The future of dermatology practices
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Dermatologists predict more collaboration, larger groups, fewer procedures in the near future

The Affordable Care Act (ACA) became law four years ago this month, but dermatologists are just beginning to understand how the law will impact the way they practice, and while there are a range of opinions among the dermatology community, nothing is certain. Dermatologists who have been carefully monitoring the health system’s changes over recent years predict the new look of the specialty in the coming years will involve more patients, more non-physician clinicians to see them, more coordination of care among multiple providers, even within the specialty, and significantly more dermatologists practicing in group settings. 

A new population of patients

While dealing with an existing workforce shortage, dermatologists are also poised to face increased demand from a significantly expanded patient population. The Congressional Budget Office estimates that the ACA will reduce the number of uninsured from 48 million to 23 million between 2014 and 2024. Of those obtaining coverage, 12 million are expected to purchase insurance through health insurance exchanges like, while 13 million will be newly covered through the Medicaid expansion. The White House places the estimate of uninsured who will be extended coverage at 30 million. Even if those estimates are optimistic, the challenges of so many newly insured patients seeking care will be significant for an overextended provider base, though not necessarily unprecedented, according to Mayo Clinic dermatologist Randall K. Roenigk, MD.

“Obviously, some of those 30 million or so uninsured will want to be seen by dermatologists, and many of our issues going forward will involve extending services to those who were, until recently, uninsured,” Dr. Roenigk said. “The comparison between the ACA and the introduction of Medicare in 1965 is a good thing to remember. In the end, the patients didn’t overwhelm the system, and suddenly doctors were getting paid for treating patients who weren’t able to pay for treatment in the past.” [pagebreak]

The deadline to obtain coverage for citizens who do not currently have insurance or meet exemption requirements is set for March 31, when the open enrollment period ends. Following this deadline, the government can fine individuals who have failed to find coverage up to 1 percent of a household’s annual income. (This penalty will rise to 2.5 percent of income by 2016 and will be assessed through income tax filing.) Those not covered by the Medicaid expansion will be eligible for subsidies to help pay for their health insurance if they are at 133 to 400 percent of the federal poverty level, which was set at $11,490 for an individual and $23,550 for a family of four in 2013.

Non-physician clinicians and the dermatology workforce

While the physician workforce remains flat, non-physician clinicians (NPCs), both physician assistants (PAs) and nurse practitioners (NPs), have and will continue to see significant increases in numbers. This will make them a major player in the future of health care delivery, according to Brett Coldiron, MD, who takes office as Academy president this month.

“When you’re seeing all these new PAs and NPs, and no new doctors, it’s obvious they’re going to be providing a lot of care going forward,” Dr. Coldiron said. “If they’re part of our team, properly supervised, there’s no issue. But we’ll also see a lot of physicians setting up PAs and NPs in their own offices with remote or very minimal supervision.” Such arrangements are contrary to the delegation and supervision language in the Academy’s position statement on the practice of dermatology; see for details.

An Agency for Healthcare Research and Quality-supported study in Public Health Reports predicted a 72 percent growth in the number of PAs by 2025, and a recent study in Medical Care predicted that the number of NPs will increase by 130 percent for the period between 2008 and 2025. A full 40.9 percent of dermatology practices reported employing either a PA or NP in 2012, and the number is projected to grow as demand for services does. [pagebreak]

According to Mark Lebwohl, MD, a member of the Academy’s Board of Directors and its 2014 president-elect, cautiously integrating these NPCs into the practice of dermatology will help stabilize the specialty going forward. He notes that the Academy is considering ways to better serve dermatology practices employing NPCs. While still in early stages, that effort is focused on practices where NPCs work under direct, on-site supervision of a dermatologist and would provide the dermatologists in those practices with help ensuring that the NPCs who work for them are able to remain up-to-date. “There’s fairly widespread support on the Board and with the membership for that,” Dr. Lebwohl said.

Physicians may have to look for help in areas beyond hiring and training NPCs to manage the increased administrative burden that has also developed as they manage these patients. But current scope of practice rules appear to be inconsistent with increasing regulatory demands on physicians, according to Alexa Kimball, MD, MPH, professor and vice chair of dermatology at Harvard Medical School and Massachusetts General Hospital. Resolving that conflict, she said, will be key to determining the future of dermatology practices.

“The regulations to date ironically prohibit areas where other providers and staff can be involved in care, while increasing what physicians have to do. They haven’t really given physicians a break in how they have to ultimately document, record, and take responsibility for what has occurred in a patient visit,” Dr. Kimball said. “So what we’re seeing is scope of practice definitions — even down to what medical assistants are allowed to do — coming head to head against regulatory and administrative burden issues for their supervising physicians. It’s becoming much more difficult for physicians to practice, especially in high-volume specialties like ours.”

The end of solo practice?

Though the most common practice setting for dermatologists was, for years, solo practice, the membership data collected by the Academy has shown a slow but steady decline in solo practitioners. In 2005, according to the Academy’s Dermatology Practice Profile Survey, 44 percent of dermatologists reported practicing solo. By 2012, that number had declined to 38 percent, with more dermatologists joining dermatology groups or going into academics. What is, at present, a small trickle out of the traditional practice model could turn to a flood of solo dermatologists leaving the workforce as older soloists retire, while younger soloists may choose to join groups and academic centers. [pagebreak]

Retirees will be replaced by younger physicians who have demonstrated more predilection toward becoming employees, Dr. Roenigk suggested. Newer generations of physicians, he said, are placing more focus on work-life balance and less on entrepreneurial independence.

