The Medical Society of New Jersey and its members are battling on several fronts against pressures in the industry that make New Jersey one of the worst in the country for doctors.Between a physician shortage, taxes, high litigation rates and taking part in a court case with the state’s largest insurer — MSNJ’s president, Larry Downs, has his hands full.
Many industry insiders have complimented Downs on turning around a struggling organization, but Downs said there is still work to be done.
NJBIZ: How can you battle the physician shortage when there are so many factors pushing young physicians away from the state?
Larry Downs: We have been supporting incentives to keep people here. New Jersey has the highest cost of business — whether you are an auto repair shop or a physician — rents are higher, but there is also higher compensation compared to other states. Because young physicians who are looking for a place to practice have significant debt, after financing their education, retiring that debt is first and foremost on their mind. So a market with lower costs is attractive. The second issue is New Jersey has a longer wait time for initial licensure. Texas for example has less than two months wait time, but New Jersey is much longer than that. Third is we have a reputation for being a litigious state, which means more doctors get sued, that is a strike against us. California or Texas for example have placed significant caps on economic damage liability.
NJBIZ: What about the taxes?
LD: The legislature previously added a tax for physicians to pay the same tax than an ambulatory center pays. We are working with legislature to repeal the ambulatory care facility tax. The tax was used to fund charity care, but we don’t have the same burden of charity care as when tax was passed. There are now many more individuals on Medicaid and more people are insured. The tax discourages physicians from investing in their practices.
NJBIZ: Isn’t the trend moving toward large practices, specialty groups or working in hospitals, anyway?
LD: Hospitals have been acquiring physician practices, but we are also seeing alignment of private practices into larger specialty groups. We are starting to see physicians forming private physician-led groups that carry promise of driving down health care costs. They are hospital agnostic, and are able to shop among hospitals to reduce pricing. We are starting to see those kinds of things and it’s important for younger physicians to be employed by those kind of groups without higher overhead. There is a move toward consolidation, but recent studies show care in smaller practices is more efficient than larger organizations. I think there is going to be a role for small community based practices. I don’t think it’s the end of independent practices, I just think it’s going to be those that need to maintain their practice are going to need to be innovative about it.
NJBIZ: How can they survive?
LD: Look at the market. There are things about physicians’ practices that don’t change, like caring about tools and alternative payment models that benefit the patient. Physicians joining together is going to be a key to driving down the cost. This organization is going to be exercising leadership going forward to bring physicians to the table to ensure health care reform doesn’t leave patients behind, especially patients in a poverty situation.
NJBIZ: There are many who have said the organization is much stronger now than it was before. What changed?
LD: The society is the oldest professional association in the country of any kind and the oldest medical society. For 240 of those 250 years (in existence), we were an individual doctor’s medical society. Now large groups joined and we are able to help those physician-led practices compete in pay reform.
NJBIZ: You also recently took a position in the ongoing lawsuit against Horizon Blue Cross Blue Shield’s new OMNIA Health Plan. Why did you file the amicus brief?
LD: It’s pretty simple. Our physicians adopted a policy in 2008 or 2009 regarding transparency with how physicians are ranked or tiered. Back then, UnitedHealthcare had this premium designation which put a gold star near physician’s names. It was kind of the earliest attempt of trying to segregate a panel of physicians. It was not clear at all what criteria was used by United to give out that gold star. The American Medical Association developed a policy about criteria for what should be available to patients. Physicians have a keen interest in whoever ranks them on meaningful criteria, from bona fide sources, not just an internal black box. Our interest in this case is the same. We are not against tiered networks.
NJBIZ: If you had to pick just one thing, what’s the biggest issue facing physicians today in N.J.?
LD: How do we make sure that we maintain the human element that’s within the physician-patient relationship? And at the same time leverage technology, like telemedicine, in an appropriate way. We have to make sure we don’t lose the connection.