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Podcast Library > NextGen Advisors Podcasts > Insights from Providers on the Future of the Ambulatory Practice

June 5, 2020

Insights from Providers on the Future of the Ambulatory Practice

This week’s podcast hosted by NextGen Healthcare’s CMO Dr. Betty Rabinowitz explores insights from recent discussions and polling conducted by NextGen® Advisors with leaders from large ambulatory practices across the United States.  Topics include the current and future role of virtual visits, shifts in practice revenue tied to fee for service, and the potential impact of disruptive market players.

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Transcript

Dr. Betty Rabinowitz:

Hello, everyone. This is Dr. Betty Rabinowitz, chief medical officer and principal with NextGen Healthcare. I'd like to welcome you to our podcast series featuring senior leaders from the NextGen advisors team. We use this series to address different topical subjects related to ambulatory care, exploring the successes and challenges that community providers experience from an operations, policy and strategy perspective. I'm joined again by my colleagues Graham Brown and Dr. Marty Lustick. Welcome Graham and good morning Marty.

Graham Brown:

Morning, Betty.

Dr. Martin Lustick:

Hi Betty. It's great to be here.

Dr. Betty Rabinowitz:

We recently conducted webinars with leaders from large ambulatory practices across the United States. We used the opportunity to share some of our thinking about the post-COVID practice of the future and also to poll audience to gain insight into the situation these practices are currently experiencing, four months into the emergence of COVID cases in the US. Today, we'll discuss some of the themes of those discussions and the data emerging from the poll of just under a 150 individuals who participated in the sessions. Let's get going. The first topic we addressed and our first poll result spoke to the current percent of care that was being provided virtually. And our follow up question asked practices, what percent of care would continue to be provided virtually in the future? What we found when we asked practices about the current percentage of virtual visits they were conducting, was that 48% of responders were doing more than 50% of their visits virtually, only a very small percentage we're doing no virtual visits and another 31% we're doing about 25% of the volume of their care virtually. When we asked them whether they felt virtual visits would persist and how much of their care would be offered virtually post-COVID, 61% of respondents said that about 25% of the post-COVID clinical volume would be addressed virtually. Marty, what was your impression when you saw these results?

Dr. Martin Lustick:

I have to say I was impressed with them. Even though we've been talking to people across the country and hearing them explain how they implemented virtual visits, when you think back to just four or five months ago, we know that in most practices, virtual visits were either nonexistent or barely measurable. And so to see that almost half of them are doing more than half of their visits as virtual visits and all of them, except for a tiny percent, see it as a very significant part of their practice going forward, just tells you how much of a sea change we've experienced in just a few months.

Dr. Betty Rabinowitz:

Indeed. Graham?

Graham Brown:

I really agree with what Marty just said. I think I would've anticipated that when they responded to how many virtual visits as a percent of their workload would be present in the future, I would've anticipated that they actually answered with a higher level. I think what I've heard from different practice leaders and certainly from others is we read a great deal in the media around how popular virtual visits have become with patients. And I think we've very much got the perspective that we won't go back to normal. And so if is currently over 50% of appointments being handled virtually in 48% of practices, that to me would suggest that going forward, there would be a greater percent delivered this way. I would've thought that the results would be higher than they were.

Dr. Betty Rabinowitz:

That's interesting. I wonder if folks have been hedging their bets a little bit, being cautious in the context of preparing for scaling back of some of the payment regulations and waiting to see which way that turns out.

Dr. Martin Lustick:

I think there are a couple of other factors that probably contribute to that as well. One is, I'm sure that many of the providers are expecting a rebound of the pent up demand for people that they know they need to see in a face to face encounter but have been putting it off because of the pandemic. And so they anticipate some decreased proportionately. And also of course, related to that is what specialty they're from. Some specialties lend themselves much more to doing this than others and we had a mix of specialties in the audience.