“For 10 or maybe 20 of my years at Mayo, we always had openings for dermatologists in our Health System practices in rural Minnesota. It was tough to recruit those positions,” he said. “We’ve seen so much more interest in health system jobs across the country in the last decade. People more and more want to be employees, make a steady salary, and be done with work when they clock out.”

Another factor driving dermatologists to consider options other than solo practice, according to Dr. Kimball, is the administrative and regulatory burden on practices, which make joining a group more cost-effective from a management standpoint.

“Why hire a half-time equivalent person to manage meaningful use when you can hire one person for 20 people? Figuring it out for one provider is essentially the same as figuring it out for 20,” Dr. Kimball said. “Those regulatory mandates will increasingly drive the people who are coming out of residency into group practices to manage those issues for them.”

While she admitted that this might often be framed as a negative scenario, Dr. Kimball said that the end result of more dermatologists pooling resources and efforts in groups is likely to be dermatologists spending more time on the practice of dermatology, rather than administrative headaches.

A third pressure on the solo practice of dermatology, according to Dr. Coldiron, is the larger health system under the ACA generally disincentivizing solo specialty practice by physicians. The present market pressure, he said, has moved from the government and insurance companies toward the providers. This pressure, he said, includes not just quality reporting and EHR requirements, but lower reimbursements for common procedures creating economic disincentives for solo practitioners. But physicians who cut back on money-losing services or stop taking certain insurance, he said, will be portrayed as rapacious and self-serving. For young dermatologists carrying hundreds of thousands of dollars worth of medical school debt, the risk of facing these conditions alone may soon be too great for most to consider. [pagebreak]

“The overwhelming force, now with the ACA but before with meaningful use and PQRS, is toward solo physicians forming groups,” Dr. Coldiron said. “As a young doctor just coming into dermatology, you’re far better off forming or joining a larger dermatology group than going it alone. I don’t know how a solo doctor would be able to keep up with the administrative burden and still practice while reimbursements decline.”

The new dermatology practice

Keeping these developments in mind, the overall question remains — what will the dermatology practice of the future look like? While many opinions differ, most of them begin from the assumption that it will differ strikingly from our current picture of dermatology, and may involve more virtual visits, more subspecialization and coordination between subspecialists, and new payment models that reward outcomes.

A team-based approach (see last month’s cover story, “Team Approach”) is one of the more agreed-upon tenets of health delivery going forward. But even further, Scottsdale, Ariz. dermatologist W. Patrick Davey, MD, MBA, a member of the Academy’s Council on Government Affairs, Health Policy, and Practice as well as that Council’s Workgroup on Innovations in Payment and Delivery and chair of the Practice Management Committee, sees a future where providers — even dermatology subspecialists coordinate — on a single patient and their record.

“I think there will be a team of dermatologists providing care. It may be sort of a virtual team that we have, with a Mohs surgeon in one office and a medical dermatologist in another area as part of a larger multispecialty team, virtually organized through networks,” Dr. Davey said. “What we’re seeing is having essentially an information exchange where I send information about dermatology, and the primary care doctors put the information into their system. We’ll have a pathologist coming in at the end to provide lab results, and everything will be mingled into a common chart.” [pagebreak]

Dr. Coldiron also pointed to more specialization and group integration as the ideal future makeup of dermatology practices. Certain subspecialties, he said, will soon prove easier to embrace than traditional general dermatology for young dermatologists.

“A lot of the shift in dermatology away from general dermatology has been toward skin cancer. And some people bemoan that, but I think it’s not entirely unreasonable. You can cure it, which is rewarding, and the patients are grateful,” said Dr. Coldiron, whose own career has seen him move to focus exclusively on treating cancer with Mohs surgery. The move reflects a need to address an epidemic of skin cancer, he said. “Likewise, aesthetic dermatology continues to be in demand, and the 10,000 new baby boomers retiring every day have proven that they’ll pay to maintain their health and appearance longer. Large group practices in the future can address the public’s dermatologic needs and spread the risk and administrative burden.”

Dr. Roenigk predicts that current experimentation with payment models and discussion of reforming how physicians are reimbursed will lead, eventually, to dermatologists being paid for outcomes rather than on a fee-for-service basis. Navigating such a shift, he said, will require demonstrating outcomes in a tangible fashion, which will provide a new challenge to a high-volume specialty.

“We’re only 1.5 — 2 percent of medicine, so we need to demonstrate value in the system,” Dr. Roenigk said. “Incentivizing our surgeons and pathologists to do the right thing on a value basis will prevent regulators from deciding that we shouldn’t be self-referring pathology, or that we can’t do Mohs in our offices because it’s continuing to cost the system a lot.”

The Academy is currently working on a group practice blueprint that targets the five areas of the country with the most dermatologists in small groups and the highest number of ACOs, according to Dr. Coldiron. The project aims to create a tool to help members determine the cost to meet the applicable federal and state regulations in regards to forming a larger dermatology group. If successful, Dr. Coldiron said, this tool would allow dermatologists to fill in certain practice information and determine the economic feasibility of forming or joining a larger dermatology practice. This should eliminate the initial investigative costs normally associated with doing so, though it will not eliminate the eventual need for an attorney and/or outside consultant. [pagebreak]

As these larger organizations form, Dr. Davey said, physicians are likely become part of the governance structure of their practices and health systems. Non-physician clinicians, he said, will be delegated most of the day-to-day procedural work while the physicians will coordinate care across provider networks and see patients with unique conditions, difficult cases, and complications. The ultimate value of physicians to their practice, health system, or network will be in the value of the outcomes their work generates rather than the number of procedures performed.

“We in dermatology need to think about effectiveness going forward — to focus on not just getting patients seen, but achieving high-quality positive outcomes for them in the most efficient manner possible,” Dr. Davey said.



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