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  President’s Desk

 

CAP Today

 

 

 

June 2011

Stephen N. Bauer, MD

50 ways to leave the basement

Try a new role, Flo
Bend an old trend, Gwenn
Pick up a class, Chas
There’s no reason for doubt.
Study the genome, Jerome
Address the LIS, Jess
Check out these data, Beta
Change is what it’s about.*

Almost 100 pathologists gathered in May in Washington, DC, for the 2011 CAP policy meeting. We have a firm commitment to advocacy on the national stage and in partnership with our state societies. At the policy meeting, we heard from experts in government and health planning who underscored the complexities in our future. There is nothing like a few days in Washington to shake you up.

Our lobbyists work to protect adequate reimbursement for our services, ensure that our role as diagnosticians is secure, pursue an enhanced role for pathologists under coordinated care, and monitor regulatory activity. Ours is a sophisticated advocacy operation.

I was thinking about that on my return trip home, and about how our advocacy supports the transformation initiative by influencing public policy and government health care initiatives. That’s critical, because public policy will undoubtedly shape the system. But there are many balls in the air, and government advocacy is only one of them.

Free market realities can drive change in ways beyond the purview of planners and regulators. Managing economic and market pressures can be delicate, dynamic, and critically local. In this context, “local” is not at a state or region level; it’s at the level of your individual practice. How we respond at that local level will determine the survival of our ­specialty.

Pathologists and staff working with the CAP Transformation Program Office have been dissecting, analyzing, and projecting the economic environment for pathology in a coordinated care world. A few of their preliminary discoveries are listed here. Taken as a whole, they constitute an urgent call to action.

  • Other specialists continue to in-source pathology specimens. Over the past five years, according to Laboratory Economics, the number of in-house pathology laboratories in urology practices has doubled and the number in gastroenterology practices has tripled.

  • Patient care services are shifting from hospitals to outpatient settings. In the 12 years ending 2007, the proportional value of Part B services provided in hospitals dropped 15 percent while the proportional value provided in outpatient settings rose 14 percent.

  • Pathologists are able to guide efforts to control costs in the “other” 97 percent of the health care market. An analysis that combined U.S. Census data with findings published by Washington G-2 Reports showed that although laboratory revenues grew about 20 percent between 2005 and 2008, they still represent less than three percent of health care expenditures. While we might be tempted to boast about what pathologists and laboratory professionals accomplish with just three percent, we are better advised to focus on how we can help those responsible for the other 97 percent control their costs.

  • The market is consolidating. Consolidation of hospitals, laboratories, and physician practices is a recurring theme in the business press. The capital and personnel requirements associated with emerging esoteric tests, along with continuing shortages of laboratory professionals, will continue to drive consolidation.

  • We ignore molecular diagnostics at our own peril. New and evolving molecular tests are the fastest growing segment of the laboratory industry. According to Washington G-2 Reports, molecular tests grew from about 14 percent of lab revenues in 2006 to roughly 21 percent in 2009. Pathologists must learn new technologies or be replaced by physician extenders.

  • We need to focus on high-efficiency methods now, not later. Right now, 42 percent of pathologists are age 55 or older, and another 33 percent are between the ages of 45 and 54. A pathology workforce shortage will begin in 2014, when the number of newly board-certified pathologists will no longer keep pace with the number of retirements. Preliminary research suggests that we will face a deficit of more than 1,000 pathologists by 2018. At a time when the number of newly board-certified pathologists is not expected to keep pace with retirements, health care reform will introduce as many as 35 million newly insured patients to the system. In the next 10 years, the number of U.S. residents per pathologist is projected to increase by 4,000. If the need for anatomic pathology services grows as expected, we could see a doubling in demand within the next five to seven years. Payment will not double.

  • To secure our place in the evolving landscape, we must become aggressive intellectual and economic capitalists. Our creative ability to perceive patterns and recognize what they portend is a critical survival skill in a competitive marketplace. Not everyone knows that yet. Individually, and independently, we must leverage our financial and intellectual capital and make that plain. There is no better way to demonstrate what we can do than to do it, over and over again. Pathologists should be volunteering on planning committees, conducting grand rounds in molecular diagnostics, and hosting tumor boards that demonstrate the power of emerging technologies and the need for a physician’s knowledge and experience to fully appreciate what they reveal. We need to consider new economic models and invest in our practices.

    CAP advocacy is necessary, but advocacy alone is not enough. We must work to shape health care policy, but that will not shield us from market forces. There is no prescription here for how we should respond. We must individually and collectively take responsibility for responding to these market forces based on our local needs.

    Every 10 seconds, a baby boomer turns 65 and becomes eligible for Medicare. There is a critical need for individuals who have the intellectual firepower, medical knowledge, and creative inclinations to negotiate the fragile nexus where accelerated demand for health care intersects with declining revenues.

    We’ve been relegated to the basement too long. There are 50 ways to leave the basement. Pick three. And ask your partners to do the same.

  • Dr. Bauer welcomes communication from CAP members. Write to him at president@cap.org.
    * With apologies to Paul Simon, musician and lyricist.