During several recent conversations with clients, many concerns have been raised regarding the transition of medical practice models. Some of these include a change from small community based physician office groups to regional multi-specialty practice models. Alan Harrel, a very experienced regional professional liability defense attorney from Texarkana, illustrated some of the fast approaching criteria during an October Q & A session. “First, the new model for healthcare is the Accountable Care Organization (ACO).  You do not have to read any further than the Proposed Rule Implementing the Medicare Share Savings Program required to be established by Section 3022 of the Patient Protection and Affordable Care Act. CMS seeks to establish the guidelines for the creation of these vertically integrated healthcare entities to provide medical services from primary care to acute care in a hospital setting. Second this model coupled with the requirement for electronic healthcare information systems will drive the solo and small group practices out of business unless they are part of an integrated ACO entity. The cost for compliance will be high and failure to comply will result in significant financial downside as Medicare efficiencies cannot be proved and gained by these smaller, independent elements of healthcare.”

Alan went on to explain that an ACO will only operate in a rural setting where the financial incentives are appropriate. “We currently see more of the healthcare facility that is staffed by nurse practitioners or physician assistants with a physician “present” by an electronic link.” He stressed that the likelihood of a physician being on-site at rural venues will decrease for obvious reasons. Through necessity, he or she will be at a hospital-based or multi-specialty clinic-based facility supervising the local healthcare mid-level provider. The impact on routine or urgent care may not be of significance, but what of the impact on emergent care? Look around Arkansas and see the number of closed emergency departments. If they are not closed they are farther and farther apart with difficult staffing and doctor/patient ratios. To top it off, a much more seriously ill patient presents.

When asking about changes in “standard of care” that may be required to reflect on the future healthcare environment, Mr. Harrel went on to say, “While templates for standards of care are contemplated in the discussions over the future healthcare environment, the notion of national standards that we have come to deal with over the past decades and what may be offered in the future may actually have to be modified to accommodate the variances in rural healthcare.” In Texarkana there are three judicial venues, Arkansas, Texas and United States Federal Court; the sense of contemplating the “locality” issue is strong. The medical demographic picture covers a population of more than 425,000, four states and a shrinking number of both facilities and practitioners. At any given point in the history, the community has boasted to having as many as four general admission hospitals. We are now down to two general admission facilities and three specialty institutions. The number of physician practices continues to shrink every day. While we have served the Four States region as a center for more state of the art medical availability, challenges continue to erode this level of specialty as well as the standard of care.

Looking ahead, the United States Supreme Court has agreed to review 2 premises of the the United States Healthcare Act. Obviously the impact of these decisions will affect many aspects of future growth and medical services provided along with how they are funded. In the interim, we stand on the sidelines with many observers.

Beth Sparks has been a partner with Offenhauser & Co. insurance since 1993. She attended the University of Arkansas and purchased her first insurance agency in 1978 in Hazen, Ark. Beth specializes in complex casualty accounts including medical liability ranging from adolescent rehabilitation facilities to both large clinic and hospital exposures. She developed one of the first fronting programs of risk transfer for non-metropolitan clinics in Texas. Beth has a particular knowledge of Arkansas, as a native of the Hazen/Stuttgart farming area. She can be reached at bsparks@fwoins.com.

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