Industry Focus: Healthcare

Industry Focus: Healthcare in Nevada
Left to right: Dr. Brian Lawenda, 21st Century Oncology; Dr. Benjamin Rodriguez, Nevada State Board of Medical Examiners; William Moore, Desert Radiologists; Larry Charlton, City National Bank; Doug Geinzer, Southern Nevada Medical Industry Coalition; Dr. Linda Johnson, Southwest Medical Associates; Mike Murphy, Anthem Blue Cross Blue Shield, Dr. Brian Murphy, Nathan Adelson Hospice; Mike Gorman, MedicWest/American Medical Response

The healthcare industry continues to experience unprecedented change. With various requirements of the Affordable Healthcare Act coming online, the next few years will be a game-changer for the industry. Recently, executives representing healthcare in Nevada met at the Las Vegas offices of City National Bank to discuss these changes and the future of healthcare in the Silver State.

Connie Brennan, publisher of Nevada Business Magazine, served as moderator for the event. These monthly meetings are designed to bring leaders together to discuss issues relevant to their industries. Following is a condensed version of the roundtable discussion.

Is the Affordable Healthcare Act a good or bad thing?

Mike Murphy: It’s hard to boil it down, is it a good thing or a bad thing? There are going to be struggles, unanticipated struggles, that I think folks are going to see come out of this. It’s good because it’s opened up a new dialogue that hasn’t happened before, things that I think the industry has been afraid to talk about are certainly more open over the last 18 to 24 months than they ever have been. There still is a whole lot of hesitation and, unfortunately, for something that is going to be in affect 13 months down the road, there’s still a lot of uncertainty. So, if you say is it a good thing or a bad thing, I think it depends on the person, it depends on the readiness. What I would say is, it’s going to change things: the discussions, how we deliver medicine and how we pay for medicine. I don’t know that you can answer it blankly, is it a good thing or a bad thing.

Will sole-practitioners be a thing of the past?

Dr. Ben Rodriguez: The private practitioner is going to be in an overwhelmingly difficult maze to which they are going to have to negotiate. It means increased costs. For your boots on the ground, small business, small practitioner, it’s overwhelmingly daunting. A lot of small businesses and small practices are consolidating or they’re being absorbed by hospitals. Giving up and going into Southwest Medical or some of the bigger organizations. They’ll still be out there, but much fewer. That’s been the trend over the last few years.

Dr. Brian Murphy: We hear everyday that there is another small group or single provider that has joined you all [at Southwest] or HCP (Healthcare Partners), it’s happening.

Dr. Linda Johnson: The reality is, the resources that are needed to be compliant and be able to do what you have to do; it’s almost impossible with the overhead of a small office. In some form or another, they’ll actually join a group or be a part of a hospital or ACO (accountable care organizations) system that has some kind of infrastructure to help deal with all those different requirements; it’s almost impossible as a small group to be able to do that.

Dr. Brian Lawenda: The administrative burden will become enormous for a sole practitioners office. To keep up with the changes that are going to be required will be very expensive, so only larger organizations like Southwest and companies that are national companies like ours are going to be able to pay for these incredible administrative costs to stay up to date with the latest changes and technology.

Has it been challenging to update to electronic medical records?

Johnson: I feel fortunate; I think we’re ahead of the curve because we’ve had in place a very robust electronic medical record (EMR) for almost 15 years now. The pain that everyone else is going through trying to get up and running with EMR’s and meaningful use is already behind us. What we’re going to have to deal with more now, is how we use that electronic network smartly so that we can manage a population, be efficient and have the outcomes that are the ways we will be paid on in the future. It’s not going to be widgets we’re going to be paid on in the future, it’s being paid on the outcomes, which is not necessarily a bad thing. You have to have technology that can support, and you have to have data that shows you’re getting reimbursed correctly and that’s hard if you don’t have the technology or the infrastructure in place. I’m confident that we’re poised well to start tackling it. Is it going to be easy? I don’t think so, but I’m confident that we have a lot of the resources in place to get started.

Rodriguez: For a small business, for one to three practitioners in the office, when you have a $50 to $60 thousand EMR system and another $10 to $15 thousand maintenance on top of that, it’s prohibitive.

