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Primary Care Doctors Look at Payment Overhaul After Pandemic Disruption

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For Dr. Gabe Charbonneau, a primary care doctor in Stevensville, Montana, the coronavirus pandemic is an existential threat.

Charbonneau, 43, his two partners and 10 staff members are struggling to keep their rural practice alive. Patient volume is slowly returning to pre-COVID levels. But the large Seattle-area company that owns his practice is reassessing its operations as it adjusts to the new reality in health care.

Charbonneau has been given until September to demonstrate that his practice, Lifespan Family Medicine, is financially viable — or face possible sale or closure.

“We think we’re going to be OK,” said Charbonneau. “But it’s stressful and pushes us to cut costs and bring in more revenue. If the virus surges in the fall … well, that will significantly add to the challenge.”

Like other businesses around the country, many doctors were forced to close their offices — or at least see only emergency cases — when the pandemic struck. That led to sharp revenue losses, layoffs and pay cuts.

Dr. Kevin Anderson’s primary care practice in Cadillac, Michigan, is also scrambling. The practice — like others — shifted in March to seeing many patients via telemedicine but still saw a dramatic drop in patients and revenue. Anderson, 49, and his five partners are back to about 80% of the volume of patients they had before the pandemic. But to enhance their chances of survival, they plan to overhaul the way the practice gets paid by Medicare.

Jodi Faustlin, CEO of the for-profit Center for Primary Care in Evans, Georgia, manages 37 doctors at eight family medicine practices in the state. She’s confident all eight will emerge from the pandemic intact. But that is more likely, she said, if the company shifts from getting paid piecemeal for every service to a per-patient, per-month reimbursement.

One of those 37 doctors is Jacqueline Fincher, the president of the American College of Physicians. Fincher said the pandemic “has laid bare the flaws in primary care” and the “misguided allocation of money and resources” in the U.S. health care system.

“It’s nuts how we get paid,” said Fincher, whose practice is in Thomson, Georgia. “It doesn’t serve patients well, and it doesn’t work for doctors either — ever, let alone in a pandemic.”

Physicians and health policy experts say the pandemic is accelerating efforts to restructure primary care — which accounts for about half the nation’s doctor visits every year — and put it on a firmer financial footing.

The efforts also aim to address long-festering problems: a predicted widespread shortage of primary care doctors in the next decade, a rising level of physician burnout and a long-recognized underinvestment in primary care overall.

No data yet exist on how many of the nation’s primary care doctors have closed up shop permanently, hastened retirement or planned other moves following the COVID-19 outbreak. An analysis by the American Academy of Family Physicians in late April forecast furloughs, layoffs and reduced hours that translated to 58,000 fewer primary care doctors, and as many as 725,000 fewer nurses and other staff in their offices, by July if the pandemic’s impact continued. In 2018, the U.S. had about 223,000 primary care doctors.

“We think we’re going to be OK,” says Dr. Gabe Charbonneau, a primary care doctor in Stevensville, Montana. “But it’s stressful and pushes us to cut costs and bring in more revenue. If the virus surges in the fall … well, that will significantly add to the challenge.”(Tommy Martino for KHN)

“The majority [of primary care doctors] are hanging in there, so we haven’t yet seen the scope of closures we forecast,” said Jack Westfall, a researcher at the academy. “But the situation is still precarious, with many doctors struggling to make ends meet. We’re also hearing more anecdotal stories about older doctors retiring and others looking to sell their practices.”

Three-quarters of the more than 500 doctors contacted in an online survey by McKinsey & Co. said they expected their practices would not make a profit in 2020.

A study in the journal Health Affairs, published in June, put a hard number on that. It estimated that primary care practices would lose an average of $68,000, or 13%, in gross revenues per full-time physician in 2020. That works out to a loss of about $15 billion nationwide.

One main problem, said Westfall, is that payment for telehealth and virtual visits is still inadequate, and telehealth is not available to everyone.

Re-Engineering Primary Care Payments

The remedy being most widely promoted is to change the way doctors are reimbursed — away from the predominant system today, under which doctors are paid a fee for every service they provide (commonly called “fee-for-service”).

