Interview: The State of Reimbursement in Healthcare
Dr. Christopher Rumpf serves as the Chief Clinical Officer for SE Healthcare. During his extensive career in healthcare, Dr. Rumpf has held numerous leadership roles including Chief Medical Officer of a multi-hospital system responsible for safety and quality; as Chief Medical Officer for a Blues plan, responsible for provider contracting; and President of a large, multi-specialty physician group. In the following interview, Dr. Rumpf discusses the state of reimbursements in the healthcare industry.
SE Healthcare: As healthcare continues to evolve, reimbursement method changes follow suit. These methods have included salary, capitation, pay-for-performance, diagnosis-based payment, and fee-for-service. How have these different methods led to the value-based payment system?
Dr. Chris Rumpf: The current fee-for-service model influences over 90% of reimbursement dollars. Physicians are compensated for the services that they provide so the current system encourages the provision of services. This model fosters a problem because too many services of low value are being provided.
Over time, numerous trials of value-based reimbursement models have been attempted in order to reduce the number of low-value services provided. The most successful were the staff and group model HMOs (health maintenance organizations) in the 1980s and 1990s. However, these models did not spread for a variety of reasons.
The government is again attempting value-based reimbursement through ACO (accountable care organizations). This model pushes the financial risk to providers. Physicians are willing to take on clinical risks in their practices because they are trained as clinicians. They are not willing or equipped to handle the financial risk or to acquire protection like stop loss insurance. Due to a lack of adequate financial and actuarial protections, the providers are resisting.
Physicians are willing to take on clinical risks in their practices because they are trained as clinicians. They are not willing or equipped to handle the financial risk or to acquire protection like stop loss insurance. Due to a lack of adequate financial and actuarial protections, the providers are resisting.
SE Healthcare: Does the complexity of earning reimbursements and staying up-to-date with changes in the industry affect the quality of care that patients receive? Is this contributing to physician burnout?
Dr. Chris Rumpf: Yes. In addition to the rapidly changing science and technology of medicine, the difficulty of keeping up with the evolving market places stress on physicians. This is contributing to physician burnout because of their increased frustration levels and decreased job satisfaction. By joining an ACO, physicians are able to band together and find resources to help them handle these issues.
SE Healthcare: Can you briefly explain MACRA and how it affects reimbursements for physicians treating Medicare beneficiaries?
Dr. Chris Rumpf: MACRA replaces the unsustainable annual growth provisions in Medicare and replaces it with a new system of value-based reimbursement factoring in quality, cost, and technology. Due to the significant cost of reporting requirements, most physicians have been exempted from the MACRA requirements which slows progress towards value-based reimbursement.
SE Healthcare: How do you predict legislation like MACRA will affect healthcare over the next few years as it is implemented? What can physicians do to anticipate these coming changes?
Dr. Chris Rumpf: MACRA is evolving. It will take time to implement in a way that moves reporting forward while at the same time not creating such a large burden for providers that they drop out of Medicare. As baby boomers and the provider workforce age in, Medicare cannot afford a decline in access to services.
SE Healthcare: Can you please explain the pressure that physicians face from their payers? Will the physician-payer relationship affect how physicians provide patient care in the future?
Dr. Chris Rumpf: Providers face pressure from payers to keep the costs of health insurance affordable by keeping prices and service utilization under control. This will require providers to reduce low-value services. Physicians are not currently incentivized to do this and patients want more low-value services.