reconciled, that the patient needs a follow-up appointment to prevent a readmission—that's all a part of population health and requires an access to data and technology that the health plan may have."
"The combination of that technology, the customer service, the practice and the policies help to deliver better value to that patient," McCoy said.
Practice Edge will offer scholarships to smaller practices to help with the cost of implementing the needed technology.
The company will also be creating a clinical data repository with blinded patient data that physicians can use to compare their performance to a peer network. The patient data will be used only in aggregate form and won't be shared with any payer.
First of its kind?
Both the TMA and BCBS are calling Practice Edge a first-of-its-kind model—a collaboration that is concentrating on independent physician-led ACOs instead of collaborations between hospitals and payers.
"What makes this so unique is instead of having a focused group of several hundred or a handful of thousand physicians, they've got 48,000," BDO's Bithoney told Healthcare Dive. "It's an exciting possibility that they could actually transform healthcare across the state. You have all these physicians who are practicing, why not give them tools?"
(Bithoney does go on to remark that the sheer size of the groups may lead to a less targeted approach than that which has made other ACOs successful.)
The Texas Medical Association has 48,000 members statewide. BCBS of Texas, as the state's dominant insurer, has over 5 million members. Ultimately, it may be the breadth of the major players in this deal that will make the model a success.
"TMA has tremendous brand ID with Texas physicians and is extremely well-respected," McCoy told Healthcare Dive.
But it's BCBS that is the real cornerstone here. The data it may offer is important, but without the bulk of value-based contracts that the insurance giant will have to offer small physicians to make this a success—competitive contracts usually reserved for institutions with the patient volume and associated bargaining power of hospitals—these new physician-led ACOs will likely never get off the ground.
The value-add for BCBS, it would appear, is in the organizational structure of these new, hypothetical organizations.
ACOs, particularly MSSP organizations (in which Practice Edge will help physicians become involved), have long been criticized for being too one-size-fits-all. In spring of 2014, Universal American announced that it would back away from financing unprofitable Medicare ACOs. At the time, the publicly-traded insurer contracted with local physicians to operate Medicare Shared Savings Program ACOs across 13 states, accounting for nearly 10% of all approved MSSP ACOs. On some of these organizations, they lost money: Despite investing over $60 million through the end of 2013, the company's first-quarter 2014 ACO investment was "a drag" on its earnings, according to Modern Healthcare.
"This is exposing a flaw on the Medicare side of the ACO discussion," Jeff Hoffman, senior partner at Kurt Salmon, told Healthcare Dive at the time. "You can create an ACO and have a group of Medicare recipients in your population, and you can try to manage them, but you have no control over where they get service, and you have no impact on plan design."
The secret to success, Hoffman suggested, was dependent on the healthcare market in which an ACO is launched, not the model itself. According to Hoffman, an ACO in a less-competitive environment might have a better chance of altering behaviors, creating savings, and improving outcomes because that ACO is the only available point of care. They don't have to compete with other providers who are not part of the organization.
"As consumers, when there is no financial impact on our choice, we want everything and we want it when we want it. So how do I have an impact on that as an organization?" asks Hoffman. "If you're an ACO in a one-health-system community, you might have better success because [your population] is coming there anyway. But if you’re in a more competitive environment, you can offer high-cost utilizers more efficient, better-outcome programs, but they don't have to take it. And the cost when they go somewhere outside of your ACO still attributes to you."
McCoy echoed the same sentiment when discussing how potential ACOs born from this program should be structured.
"All healthcare is local," McCoy said. "It comes down to the ability of the physician to offer care for an individual patient. We believe that these local, physician-driven ACOs will be organized within local communities, which will be organized within Texas."
Afterwards, McCoy said, BCBS hopes to see "some connectivity" between these regional ACOs, but to begin with, it will be about organizing local community physicians under a single coordinated care banner.
Challenges, and how to measure success
The success of Practice Edge—and by extension, its ability to ensure the survival of the independent physician in a value-based environment—will be measured internally by physician participation. While the company isn't ready to release its benchmarks yet, it seems likely that that number will be based on the number of lives that each physician brings to the table. (MSSP ACOs have a requirement of 5,000 lives.) TMA's Goodman says the venture has already had "hundreds" of inquiries.
"We think keeping physicians independent is important because we think the doctor-patient relationship is essential to getting good value," BCBS' McCoy said. "Having a robust healthcare economy where people are competing on cost and quality helps the patient."
Beyond recruitment, the biggest challenge the program will face is the same challenge that plagues healthcare operations across the country: Interoperability.
"A lot of the success of Practice Edge will depend on how interoperable their [data sharing platform] is with other computer systems so that data can be transferred from one physician practice to another," Bithoney said, drawing on his own experience running a Medicare Advantage ACO. "There's a huge data challenge, and a challenge in getting these physicians up to speed."
From there, it's up to the organizations and physicians themselves to achieve the end-goal: Improve quality of care and decrease costs. The Obama administration in January announced goals for overhauling the Medicare payment system to reward quality over volume. For the first time, HHS tied specific benchmarks to the overhaul, announcing that it is aiming for 30% of payments for traditional Medicare benefits to be tied to alternative payment models by the end of 2016; and 50% by the end of 2018. Independent physicians who wish to remain under their own banner will have no choice but to find ways to comply with the requirements associated with a value-based healthcare system. Other states will be watching Texas carefully to see if the tools Practice Edge offers will be enough to move the needle in a meaningful way.
"I think the story on value-based healthcare and specifically ACOs hasn't been written yet," McCoy said. "We strongly believe this could be a model for the industry to see how different stakeholders can create a value-based proposition."