Health economists and patient advocates have long advocated such a transition — primarily to eliminate or at least greatly reduce the incentive to provide excessive and unneeded care and promote better management of people with chronic conditions. Stabilizing doctors’ incomes was previously a secondary goal.

Achieving this transition has been slow for many reasons, not the least of which is that some early experiments ended up paying doctors too little to sustain their businesses or improve patient care.

Instead, over the past decade doctors have sought safety in larger groups or ownership of their practices by large hospitals and health systems or other entities, including private equity firms.

A 2018 survey of 8,700 doctors by the Physicians Foundation, a nonprofit advocacy and research group, found, for example, that only 31% of doctors owned or co-owned their practice, down from 48.5% in 2012.

Fincher, the American College of Physicians president, predicts the pandemic will propel more primary care doctors to consolidate and be managed collectively. “More and more know they can’t make it on their own,” she said.

A 2018 survey by the American Medical Association found that, on average, 70% of doctor’s office revenue that year came from fee-for-service, with the rest from per-member, per-month payments and other methods.

The pandemic has renewed the push to get rid of fee-for-service — in large part because it has underscored that doctors don’t get paid at all when they can’t see patients and bill piecemeal for care.

“Primary care doctors now know how vulnerable they are, in ways they didn’t before,” said Rebecca Etz, a researcher at the Larry A. Green Center, a Richmond, Virginia, advocacy group for primary care doctors.

Charbonneau, in Montana, said he’s “absolutely ready” to leave fee-for-service behind.

However, he’s not sure the company that owns his practice, Providence Health System — which operates 1,100 clinics and doctors’ practices in the West — is committed to moving in that direction.

Anderson, in Michigan, is embracing a new payment model being launched next year under Medicare called Primary Care First. He’ll get a fixed monthly payment for each of his Medicare patients and be rewarded with extra revenue if he meets health goals for them and penalized if he doesn’t.

Medicare to Launch New Payment System

The Trump administration — following in the footsteps of the Obama administration — has been pushing for physician payment reform.

Medicare’s Primary Care First program is a main vehicle in that effort. It will launch in 26 areas in January. Doctors will get a fixed per-patient monthly fee along with flat fees for each patient visit. A performance-based adjustment will allow for bonuses up to 50% when doctors hit certain quality markers, such as blood pressure and blood sugar control and colorectal cancer screening, in a majority of patients.

But doctors also face penalties up to 10% if they don’t meet those and other standards.

Some private insurers are also leveraging the pandemic to enhance payment reform. Blue Cross and Blue Shield of North Carolina, for example, is offering financial incentives starting in September to primary care practices that commit to a shift away from fee-for-service. Independent Health, an insurer in New York state, is giving primary care practices per-patient fixed payments during the pandemic to bolster cash flow.

Meanwhile, two of the nation’s largest primary care practice companies continue to pull back from fee-for-service: Central Ohio Primary Care, with 75 practices serving 450,000 patients, and Oak Street Health, which owns 50 primary care practices in eight states.

“Primary care docs would have been better off during the pandemic if they had been getting fixed payments per month,” said Dr. T. Larry Blosser, the medical director for outpatient services for the Central Ohio firm.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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By: Steven Findlay
Title: Primary Care Doctors Look at Payment Overhaul After Pandemic Disruption
Sourced From: khn.org/news/primary-care-doctors-look-at-payment-overhaul-after-pandemic-disruption/
Published Date: Wed, 12 Aug 2020 09:00:29 +0000

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Ends-of-the-World Every Year Since 1970

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There always has been and always will be a reason not to invest or not to stay invested. This is all the mainstream media reports to us. Below you will find a list of some of the worst global events each year since 1970. I have some commentary to follow.