Graham Brown:

It's a good point, Marty. I think, if we were talking to a purely behavioral health crowd who have been very successful in the last several months and even before the pandemic in conducting some of their care virtually, the responses would've indeed probably trended toward a higher percent going forward.

Dr. Betty Rabinowitz:

Absolutely. As you know, and we've discussed this in earlier podcasts and our blog, the COVID-19 pandemic is viewed by many as a watershed event in healthcare. The precipitous drop in face to face encounters, as the stay at home order were issued by states, had a huge impact to practice revenue with plummeting face to face visits. We wanted to learn when we were talking to these leaders and polling them, we wanted to learn more about how reliant practices were on fee for service revenue now and if they anticipated that the ratio of pure fee for service revenue would decrease by increasing value based payments in the future. And we asked them what their perception was of the percent of care they render now in a fee for service basis and then what their prediction was going forward. Currently the audience that we polled, 41% of them felt that they had less than 50 of their revenue currently from fee for service. 28% of the respondents felt that they had about 50 to 75% of their revenue currently from fee for service and 31% of the respondents had greater than 75% of their current revenue from fee for service. Let's relate to these results before we look at the projections. Graham, how do you interpret these results?

Graham Brown:

For ambulatory care providers who have been, I think, actively understanding what types of value based payment arrangements are appropriate and useful for their patient populations, we have for several years, since the pass of the Affordable Care Act, passage of that, really seeing a shift into value based care. The fact that 41% right now have less than half of their revenue tied to fee for service, was to me a really encouraging sign. That there's a real trend within ambulatory care to accept value based payment, to understand the greater needs of the population and to shift away from this fee for service model that really drives volume and isn't necessarily focused on outcomes. The fact that there was still 30% of respondents where greater than 75% of their revenue is still tied to fee for service, really kind of paints the other side of that coin. And to some extent, it feels like this is that transition period where we've got almost even cohort that's sitting embracing value based care, we've got an equally, almost equally sized that's kind of in the process of moving. And then there's still a good chunk of providers who are really dependent on fee for service revenue. It represents the mix of specialties, of course, that are out there but at the same time paints a broader picture I think about how fundamentally tied to a fee for service model we still are.

Dr. Martin Lustick:

I agree with what you said in terms of being in a transition, Graham. I have to say, I was surprised that there was at least a plurality of respondents that are deep enough into value based care that it accounts for over half of their revenue at this point. If I had been asked to guess ahead of time, I would've thought there was even greater dependency on fee for service than these responses suggest. I find it as first of all, consistent with our view that value based care is here to stay and it's growing. And that there's this many organizations that are already that committed to value based care is to me, a very encouraging sign.

Dr. Betty Rabinowitz:

Would either of you like to comment on the fact that this was likely an audience with a fair amount of representation from the West Coast and probably a predominance of multi-specialty primary care groups versus events where we have more of our specialty focus groups with orthopedics and ophthalmology among them. How do you feel that impacted this response?

Dr. Martin Lustick:

I'll take that one, Betty. I think you're making your great point. We know that value based contracting, capitation in fact, is much more prevalent on the West Coast than the East Coast. Many of NextGen's clients in California are for example, community health clinics and they have capitated contracts for their Medicaid population. I'm sure that geographic spread does skew these results somewhat. As well as the specialty spread. as much as we know there are bundles out there, they're still in much earlier stages of both development and implementation in the sort of broader ACO type arrangements that people are in.

Dr. Betty Rabinowitz:

Thanks, Marty. Let's pivot to the question that we asked the audience, if this is where you are now for fee for service, how do you project the fee for service ratio to total revenue that you would experience going forward in the upcoming year or post-COVID? The question was, do you feel that ratio will decrease, increase or remain unchanged? And the responses we got were 67% of the respondents felt that the ratio of fee for service to total revenue would decrease, a very small percentage of the respondents felt, 3%, that that will increase and 31% of the respondents felt there would be no change. How did you interpret these results, Graham?

