Practice/Profession of Ophthalmology: Impact of Consolidation. David W. Parke II, M.D. CEO American Academy of Ophthalmology
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1 Practice/Profession of Ophthalmology: Impact of Consolidation David W. Parke II, M.D. CEO American Academy of Ophthalmology
2 Consolidation Happening in industry Happening in medicine generically? Happening in ophthalmology? What is the trend? What are the likely impacts? How can we make it work for the profession and for the padents?
3 Healthcare System Integration: Is It an Unintended Consequence? The economic forces put in modon by the [PPACA] Act are likely to lead to ver$cal organiza$on of providers and accelerate physician employment by hospitals and aggrega$on into larger physician groups. DeParle et al, Annals of Internal Medicine, 2010
4 Hospital Integration 20% (1K of 5K) of U.S. hospitals will seek out mergers between Booz & Co. 65% of buyers are non- profit in 2012 Trinity Health/Catholic Hospital East Ascension Health 82 hospitals 113 hospitals 2012: 1/3 of ASC s that disappeared became hospital out- pt departments (HOPD s)
5 How Significant is MD Employment? 53% of MD s are currently self- employed 61% in 2007; 76% in % of primary care; 72% of surgical sub- specialists AMA survey of 3,466 MD s released 9/16/13 212,000 MD s employed by community hospitals; 160,000 in 2000 AHA 2011 data
6 Physician ACO Participation About 25% of physicians are in ACO s About 15% planning to join soon Shortell et al., Health Services Research, % of ophthalmologists pardcipate in ACO s Contractually affiliated: 77% AAO 2013 survey data
7 Ophthalmologists and ACO s 1% of ophthalmologists employed by ACO s; 2% of ophthalmologists employed by hospital or hospital- owned MD group 2013 Academy biennial survey of US members
8 Ophthalmology and Hospitals Eye care amounts to less than 1% of hospital revenue Hospitals lose $ K per yr per employed physician in the first 3 years of employment But hospitals generally receive 5-10X surgeon salary in related revenue not in ophthalmology ASC s being repurchased by hospitals resuldng in diversified procedure mix and per procedure revenue
9 Consolidation: Narrow Networks Medicare Advantage: narrowing networks ACA exchanges have mostly narrow network plans McKinsey: 70 percent of products One OB in one network for 400 sq miles One redna surgeon for 200,000 people
10 Narrow Networks: Going Forward RegulaDon of network adequacy All ACA plans approved for adequacy o But much more anendon for next year Complaints unlikely to block narrow networks o Federal outlays dependent on keeping premiums down o Public much more sensidve to costs now
11 Consolidation: More Reference Pricing total joint replacement California: Price varies from $15,000 to $110,000 (commercial PPO populadon) Anthem Blue Cross and CalPERS (1.4M) have established a threshold of $30,000 reference price for a standard inpadent hip/knee replacement procedure. PaDent exposed to full price above $30,000 level 46 hospitals qualify over 50 did not. Impact for AMD, glaucoma, refrac$ve surgery?
12 Is Ophthalmology on the Radar? Ophthalmology has two of the Top Twenty diseases on total cost basis for CMS: Cataract Glaucoma If CMS included Part B outpadent drug costs, ophthalmology would have four, including: AMD DiabeDc rednopathy
13 Consolidation: Focus on Quality $65BB paid for higher quality and more efficient treatment within FFS 155,000 PCP s and 60,000 specialists in such arrangements and 24MM enrollees July 9, 2014 BCBS AssociaDon
14 IRIS : Consolidation of Data 3,356 Academy members signed with IRIS 3,797 interested and awaidng contract Some either on EPIC or not eligible 23 different EHR s
15 Uptake OIS 2013: OIS 2014: 370,000 pt visits 10,140,000 pt visits 3,940,000 unique pts
16 The Projections OIS 2013: 2MM pt visits by 2016 OIS 2014: 33MM pt visits by 2016
17 Clinical IT Consolidation: Potential Industry Impact Bener, faster, cheaper clinical trials with real- world data Huge populadon- based natural history data Bener post- market surveillance studies More rapid, complete comparison of products for physicians and industry Periodic new datapoints allow for customizadon
18 Ocular Surgery News, March 10, 2014 To jump to the bo=om line: Every ophthalmologist should not just walk but run to sign up for this program. Not only will it provide great value to the individual ophthalmologist and his or her pracece, but it is criecal to the success and future standing of ophthalmology in the U.S. as a whole. Richard L. Lindstrom, MD
19 Ophthalmology as a Career Extremely Satisfied 49% Very Dissatisfied* Somewhat Dissatisfied 2% Somewhat Satisfied 10% Very Satisfied 38%
20 Extremely/Very Satisfied 100% with the Academy 80% 60% 58% 62% 65% 67% 69% 74% 75% 76% 40% 20% 0%
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