Doug Geinzer: Once the EMR systems are all tied into this grandiose system, we will see tremendous benefit; just because of the portability of the data and the need to be able to deliver medicine. It will be that much easier.

Lawenda: We have a national EMR for 21st Century Oncology, so we’re able to collect data from all over the country and collect information on treatments and outcomes and we’re able to give that to the insurance companies.

What can business owners expect in regards to medical insurance?

Mike Murphy: The small employer will see significant changes in the way that healthcare premiums are rated. We issued an analysis 18 or 19 months ago that anticipated some of the changes. The reality is, no longer will anyone be rated on any sort of health conditions, so as you bring everyone to the middle, if you will. Think about compression. What happens in compression is, the top comes down, and the bottom comes up. Folks can expect, for the most part, 90 percent are going to see a change as an outcome of the Affordable Care Act. Some will see advantages and some will see disadvantages, but there will be a fairly significant change. Nevada is one of the states that have one of the higher differentials in risk analysis, which means they’ll have a higher impact of what happens with the Affordable Care Act coming forward. I think businesses can expect to see changes. To navigate through the changes, there are added benefits that come in. There are additional costs through the exchange and fees that are placed on insurers that pay for the Affordable Care Act. We will see a lift, as Dr. Johnson described, you have a new system, and a new payment mechanism, there are going to be added costs that are going to be on the system.

Brian Murphy: It might be time for an interesting experimentation for businesses. Making decisions of, do you pay the fee instead of offering health insurance for a change, or do you do what so many businesses are doing now, and want more from your employees. Saying, “We’ll pay for your insurance, if you do x, y, and z.” I think that’s going to expand over time as well. If you’re healthier, if you’re not doing bad behaviors, you’re going to pay less. I think there will be more bargaining with employees.

How has technology changed healthcare?

Mike Murphy: I think technology has changed a lot. Employers are getting much more willing to ask more of their employees in health. Technology has enabled a lot of that. As you start to employ technology around transferring daily or weekly weight records. With Caremore, we have scales that transfer patient’s weights, if we notice excessive weight gains, we reach out to the patients to make sure we aren’t treating it in the emergency room; that we’re able to tackle it before it gets out of hand. Examples like that and blood glucose monitoring that are able to be done through an iPhone or an iPad are neat and fun when they first come out. But, once you put it into practice, it has the ability to change the way that we can help to improve health. Technology from that standpoint has come a long way. Behind the scenes, from an operational standpoint, electronic medical records and reducing adverse outcomes because of mistakes, all across the board, technology has the opportunity to advance.

Mike Gorman: From the pre-hospital environment, being able to monitor patients before they call 911 is something we’ve never had the ability to do until recently. We have electronic patient care recording, where we know real time what’s going on with the patient. Before, it was a mystery when the patient got into the emergency room what exactly was wrong with them. Now we can talk from the scene and transmit. There’s amazing advancements to the care we provide now.

William Moore: We were early adapters of the PACS (picture archiving and communication system) technology, which is the picture archive where all the images are stored. We moved to digital radiology in the 90s, long before any other radiology practice did that. In addition to adding the PACS technology, we transitioned to McKesson, [an EMR system,] which provided a very stable and solid PACS platform. Voice recognition has come a long way from where it was even a few years ago. We recently adopted voice recognition which has helped eliminate the expense of transcription costs for hospital partners and other practices that we did studies for. With voice recognition technology, instead of viewing an image, completing a report and then transcribing a report, which used to take hours, in today’s world, everything is a final report. For the ER reports, we’re turning those around to UMC’s Trauma Center in minutes, usually 6-12 minutes from the time we receive the image.

How has the economy affected healthcare?

Johnson: The economy has caused, not so much a decrease in patients, but a difference in the mix. Being a managed care organization on capitation, with the deep dive of the economy, we lost 40,000 capitated lives, but at the same time we saw an increase in Medicaid. As those patients became unemployed and off of their employee benefits, they went onto Medicaid. Our overall volume of patients didn’t change, but the mix changed. In our heyday, as being as pure managed care as we could be, 95 percent of our patients were on some kind of managed care product, we’re up to 20 percent fee for service now. There’s been a shift on what patients have available to them and how they’re able to pay.

