Radiologists, especially, are in a vulnerable state given the looming 11% cuts to Medicare reimbursement that will further ravage the already shattered radiology industry.
Both President Donald Trump and former Vice President Joe Biden have shared their vision and proposals for healthcare. But what are the implications of the election for practices and radiologists across the country?
To understand how each candidate can impact radiology, we need to understand how and what is affecting radiology now. There are four major forces:
- Volume of imaging studies continues to be between 25% and 35% lower as compared with pre-pandemic times. This has not only created revenue shortfalls for practices but also has forced practices to make business-driven decisions as to furloughs, salary reductions, and possible layoffs of physicians -- issues never considered by practices before.
- The COVID-19 pandemic has also dramatically shifted the payor mix for radiology practices. This shift has had significant impact, as patient self-pay has started to comprise a much larger percentage of the payor makeup at the cost of commercial carriers. The economic ramifications are significant, as commercial payors tend to be the "highest" payors when looking at reimbursement per procedure versus patient self-pay, which is known for higher rates of bad debt and lower reimbursement.
- The patient mix has also been changed significantly, with patients delaying care and postponing elective procedures. Outpatient volumes continue to be significantly lower, whereas patients seen in the emergency room (ER) continue to represent a much higher proportion of total patients. The economic impact of this is significant, as outpatient studies tend to realize higher reimbursements, whereas the ER is where the lowest reimbursement is realized due to the high level of bad debt.
- The case mix has also changed significantly, and the imaging studies that are being performed tend to be more complicated than historically seen. This results in lengthier interpretation times and relatively lower throughput of radiology cases.
In short, radiology has been reeling during the pandemic, with an increase in operating costs while revenues continue to be adversely impacted. As if this is not enough, there is a looming 11% cut scheduled to take effect on January 1, 2021. In addition, commercial carriers continue to steer studies out of the hospitals and to outpatient imaging centers, which will further impact hospital-based practices.
Do either Biden Care or Trump's America First Healthcare plan offer a solution or a silver lining for radiologists? Unfortunately, it does not seem so. Both Biden and Trump want to reduce the cost of care and want to introduce price transparency. Both are pushing a more consumer-based health care solution. But both candidates have different ways of doing so.
The proposed Bidencare plan would build on the Affordable Care Act. Initially, the act successfully provided insurance to 20 million people who previously lacked it. From an economic perspective, this was a win for providers, as providers started getting reimbursed for services rendered, which would otherwise have seen high bad debt rates associated with uninsured patients.
However, profit-seeking commercial carriers quickly saw an opening and elected to replace their higher-paying commercial products with higher-deductible insurance appeals. This offset the higher reimbursements physicians were seeing from commercial carriers.
Bidencare will continue the public option and ensure more that people have insurance coverage. However, it will be at lower reimbursement rates. Commercial carriers will likely capitalize further and replace their commercial plans with lower-paying, higher-deductible plans.
The impact of Bidencare will result in certainly more people having coverage, but reimbursement will be at a lower rate. This will put radiology practices at a crossroads as to whether to invest in newer equipment and technologies, recruit subspecialists, or try to extend the end of life equipment further. This is one of the fundamental reasons radiology as a specialty is faced with the highest burnout rates.
The second part of Bidencare is providing more price transparency to patients. Both candidates are pushing to empower patients to make decisions based on which provider offers the lowest costs. This will again empower commercial carriers to reduce their reimbursement to providers, and it will further encourage steering.
Carriers will still charge the same premiums and costs to patients; however, they will reduce their payments to physicians and enjoy the additional profit, which is precisely why they have been reporting such high quarterly earnings in recent times.
Bidencare looks to lower the "opt-in" age for Medicare to 60, which will further expand coverage to the American population, but at relatively lower reimbursement to providers who will continue to face increasing cost for operating their practices.
America First Healthcare
Meanwhile, Trump has openly called the Affordable Care Act (ACA) a "disaster" and urges the Supreme Court to overturn the law. The court will soon hear the latest arguments on the ACA in court on November 10. If it does overturn the ACA, tens of millions of Americans will become uninsured, and likely unable to afford their own medical care.
Under Trump so far, insurance premiums have been going down, and more plans are available since he took office. He has promoted short-term and association health plans, which also have lower premiums but do not necessarily cover the ACA's 10 essential health benefits. The key, however, is the increase in high-deductible plans, which shift the onus to the patient.
Studies have repeatedly shown that due to the high-deductible plans, patient deductibles are seldom met. On the contrary, patients are opting to not use their insurance and instead receive "cash-pay," which is most often much lower than what they would have to pay for their insurance contracted rates. This results in patient deductibles only being met in catastrophic cases.
The business effect
Dhruv Chopra, CEO of Collaborative Imaging.
No matter who is elected on November 3, radiologists and radiology practices have to understand that they need to start operating their practices as businesses. They are going to have to make the difficult decisions, determine what investments to make, and choose how they want to continue their practice. They will likely have to do more with less. Turnaround times are likely to be negatively impacted, subspecialty reads will be fewer, and burnout will be at even higher rates.
Doctors will also have to compromise on using the latest and most advanced technologies versus the viability of making those investments and figuring out how to compete in healthcare, becoming consumer-driven businesses as opposed to focusing on the practice of medicine.
Over 50% of radiology practices are already planning to terminate or furlough their existing employees if Congress continues with the 11% cuts looming in January. The Radiology Business Management Association surveyed 155 imaging practices and found that 66% said they'll restructure physician salaries and bonuses, and 70% would reduce operating overhead (benefits, staffing levels, and outsourced services), and a whopping 34% would close or reduce hours at their imaging centers.
No matter the candidate, the next few months are critical for healthcare, as experts predict that January will bring triple the number of daily cases of COVID-19 in the U.S., and a resurgence has begun all over the world, sending some countries back into lockdown.
Dhruv Chopra is the CEO of Collaborative Imaging, a radiologist-owned alliance. He previously spent 15 years as an executive with multiple billing companies in the radiology industry, where he gained an appreciation for how much physician money is lost due to several inefficiencies.
The comments and observations expressed are those of the author and do not necessarily reflect the opinions of AuntMinnie.com.
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