2017's top physician practice stories include payment reform, politics and changing business models

Doctors posing for the camera
There was no shortage of headlines in 2017 related to doctors and physician practices. (American College of Emergency Physicians)

From a new physician payment system to the seemingly endless political battles in Washington over healthcare to mergers that may drive future changes in how care is delivered, 2017 was a year full of changes for doctors.

As the year came to a close, FierceHealthcare looked back at some of the noteworthy stories that had an impact on physician practices in 2017 and will continue to reverberate into 2018.

Role of hundred dollar bills on other bills
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MACRA and MIPS

Perhaps the single biggest change for physician practices was implementation of a new Medicare payment system under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). It was called the “most complex clinician payment program in Medicare’s history.”

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Unveiled in a 2,400-page rule, the complicated payment system took effect Jan. 1 last year, moving healthcare away from fee-for service toward value-based care. MACRA gave physicians two pathways to participate—the Merit-based Incentive Payment System (MIPS) and advanced alternative payment models.

The good news for doctors is that the government allowed a “pick your pace” option to let doctors ease into the quality reporting required by MIPS, the program that covers the vast majority of practices. As 2017 wound down, however, physician groups, including the American Medical Association and the Medical Group Management Association, were educating doctors about how to submit the minimum data before Dec. 31 in order to avoid a 4% payment penalty down the road.

And even as some doctors struggled to get on board, the Centers for Medicare & Medicaid Services released rules for year two of MACRA. Early criticism focused on the burden it placed on small practices, and CMS reacted by lowering the threshold so fewer physicians must participate in MIPS and by offering more support. However, the agency did not acquiesce to calls for further leniency: In 2018, doctors must submit a full 12 months of quality data.

For now, MACRA is here to stay, but the debate over the value of MIPS has gained steam in recent months. The Medicare Payment Advisory Commission has talked about recommending to Congress that it replace MIPS, which its staff called “burdensome and inequitable.”

Two recent studies have also raised concerns about the future success of MIPS, given failures with its predecessor, Medicare’s Value-Based Payment Modifier Program. A study found that almost 30% of practices took a financial penalty that cut their Medicare revenue rather than participate in the program.

Politics, Trump and healthcare

Healthcare dominated the political headlines in 2017. The 2016 elections brought a new president and a Republican-controlled Congress and immediately energized many doctors who feared the effect on their patients. Advocacy groups promised to fight any policies from Donald Trump that it perceived as hurting patients.

Donald Trump
(Gage Skidmore/CC BY-SA 3.0)

The battle by Republicans to repeal and replace the Affordable Care Act drew many doctors into the political fray. Physician organizations spoke out against Republican-backed plans that would have caused many patients to lose health insurance coverage gained under the ACA.

While efforts to strike down the ACA ultimately failed after three tries, a tax plan passed by Congress as the year wound to a close raised the alarm of healthcare industry groups that its provisions will hurt patients and health insurance plan members. The plan includes a repeal of the ACA’s individual mandate and will lead to millions more uninsured Americans.

A Trump appointment also generated headlines from day one. Trump’s decision to name a physician, Tom Price, M.D., a conservative Georgia congressman, as secretary of the Department of Health and Human Services (HHS) drew protest from some doctors. While viewed as a “best friend” to doctors and practices by some, Price resigned in October following days of controversy related to his use of private planes for travel at a hefty expense to taxpayers.

The year ended as it began, with many doctors calling for action by those in the profession. The role of bystander is no longer a choice, wrote Donald M. Berwick, M.D., president emeritus and senior fellow of the Institute for Healthcare Improvement in Cambridge, Massachusetts, in an opinion piece published in JAMA.

Megamergers and fewer independent practices

The year marked a business tipping point for physician-owned practices, which are no longer the majority, according to a survey by the American Medical Association. Less than half of practicing physicians own their own practice, the AMA said, citing 2016 data collected in a national survey of 3,500 U.S. physicians.

It marks the first year in which physician practice ownership is no longer the majority arrangement, with physicians evenly distributed between owners and employees—47.1% of doctors own their own practice, with the same percentage employed and 5.9% independent contractors. As of mid-2015, one in four medical practices was hospital-owned.

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(daizuoxin/iStock/Getty Images)

It was also a year when mergers threatened to disrupt the healthcare landscape. Two of the biggest healthcare deals—Anthem’s acquisition of Cigna and Aetna’s deal to purchase Humana—were struck down by the court, which some said was good news for both doctors and patients. The mergers would have eliminated competition in the insurance markets, increasing costs for patients and giving physicians less bargaining power, opponents said.

Talks of new megadeals emerged in December with the potential to shake up the physician practice market. Pharmacy giant CVS announced it reached agreement to purchase Aetna, the country’s third largest health insurer, for $69 billion. The merger is a shot across the bow that's aimed directly at primary care practices and other traditional providers, with the potential to further shake things up for providers, which have faced increasing competition from retail clinics.

UnitedHealth’s Optum unit also announced its plans to acquire one of the country’s leading medical groups for $4.9 billion in cash. UnitedHealth announced that DaVita Medical Group will join Optum's physician-led primary, specialty, in-home, urgent- and surgery-care delivery services business as part of a deal expected to close in 2018 pending regulatory approval.

Both show how more insurers are moving away from traditional business models to collaborate with providers in order to improve care, lower costs and engage patients.