athenahealth, Sermo release results from Physician Sentiment Index

athenahealth, Inc.Mar 26 2010

athenahealth, Inc. (NASDAQ: ATHN), a leading provider of internet-based business services to physician practices, and Sermo (http://www.sermo.com), the world’s largest online community for physicians today, released results from a first-of-its-kind “Physician Sentiment Index ^SM” (PSI). 1,000 physicians responded to questions revealing pain points and frustrations relating to the business of medicine, reimbursement protocols, government’s hand in healthcare, and other variables that stand to threaten the delivery of quality care in America.

“There’s a real conflict happening between the exam room and the front desk at many physician practices across the country. We’re seeing this cottage industry of 5-10 group physician practices go out of business because they are focused on patient care and not focused enough on their business”

“Physicians want to focus on being the best doctors they can be, but there are all these things getting in the way,” said Jonathan Bush, CEO and Chairman of athenahealth. “They’re caught between caring for their patients and remaining viable businesses. You’ve got stimulus dollars encouraging them to abandon a pen and paper system for electronic health records that are yet unproven, huge headaches that come from dealing with reimbursement protocols, hospital systems pressuring independents, and heath reform that will expand overly stressed state Medicaid programs—it’s no wonder the sentiment is pretty bleak.”

“There’s a real conflict happening between the exam room and the front desk at many physician practices across the country. We’re seeing this cottage industry of 5-10 group physician practices go out of business because they are focused on patient care and not focused enough on their business,” said Dr. Daniel Palestrant, CEO of Sermo. “These are MDs, not MBAs, and here they are on the front lines dealing with the burden of balancing patient interaction with reimbursement complexities and managing a practice. They are frustrated—their view into cash flow is limited because they aren’t getting paid for 60, 90, sometimes 180 days after services rendered. And if they don’t understand their own financial standing, they’re not going to feel optimistic that changes in healthcare—under the guise of cost control—will better their individual situation or the quality of care they can deliver to their patients.”

Pessimistic About Fate of Quality Care in America

Physicians’ perspective on the future of medicine is clouded by the mix of current realities and by what might become reality should reform get passed. There is a feeling that they have lost control over their own profession.

• 64% cited the current healthcare climate as somewhat or very detrimental to their delivery of quality care
• Only 22% are optimistic about the ability of the American physician to practice independently or in small groups
• 59% are of the mind that the quality of medicine in America will decline in next five years; only 18% believe the quality of medicine will improve
• The majority (54%) strongly disagree/disagree that more active government involvement in healthcare regulation can improve outcomes; less than a quarter feel otherwise
• A shift from fee-for-service to pay-for-performance gives hope to almost half (49%) who think it will have a very/somewhat positive impact on quality of care
  • However, 53% believe pay-for-performance will have a negative/very negative impact on the effort required to get paid

Physicians vs. Insurers – An Uneven Fight

Frustration with payors’ changing reimbursement protocols and regulations is universal among physicians. They want to render service and care, not worry about third parties influencing decisions about who they can treat, how they treat, and, ultimately, the kinds of outcomes they can affect:

• 77% strongly agree/agree that time spent with payors and third parties inhibits their ability to spend time with patients (5% feel differently)
• More than three-quarters believe payors inhibit the care physicians would like to provide their patients; just 7% feel the care they would like to provide is unaffected by payors
• Only 16% say they are basing their clinical decisions on what they think is best for the patient rather than what payors are willing to cover
• 92% strongly agree/agree that getting paid by insurers has become increasingly burdensome and complex (less than 1% suggest it is getting better)
  • Similarly, 81% strongly agree/agree that getting paid by Medicare has become more burdensome and complex, and 83% strongly agree/agree that they feel the same about Medicaid
• 83% strongly agree/agree that administrative costs incurred in order to comply with payor rules and regulations significantly affects their bottom line

MDs Shouldn’t Need MBAs

Despite their calling of caring for patients, many physicians are required to step into a front-of-office role if they want to practice independently. Almost a quarter of doctors responding to the survey are primary decision makers with respect to billing and administrative decisions. Yet few exhibit a clear understanding of the business end of their practices. This is extremely telling of the sheer complexity that is healthcare administration:

• Conceptually, physicians struggle to understand cash flow—only 25% could correctly define the term
• 33% don’t know their average length of time for accounts receivable (for 51%, the average length of time is somewhere between 30 and 90 days)
• 82% feel challenged in hiring and retaining qualified staff
• Though income has been trending lower for many practices, 34% believe their financial situation will be worse or much worse next year versus this year
• Nearly half (43%) don’t know what their insurance submission rejection rate is
  Among physicians who know their submission rejection rate, a range of 5-10% was most commonly cited. If one considers that, for the practices of responding physicians who claimed to know their income, the average income is $2.5 million, this rate could mean $125-250,000 in deferred or lost income per practice.

Investing in the Promise of Electronic Health Records (EHRs)

Doctors’ opinion on EHRs is highly favorable, but it’s clear that current solutions are not where they need to be—particularly given the government’s $19 billion push to get physicians to adopt EHRs:

• 81% expressed a very favorable/somewhat favorable opinion on EHRs
• Yet only just over a half (51%) feel EHRs are designed with them in mind
• 54% strongly agree/agree that EHRs slow down the doctor during patient exams
• Only 5% feel EHRs are alleviating the effort to stay on top of changing payment requirements/incentives
• 60% strongly agree/agree that EHRs distract from face-to-face interaction with patients (21% feel face-to-face time is not being compromised by EHRs)