Heading for the exit?

Are ophthalmologists retiring due to the heavy hand of the government?

By Robert Calandra, Contributing Editor

David W. Park II, MD, has heard the ophthalmologists grumble.

Fed up with a Medicare regulation requiring them to shell out for pricey electronic record technology or face fee schedule penalties, let alone other legislative mandates, ophthalmologists are complaining: They want to retire.

“We hear a lot of physicians who are saying, `I’m mad as hell and I’m not going to take it anymore, and I’m going to retire,’” says Dr. Park, CEO of the AAO, echoing the audience from the movie “Network.”

“I think these are real and really strongly held feelings.”

Mark Kropiewnicki, principal attorney and president of Health Care Law Associates and of The Health Care Group Inc. in Plymouth Meeting, Pa., says some clients sound the same.

But federal regulations aren’t the only directives that have older doctors upset. There are also state and local regulations to contend with that make running a small ophthalmology practice onerous.

“I’m [hearing] a lot of people, the older guys, saying I’ve had it with this stuff,” Mr. Kropiewnicki says. “There is too much, and it is getting worse.”

Dennis Hursh has had several of his ophthalmology clients tell him how installing and using an EHR system, for a time at least, is going to hurt their practice.

“I have clients who say ‘we’re looking at what EHR is going to cost and it will be at least a month where we have 20% productivity,’” says Mr. Hursh, principle at Hursh and Hursh PC, a Middletown, Pa., firm that specializes in health-care contract negotiation and drafting.

So far, so fair

While so far there’s no evidence of a mass retirement movement among ophthalmologists — young, old, or middle aged — the AAO, which represents 94% of U.S.-based ophthalmologists, says that about 400 physicians have retired annually for the past eight years. But each year the Academy adds only 100 to 150 new members to its membership.

According to data from the American Board of Ophthalmology, in 2013, it certified 499 ophthalmologists. By 2015, that number shrunk by almost 50 (see Table 1, page 68).

While there are no formal, concrete numbers available on retirement rates, John Pinto, president of J. Pinto and Associates, the San Diego, Calif., management consulting firm, puts the ophthalmologist retirement rate at “two to three times the pace” of new doctors entering the profession.

A look at the options

Not all physicians who opt out are turning off the lights and locking the doors. Most go the more traditional routes of selling to larger groups or bringing in younger associates to take over their practice.

But some are choosing another alternative — selling their practice to a private equity firm.

“Private equity interests have emerged for one simple reason,” says Shareef Mahdavi, senior vice president of Alphaeon Corporation, a California lifestyle health-care company. “It makes financial sense.”

And yet another alternative: going cash only. The Medscape compensation report, while generally just having a small sample of ophthalmologists in its annual survey, shows a 1% rise in those who have gone cash-only between 2013 and 2016.

Death by 1,000 cuts

Doctors say that the way medicine is delivered today, as opposed to a decade ago, has infringed on the physician-patient relationship. And regulations have played a significant role.

“It’s constant,” says Mr. Kropiewnicki. “It’s not like I’m squared away and good to go for the rest of my life. I’m good to go for the next five minutes until they come up with a new rule that I may not know about for a month or a year.”

EHR may be the main reason for the mass retirement threat, but it isn’t the only reason. It’s just the cherry on top of the regulation sundae. Like most businesses, medical practices must meet all federal, state and local regulations, from Wage and Hour rules to Occupational Safety and Health Administration standards. But it doesn’t end there. They must also comply with directives — like EHR — that govern medical practices.

Staying abreast of all those regulations is time consuming, expensive and utterly confusing. Even Mr. Kropiewnicki, an attorney who advises clients about running their medical practices, admits he doesn’t know all the ins and outs of every regulation. He sometimes “has to learn many and be aware of them.”

“You have all these things out there, and it is getting harder and harder to run a practice,” he says.

And that all boils down to money. EHR, which has a price tag that scares a few and a learning curve that has probably humbled more, can translate for most as a drop in practice productivity (at least temporarily) and revenue. But EHR is most likely the future of American medicine, and, if that is true, there is no turning back.

To ease physicians into the EHR, Medicare established an incentive program for eligible physicians and hospitals. The fee schedule penalty is set to begin in a mere few months.

Medicare-eligible professionals who did not adopt or successfully demonstrate “meaningful use” of EHR will face a fee schedule penalty of up to 3% by 2017, according to CMS.

“Ophthalmology has such a large percentage of Medicare [reimbursed procedures] that [the 3%] is a pretty big hit,” Mr. Hursh says.

As for the Physician Payments Sunshine Act, the public exposure of ophthalmologists’ public income appears more annoyance than concern. “So you look in the paper and you see that your local doctor is getting $2 million from Medicare [and] you think, ‘Obviously this guy is living high on the hog and just raking in the money,’” Mr. Hursh says. “It doesn’t mention that there is a 6% mark-up on the drugs and that is mostly the super expensive drugs they are using. Explaining that to patients is getting tiresome for some physicians.”

In 2014, about 60% of the cash coming into an ophthalmologist’s office came from Medicare, a figure that makes sense, experts have said, considering the percentage of seniors with eye issues.¹

The way the wind is blowing

If ophthalmologists aren’t following through on their threats to retire, what effect are the new regulations having on the specialty? Dr. Park says almost one-third of all ophthalmologists are staying in their solo or small — one to three physicians — practices, giving ophthalmology “a wide spectrum of heterogeneity” that he expects will continue well into the future.

But AAO’s statistics also show a “slow but definitive” movement of solo and small practices merging into mid-size groups. The trend makes sense, especially for older physicians. Along with defraying the cost of expensive purchases like EHR, a mid-size group practice can afford to bring an IT person on board. Figures from the Academy’s database shows that in 2012, 19.6% of all practices listed themselves as solo practices; in 2015, that figure dropped slightly to 19.4%.

Mid-size practices can acquire more sophisticated programs than solo practices, Dr. Park says. “There are contracting advantages, coverage advantages and the ability to bring on more sophisticated managers.”

Those same economies of scale are why private equity firms are scooping up smaller ophthalmology practices. Mr. Mahdavi says the firms buy practices and combine things like billing and purchasing to gain efficiencies and improve profitability. Once the “turnaround” is completed, the equity firm sells the “portfolio of practices” to a hospital or a mega practice. Doctors who become employees are not always happy.

“My experience speaking to doctors who have become employees is that they don’t like it,” Mr. Mahdavi says. “The promise of fewer hours and less administration gets replaced with restricted freedom on the doctor’s practice of medicine.”

Mr. Hursh isn’t convinced that the slow evolution of smaller practices into bigger practices is necessarily the best thing for ophthalmology. He’s not worried about the quality of care. He’s concerned about losing the intimacy of the doctor-patient relationship.

“In my mind, I want my doctor to be somebody who is running his or her practice who is very concerned with my satisfaction,” he says.

Dr. Park has that same worry. He acknowledges that increased regulation and more paperwork are infringing on the “importance and, to a certain extent, the sanctity” of the physician-patient relationship. But what he’s finding is that physicians are changing how they practice to minimize the effect.

“A lot has to do with developing more effective teams and coordinating care among various physicians and other providers,” he says. “As much negativism that I hear, I also hear periodically that this has forced us to look at the way we deal with patients.

“It’s not all entirely negative.” OM

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