1970: War: US troops invade Cambodia.
1971: Civil Unrest: Anti-war militants march on Washington.
1972: Political: Start of Watergate Scandal.
1973: Economic: OPEC raises oil prices in response to US involvement abroad.
1974: Political: Nixon resigns as President of the United States.
1975: Political: Multiple assassination attempts on President Ford.
1976: World: Ebola virus.
1977: Political: Government shutdowns.
1978: Market: U.S. Dollar plunges to record low against many European currencies.
1979: World: Iranian militants seize the U.S. embassy in Teheran and hold hostages.
1980: Economic: Inflation spiked to a high of 14.76%.
1981: Political: President Reagan assassination attempt.
1982: Economic: Recession continues in the U.S. with nationwide unemployment of 10.8%.
1983: Economic: Unemployment in the U.S. reaches 12 million.
1984: Economic: 70 U.S. banks fail during the year.
1985: World: Multiple airplane hijackings around the world.
1986: World: Chernobyl Nuclear Power Station explodes.
1987: Market: DOW drops by 22.6% on October 22.
1988: Environment: Awareness of global warming and the greenhouse effect grows.
1989: Environment: Exxon Valdez dumps 11 million gallons of crude oil into Prince William Sound.
1990: World: Persian Gulf War starts.
1991: World: Mass shooting in Killeen, TX.
1992: Human Rights: Los Angeles riots following the death of Rodney King.
1993: Terrorism: World Trade Center bombing.
1994: World: Mass genocide in Rwanda.
1995: Terrorism: Oklahoma City bombing.
1996: Terrorism: Olympic Park bombing.
1997: World: Bird flu.
1998: World: Multiple U.S. embassy bombings.
1999: World: Columbine shooting.
2000: Economic: Start of the Dotcom Market Crash.
2001: Terrorism: Terrorist Attacks in NYC, DC & PA.
2002: Economic: Nasdaq bottomed after a 76.81% drop.
2003: World: The U.S. invades Iraq.
2004: World: The U.S. launches an attack on Falluja.
2005: World: Hurricane Katrina
2006: World: Bird flu.
2007: Economic: Start of the Great Recession.
2008: Economic: Great Recession continues.
2009: Economic: S&P bottomed after a 56.8% drop.
2010: Market: Flash crash.
2011: Market: Occupy Wall Street and S&P downgrades U.S. Debt.
2012: Political: Fiscal cliff.
2013: Political: Taper tantrum.
2014: World: Ebola virus.
2015: World: Multiple mass shootings.
2016: Political: Divided U.S. Presidential election.
2017: World: North Korea testing nuclear weapons.
2018: Economic: U.S. & China trade war.
2019: Economic: Student loan debt reaches an all-time high of $1.4 trillion.
2020: World: COVID-19.

While many of these events were undoubtedly terrible (and there are certainly others not named here that were worse), most of these were broadcast as end-of-the-world events for the stock market. Despite that attention, it is worth noting that these were, for the most part, one-time events. In other words, most faded into the newspapers of history. We moved on.

Obviously, some caused monumental shifts in the way the world works. Just think about how much air travel continues to be impacted by the events of 9/11. But, outside of the resulting inconveniences (if we want to call safety protocols inconveniences) associated with air travel, flying is safer than ever before.

Take a look at just about any of the events and you will find there are many that people will hardly remember. My point here isn’t that these events are to be ignored or that they were easy to stomach at the time, but that they have become a distant memory.

I want to also make the point that we should expect these types of negative events. As investors, we know these types of crises, economic catastrophes, and global phenomena are going to happen.

But in almost all cases, here is what we can say in the next breath – this too shall pass.

Will there be legal, humanitarian, economic, or some other aid required as a result of these events? Almost certainly the answer is yes, but that doesn’t mean it they won’t eventually fade into history.

Lastly, what’s worth noting is how the market has performed over these last 50 years despite the continual advertisements of the world crashing down around us. On January 2, 1970, the Dow Jones stood at 809 and the S&P at 90 -> those are not typos. These same indexes have grown (not including dividends) to 26,387 and 3,232 respectively. Amazing, no?

Perhaps what gets overlooked more than anything else is what separates the above one-time negative events from the positive stories that go largely ignored over our lifetimes. And that is a story worth telling. See the companion post below:

Unheralded Positive Events Every Year Since 1970

Stay the Course,
Ashby


Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”


If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.


This post is not advice. Please see additional disclaimers.

The post Ends-of-the-World Every Year Since 1970 appeared first on Retirement Field Guide.

