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December 28, 2015 Economic Forecast 2016 - Health Care

Katz: Medical liability and defensive medicine key issues

Matt Katz, CEO, Connecticut State Medical Society

Medical liability and defensive medicine

Connecticut is consistently ranked one of the worst places to practice medicine in this country, in large part because of the unfavorable liability climate. Medical liability insurance rates exceed the national average, and our state’s piecemeal approach to liability reform hasn’t been successful in the past. There are real costs associated with a poor liability climate, and those costs aren’t limited to physicians.

In an environment that encourages the practice of “defensive medicine” to avoid potential lawsuits, patients and their employers can end up footing the bill with higher healthcare costs. Patient access to healthcare is also limited, as Connecticut’s higher premium costs deter younger physicians from starting practices here and established physicians consider early retirement as a cost-effective alternative to continuing the practice of medicine.

In 2016, CSMS will continue efforts to work proactively with physicians, legislators and other stakeholders to develop comprehensive medical liability reforms.

A number of states have successfully implemented alternatives to the current adversarial, cumbersome, and ineffective tort system. CSMS seeks to establish a statewide group of potential stakeholders to study these alternatives, such as health courts, and develop recommendations for Connecticut. In the meantime, CSMS will continue to support traditional tort reforms, such as limits on damages, periodic payments, and reduction to pre-judgment interest levels. Physicians, patients and employers would benefit from medical liability reform.

Without the pressure of “defensive medicine,” health care costs can be better controlled, and premium dollars can be redirected to needed patient care. Patient access to care would also improve, as lower rates better position our state to attract new physicians and retain established practices. Finally, health courts and other alternatives are more nimble and responsive than the traditional court system, helping to reduced case backlogs as well as legal expenses.

Market consolidation leads to narrow networks

The year ahead brings with it the potential for significant health insurance consolidation in Connecticut and across the nation.

The proposed merger of health insurance mega giants Anthem and Cigna brings with it considerable concern for Connecticut’s physicians, particularly those in independent practice.

Historically, physicians have had little leverage to negotiate with health insurers. Often faced with “take it or leave it” contracts, those physicians in solo and 2 small practices are frequently forced to take sub-standard payment rates in order to continue seeing patients.

Larger physician groups will face similar pressures. A consolidating health insurance market tends towards an anti-competitive environment which leads to less choice in the insurance market where neither physicians nor patients benefit.

In fact, the trend towards creating smaller and tiered networks serve only to squeeze out the solo and small practice physicians who have little to no contracting power with these giant health insurers. Narrow and tiered networks also present a problem of network adequacy in a state that has little to no statutory or regulatory authority defining what an adequate network is for patient access to care. An inadequate physician network often leaves physicians unable to find specialists to see their patients in an in-network capacity.

In 2014 and 2015, CSMS successfully supported legislation to improve transparency and fairness for physicians and patients. Insurers are now required to maintain real-time websites for consumers regarding insurance payment information. Patients must be notified of out-of-network costs, and insurers are also required to provide physicians with access to a patient’s medical records before treating via telemedicine.

In the year ahead, CSMS will continue its efforts to strengthen state statutes regarding network adequacy requirements, establish limits on the use of tiered and narrow networks, and increase transparency regarding their structure and determination of participating physicians. 

Never-ending demands of EHR/meaningful use/quality reporting

The ever-growing bureaucratic pressures facing physicians today are compromising the ability of Connecticut’s physicians to care for their patients. Physicians are spending more time than ever before on complex and ever changing federal requirements such as Meaningful Use and mandated quality reporting appears to have done little, if anything, to improve the care provided to Connecticut’s patients.

Physicians simply cannot continue to provide quality patient care while at the same time dealing with the never-ending requirements that are often seen as roadblocks to care placed on them by the state and federal government. Yes, health information technology is important and is often helpful.

However, the regulations have become overly proscriptive and inflexible, resulting in physicians spending more time and money on technology and less time and resources on quality patient care. The technology, in part because of the changing regulations, is taking time away from patient care instead of adding to it.

Additionally, the reporting of quality measures, thought at first to be a good thing, has created more of a checkbox mentality among hard working and devoted physicians and other clinicians rather than a meaningful way to evaluate and, most importantly, improve care delivery. Quality is not improving; the focus is misplaced and misguided. CSMS has sent comment letters to Congress and the federal agencies responsible for these programs highlighting that changes need to be made.

CSMS will continue to highlight where these programs have gone astray and have become overly burdensome and process-driven rather than outcome-focused.

The future of the independent physician in Connecticut

The future of the independent practice of medicine in Connecticut should be one of growing concern for patients. Medical liability rates for Connecticut physicians continue to be one of the primary reasons for physicians to give up the independent practice of medicine. Connecticut continues to be a “crisis” state for medical liability rates, according to the American Medical Association.

Faced with continuing pressure from the Connecticut trial lawyers to eviscerate the minimal liability protections Connecticut law affords to physicians, medical liability rates will continue to drive independent physicians to give up their practice. The bureaucratic pressures facing independent physicians similarly provide a challenging practice environment.

The costs associated with electronic medical records, meaningful use requirements, often modified quality reporting measures such as the Physician Quality Reporting System (PQRS), Value Based Payment Modifier (VBPM), and soon-to-be Merit-Based Incentive Payment System (MIPS), are staggering and leave the ability of physicians to practice independently in doubt, while creating questionable quality improvement.

Private practice, independent physicians have traditionally based their practices off of a fee-for-service model. The shift to value based payment models leaves many independent physicians unable to practice under this model and the often-burdensome requirements that come with these models of care delivery.

Additionally, the proposed Anthem-Cigna merger will be a tremendous threat to the independently practicing physician as physicians will have even less leverage to negotiate sustainable contracts with mega-insurers. In order for the independent physician to survive and thrive in Connecticut, significant change is needed. Without this change, the future of the independent physician may be in doubt.

CSMS will continue to support legislative changes that positively impact independent physicians, including vigorous opposition to insurance company consolidation, so that physicians have a choice in where and how they practice medicine in the State of Connecticut for the benefit and betterment of patient care.

[See what others are saying on HBJ's Economic Forecast 2016 page]

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