Independent practice, bundled payments & Medicare reimbursement — Key thoughts on GI centers in 2016 from Physicians Endoscopy CEO Barry Tanner

The landscape for gastroenterologists is constantly changing as the healthcare environment evolves. But there is still substantial benefit for GI physicians outside hospital employment in the future.

"GI physicians are going to have to consolidate if they desire to remain independent," says Barry Tanner, CEO of Physicians Endoscopy. "The sustainability of smaller independent GI practices is, in my opinion, being threatened. I encourage and support the banding together of GI practices on a regional basis in an effort to reduce overhead, increase access to vital business leadership resources and to increase access to information technology that will enable the collection and monitoring of quality data and metrics that will ultimately drive the sustainability of independent practice."

Maintaining an independent practice requires recruitment, as many current GI practices rely on physicians close to retirement. Other challenges facing GI practices include:

1. Declining reimbursement
2. Data reporting
3. Increased cost for staff and health insurance
4. Health information technology purchase
5. Medicare lowering colonoscopy reimbursement

"[Medicare's lowered rates] are another sad blow to gastroenterologists everywhere," says Mr. Tanner. "The worst possible potential outcome from this is that many gastroenterologists may have to limit the number of Medicare patients that their practice can see and still remain economically viable. The more time GI physicians spend 'working for free,' the greater the risk of actually remaining in independent practice."

Endoscopy centers are vital to providing high quality, low cost GI care. Independent physicians have few other options than to reassess their practice and time management in a "thoughtful and yet compassionate way," says Mr. Tanner, to keep the practice running. But consolidation is rampant in healthcare and as the ranks of independent physicians decline it will be a challenge for physicians to work with payers and hospitals to deliver care in the right setting. One of the solutions is bundling episodes of care.

"Although the bundling of episodic care seems inevitable, I also see it as a slippery slope simply because it has the inherent risk of altering a care plan to fit a pricing model as opposed to designing the right care plan for a particular patient's needs," says Mr. Tanner. "The underlying purpose of bundled payments is to drive waste out of healthcare by encouraging providers to select the best care plan at the best cost."

Colonoscopies could fit in the bundled system because they show benefit — the death rate from colorectal cancer has diminished over the past few years as testing accelerated — and the cost components are easily definable. Each component's cost is predictable.

However, the expenses associated with colonoscopy are low, so payers aren't driven to develop colonoscopy bundles. "I believe that bundling for colonoscopies will gain prominence but it seems that the focus for the time being is likely to remain on higher acuity, more expensive care," says Mr. Tanner.

Despite reimbursement changes and payment issues, Mr. Tanner still sees colonoscopy education and promotion as the biggest opportunity for GI/endoscopy center in the future. The Physicians Endoscopy centers currently promote the benefits of colonoscopy screening, performed by board-certified GI physicians in the patient-friendly, accessible, low-cost, high quality endoscopy center setting. And that setting will differentiate centers from the hospital.

"While there is always opportunity to improve quality, much of the improvement isn't clinical in nature but anchored more in improving the patient experience," says Mr. Tanner. "Third-party payers are increasingly designing health plans to encourage patients to access GI care in the freestanding ASC by structuring patient co-pays and deductibles in such a way that patients are incentivized to seek out ambulatory care outside of the hospital outpatient setting."

Many GI physicians and centers are operating at or near capacity because the patient population for colonoscopy is expanding, and physicians are focused on continuing to provide quality care that will drive future volume. There could be outside initiatives directing patients toward high quality centers in the future as well.

"As health plans continue to educate and steer customers, quality and pricing transparency will continue to play an increasingly important role in the growth and success of GI/endoscopy centers," says Mr. Tanner. "Endoscopy centers are and will continue to be a key part of the solution to providing high quality GI care in a lower cost setting. As a result, the future for GI-focused ASCs looks very bright to me."

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