Mike Murphy: You’ve seen the uninsured rate go up, and you’ve seen the decline and shrinkage in the size of business closing the doors. We’ve seen a decline over the past couple years but we’re starting to see that stabilize. We’re not seeing as much decline in the size of businesses, but we hope that at some point that start’s to turn around. As we’ve seen across the country, it affects people’s behavior and how they seek care and how they pay for care. It’s not so much after they lose their job, it’s the fear of the unknown of what’s coming down the road. It affects everybody whether their in a different financial state or not.

Gorman: For pre-hospital care, we’re affected in a couple different ways. When people lose their jobs and their under-insured or uninsured, they’re not going to see their doctor anymore and their health will degrade to the point where someone does call 911. Or, people are using the 911 system instead of going to see their primary care physician. We’re at the point now where an ambulance will run on every patient regardless of their ability to pay. Right now, 30 percent of our calls are persons who want to go to the hospital. They just want someone to check on them. Of that, 70 percent do go to the hospital, 34 percent are uninsured; it’s a difficult mix. We’re not sure how [the Affordable Healthcare Act] will affect our business, we’ve been trying to dive through it and we don’t know if that 34 percent that are uninsured are now going to make a larger percentage of those on Medicaid or not. We’re hoping for the best.

What staffing challenges is healthcare facing?

Johnson: We’ve partnered with another company, Insperus, a nurse practitioner based company that we’re using for our chronically ill based patients that aren’t able to get into the hospital. They’ve had a very difficult time getting nurse practitioners. They’re based in 38 states around the country, but in Arizona, nurse practitioners are able to practice without having precepting physicians, so they’re able to practice more independently, whereas you come to Nevada where they have to be with a precepting physician and those precepting physicians can only have three nurse practitioners. It makes it difficult for their model to be able to get up and staffed. The restriction on how that’s set up in Nevada definitely has an impact. There’s legislature being discussed to address that during the next session. It will impact wellness programs and potential employer benefit programs. We just don’t have the right climate to be able to bring in the mid-levels to be able to deal with the volume of patients that are going to come up if we are on the exchange of the Medicaid expansion.

Brian Murphy: We will have to look at legislative changes. As we begin to do more with palliative care, we ran into that issue with the nurse practitioners as well. I think it’ll be fascinating to see where we go as a state.

Geinzer: The nursing shortage has stabilized a little bit, but it’s a false indicator. The economy has changed so much that the nurse that was once working one full-time job, is now working two. The nurse that was hoping to retire is now hanging on because their significant other is no longer working and the nurse that was working part-time is now working full-time. They’re staying in their workplace longer. It’s creating a bubble. When the economy improves, the bubble is going to burst quite a bit. Now we have this larger uninsured population that will also be entering the stream and the mix. We have some challenges ahead. Fortunately, Southern Nevada Medical Industry Coalition designed the Healthcare 2020 program, a transition to practice program. We’re taking new graduate nurses and giving them the clinical skills to enter the workplace. Four years ago, the new graduate nurses were not finding work in Nevada. We had the second to worst nurse to population ratio in the country, yet we were becoming an exporter of nurses. Now, we’re keeping our nurses in town and we’re building a natural pipeline to take our educational infrastructure to make sure we’re growing our own.

Gorman: We have a good problem where we’re constantly hiring. The 911 volume continues to grow, we need more people. We have our own accredited school, we’re trying to facilitate bringing people in and working them through the EMT level all the way up to paramedic, but it’s still a challenge.

Johnson: Where we’re having the biggest challenge is hospital medicine. With primary care, we’re doing okay. One of our challenges is California. That’s a state that is dramatically increasing the reimbursement and the compensation for primary care physicians. If we don’t match that, we’ll lose primary care physicians in this state over to California. We used to do market adjustments for our doctor’s every two to three years, now we’re having to do them annually, just to keep up with the offers they’re getting from other places. Recruitment is an issue, but retention is just as, if not more, important. We don’t want to lose the ones we have.