The advent of the Affordable Care Act not only ushered in Medicaid expansion and health insurance exchanges, but also changes in how physicians deliver healthcare—moving from volume to value. This change is intended to incentivize physicians to produce better outcomes while containing costs.

From accountable care organizations to the Medicare Access and CHIP Reauthorization Act of 2015, various instruments are being used to shift from volume to value-based payment methods.

However, Medical University of South Carolina is moving away from this trend. MUSC currently pays physicians based on how much money their departments make, and relative value units, which can be a big part in compensation packages, are used to measure a physician’s productivity. RVU is a metric tied to each patient encounter, procedure, or surgery.

Beginning July 1, 2017, MUSC will link physicians’ pay to how many patients they treat. Approximately 1,000 physicians will be affected and some are concerned that the quality of care patients receive will decline.

Medical University of South Carolina is the largest health system by inpatient discharges in the Charleston market and comprises acute-care hospitals, MUSC College of Medicine, specialty centers, and MUSC Physicians, the faculty group practice (DRG Charleston, South Carolina, Market Overview Report).

According to data from Decision Resources Group, the Charleston market has a surplus of providers, with supplies of primary-care physicians, specialists, nurse practitioners, and physician assistants above national averages.

Does this move portend things to come under a Trump administration, with hospital executives hedging their bets that the ACA will be repealed and replaced, and that other aspects of the law will be rolled back? Or is it just a way to track productivity? Another possibility: This could be a way for MUSC to get rid of what it considers to be below-average performers.

Health systems in the Charleston market are highly consolidated and the physician market is fairly consolidated. Over the past few years, the trend of employing physicians has slowed because it was not as financially profitable as executives had hoped. Combine that with the surplus of healthcare providers in the market and this change could force some physicians to move to greener pastures.

For more information on topics profiled in this blog, refer to the Decision Resources Group Market Overview and Health Plan Analysis reports. In addition, stay tuned for new products from Decision Resources Group in 2017 that profile integrated delivery networks and associated clinically integrated networks. Find out more: Health Plan Analysis. Market Overviews.

Follow Joyce Caruthers at @JCaruthersDRG


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