Graham Brown:

This really was in line with what I anticipated. I would've projected as we look at the ambulatory care community, that two thirds of the audience would foresee a growth in their value based care arrangements or less dependence on fee for service. This was very much in line with what I anticipated. The few percent that indicated an increase felt a bit like an anomaly and that for some practices that may indeed make sense but that the trend wasn't sitting there. And then for others, I think whether it's where they're located in the country to Marty's point just a few minutes ago around the differences in geography that are anticipating no change, we'll see whether that plays out or not.

Dr. Martin Lustick:

Yeah. What I see in this is a very clear message that provider organizations really believe that value based care is here to stay. And that if anything, the pandemic is moving us increasingly towards value based care as a more stable, sustainable approach than the traditional fee for service one. That we have such a large proportion that are already fairly deeply into value based care and even among those, we have two thirds of the respondents that see that trend continuing forward, tells me that this is there's kind of no going back in this space right now.

Dr. Betty Rabinowitz:

Absolutely. And the last topic that I wanted us to explore today relates to healthcare market disruption. And we delved into two dimensions with our participants in these conversations, the growth of healthcare services within the retail setting online or from nontraditional providers and the increasing merger and acquisition activity over the past decade as financial pressures have driven consolidation in the healthcare market. We asked our participants whether they were concerned about disruptive markets entrants. And we asked specifically whether they were concerned about the increase in retail healthcare providers. Of our respondents, 12% said they were indeed very concerned, 47% said they were somewhat concerned and 41% said that they were not at all concerned. Marty, how did you kind of interpret these results?

Dr. Martin Lustick:

Yeah, these were more or less in line with what I expected. I do think some of this is geographic. As someone who happens to live in New York State, where the regulatory environment creates very sign barriers to entry for some of these most disruptive approaches, I think providers in those areas are going to be less concerned about this. The fact that almost two thirds are either somewhat or very concerned, tells me that there's an awareness that there's huge investments in these retail clinics and that those who are doing the investments have deep pockets and are probably not going away anytime soon. We've talked a little bit among ourselves about how those groups like Aetna and CVS are thinking right now, whether they see this as a big opportunity or a big threat, the changes that have been taking place. And so I wasn't too surprised with these results.

Dr. Betty Rabinowitz:

Graham?

Graham Brown:

One of the comments that arose in our conversation with our participants was around what was the threat around this? And what I found interesting was one of the respondents said, "These are really just different points of access for patients." And that in that person's practice, the relationship between the provider and patient was sound and that they knew that their patient was going to come back to them for their regular care for all the important stuff. If a patient needed to get something done quickly, call a physician out of hours and have a concern addressed, that provider really wasn't particularly concerned around what the impact might be to their practice. It makes me then think a little bit about federally qualified health centers who really, I would imagine retail is a bit of a distraction for them and not necessarily fundamental to their concerns. The patient provider relationship and where this might have the greatest impact is perhaps around primary care and whether it devolves a relationship between the patient and the provider. For specialist care, I wouldn't anticipate this is particularly a grave concern for them. And so, it's interesting to hear from that provider's perspective that really, if they continue doing what they need to do and do it well in serving their patient population, that retail is really just another access point that doesn't need to threaten the primary care world.

Dr. Martin Lustick:

Yeah. I would be a little concerned that the providers may be underestimating the Aetnas and CVSs of the world because now that those two are combined, the potential for them to create an insurance product that would be sold where the hub of care would start in the retail space and they would develop their own referral networks within that, could become much more of a threat to even large ambulatory care practices. The long view on this is I think the jury's still much out on how much of a risk this presents to ambulatory practices.

Dr. Betty Rabinowitz:

Thank you both. I would love for us to devote a podcast in the future about this topic. I think it's rich and multidimensional. We might devote one of our next podcasts to this. And to our listeners, thank you for listening today. I'd like to thank Dr. Marty Lustick and Graham Brown for sharing their insights and perspective on these topics. If you enjoy today's topic, consider subscribing to our podcast. This is Dr. Betty Rabinowitz with NextGen Healthcare. Have a great day.