Gastroenterologists are facing increasing financial strain as reimbursement rates continue to decline. A study published in The American Journal of Gastroenterology found that between 2007 and 2022, unadjusted average reimbursement for GI procedures dropped by 7%, while inflation-adjusted rates plummeted by 33%.
The situation may soon worsen. A recently passed funding bill in the House of Representatives (217-213), according to CNN, paves the way for a 2.8% Medicare physician pay cut to take effect.
Surinder Devgun, MD, managing partner of Rochester (N.Y.) Gastroenterology Associates, joined Becker’s to discuss the financial pressures facing gastroenterologists and the impact of declining reimbursement rates on the specialty.
Question: As reimbursement rates fail to keep pace with rising practice costs, how can physician practices sustain themselves long term?
Dr. Surinder Devgun: Looking forward there are only a few outcomes for this scenario. As costs increase and income remains static, there is an inflection point where providers in small practices either take a pay cut as a sacrifice for independence, exit the workforce (such as early retirement or alternate non clinical employment) or join a larger entity. Therefore, joining a larger entity is the most likely outcome in order to remain in clinical practice. The options may be in the form of joining your local health system, banding together with like minded providers or private equity models. Basically, the bigger you become as a private practitioner the more stable your practice becomes and the more say you will have in your day to day practice. These benefits of independence may not translate to employment unless some guarantees can be secured at the time of initial contracting. As physicians, we are blinded to join our colleagues in private practice using small differences in practice patterns as petty excuses but the consequences are dire and eclipse these small differences. All physicians regardless of their site of practice want the same result, to get paid a fair wage for work completed.
Q: In what ways have declining reimbursement rates influenced financial stability and patient care in your practice?
SD: As a practice, we have a principle not to deny care, even though many safety-net programs reimburse amounts to cover only overhead. It is not fair to the patients and realistically costs more money to actively deny care than just to provide it at a loss. Seeking alternative revenue streams has been key, including hiring [advanced practitioners], amongst other ideas that are usually practice specific, such as infusions, vaccinations, independent labs. One must continue to provide high-quality care, which is the easy part for most physicians, but then demonstrate value in your activities to leverage higher reimbursements or value based contracting, which is the challenging aspect of medicine and is best served in the context of a large practice.