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By: Ashby Daniels, CFP®
Title: Ends-of-the-World Every Year Since 1970
Sourced From: retirementfieldguide.com/ends-of-the-world-every-year-since-1970/?utm_source=rss&utm_medium=rss&utm_campaign=ends-of-the-world-every-year-since-1970
Published Date: Tue, 04 Aug 2020 13:26:19 +0000

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Wildfire prone property insurance bill in California due for hearing

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The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

The bill is expected to be heard in upcoming weeks as opposing sites prepare for major battle.

A new California bill, the outcomes of which will have a lot to say about coverage for wildfire prone property in the state, will soon be headed for hearing. The hearing is expected to be a heated one as strong opposing opinions have the opportunity to be voiced.

Opponents of this bill are calling it a direct attack on consumer protections in insurance.

That said, proponents of the bill claim it is the best method for making coverage available to wildfire prone property in California. The bill in question is Assembly Bill 2167. It was written by Assemblyperson Tom Daly (D-Anaheim). If it passes,it will create the Insurance Market Action Plan (IMAP) program. The IMAP program is meant to protect residential properties.

So far, AB 2167 has progressed quickly, when taking into consideration that a chunk of the legislature has been considerably restricted by pandemic crisis precautions. It was first presented in early June and backers have been saying that it was brought forward in good timing and that it has all the momentum it needs to be passed.

That said, AB 2167 has not been without opposition. In fact, it has faced considerable opposition, having been called an attack on Proposition 103, insurance consumer protection law. California Insurance Commissioner Ricardo Lara lobbed that argument at it, calling it an “insurance industry wish list, with nothing to help consumers,” and Consumer Watchdog, whose founder, Harvey Rosenfeld, was the original author of Proposition 103.

The insurance industry strongly supports the bill, saying it will help wildfire prone property coverage.

Insurance organizations such as the American Property Casualty Insurance Association and the Personal Insurance Federation both support AB 2167. The bill also has the support of the California Association of Counties (CSAC), as well as Fire Safe Councils of California, and the CalFIRE union.

The Consumer Federation of America, another watchdog organization, has predicted that if AB 2167 passes, it will cause 40 percent increases in insurance rates. On the other hand, insurance groups claim that the bill offers owners of wildfire prone property a greater opportunity for choice and competition among insurance companies based on coverage and premiums while avoiding the limitations and high costs associated with FAIR Plan coverage.

The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

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By: Marc
Title: Wildfire prone property insurance bill in California due for hearing
Sourced From: www.liveinsurancenews.com/wildfire-prone-property-insurance-bill-in-california-due-for-hearing/8549884/
Published Date: Fri, 14 Aug 2020 09:00:14 +0000

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Is this the last hurrah for bonds?

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Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here.

Spoiler alert: I don’t think it’s good.

But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+ Year Treasury Bond ETF (name withheld for compliance purposes) is up more than 31% YTD as of July 31st.

That is insane!

But there is a good reason for this increase shown below.

The red circle shows a decrease in the 30-year Treasury rate of almost 40% over a span of six months. That’s practically unprecedented with only two periods (2008 and 1981-1982) having similar declines over such short periods.

But this begs the question: Is this the last hurrah for bonds as a driver of any meaningful return? Below is the 30-Year Treasury rate over the last 40+ years.

For what it’s worth, people have been forecasting the end of the bond bull market since 2012 (maybe even earlier) and yet it has continued despite those predictions. But at some point, the bond party will come to an end.

The Fed has been clear that they are going to keep rates stable until at least 2022 which means this may not change for a little while longer. Or in the near term, I could even see the high returns continuing if we experience pandemic economic shutdown round two.

But, I can’t see a world where this is the case for much longer than that – most importantly over the span of a 30-year retirement.

The official end of the bond bull market depends on a recovery from the pandemic economy as well as a few other factors causing rates to rise. But when they do, it seems likely to me that this may be the last great hurrah for bonds for quite some time.

The question is when to get off that train and that undoubtedly requires a personal answer.

Stay the Course,
Ashby


Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”


If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.


This post is not advice. Please see additional disclaimers.

The post Is this the last hurrah for bonds? appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Is this the last hurrah for bonds?
Sourced From: retirementfieldguide.com/is-this-the-last-hurrah-for-bonds/?utm_source=rss&utm_medium=rss&utm_campaign=is-this-the-last-hurrah-for-bonds
Published Date: Wed, 12 Aug 2020 13:47:16 +0000

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