Evolve or Perish

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Cat VaskoI’m checking in with you from ACHE 2011 in Chicago, where after just ten hours of a-conferencing the message is very clear: change is coming to hospitals, and it’s coming to the medical groups that contract with those hospitals too. I don’t want to say the attitude toward physician groups—especially specialty physician groups—is bad, but it ain’t great, either.

This morning I sat in on an interesting talk given by Nate Kaufman of Kaufman Strategic Advisors in San Diego. He didn’t have a lot of nice things to say about most physicians, although he didn’t let executives, his captive audience, off the hook either. Asking why America’s health care costs are so high for such a low quality of care, he pinned the blame not on greedy payors or defensive medicine, but directly on our highly paid health care stakeholders.

And he’s not alone—he presented plenty of evidence that Washington is gunning for the higher salaries in health care in an attempt to cut costs. As the vice chairman of MedPAC, Robert Berenson, MD, said in 2010, “I’m not at all sympathetic with the cardiologists . . . Studies show they make well over $400,000 a year,” which, as Kaufman pointed out, is twice what a family physician earns. (Did you read “radiologist” where it said “cardiologist” there? Because I did.)

If things don’t change, especially in the hospital environment, payors are likely to climb on the bandwagon as well. It’s already happening in Massachusetts, that poor old cautionary tale of a state, where one payor is implementing big co-pays for hospital-based imaging as a means of de-incentivizing patients from choosing the higher-cost service.

I don’t think there’s a lot of happy financial news here for the traditional radiology group. It’s obvious imaging is going to have to evolve with the evolving times, and that’s inevitably going to mean less money; as Kaufman pointed out, if your group won’t voluntarily do a better job for less money, another one will. “If physicians don’t like change, they’re going to hate being considered obsolete,” he said.

Then again, an evolution in hospital-physician relationships, done right, could also mean better patient care at a lower cost. And that’s no small consolation for anyone who meant it when they swore to first do no harm.