State of the Industry 2011: Medicare/Medicaid Providers

Aging baby boomers will bring more people into Medicare, while reform will expand Medicaid, says Marty Hauser, president of SummaCare in Akron, Ohio, and an MHE editorial advisor. However, physicians remain concerned about payment.

"In most parts of the country, Medicare represents a significant portion of the payer mix," Hauser says.

Also, commercial payers are likely to parallel Medicare reimbursement.

Due to these changes, many markets will see increasing consolidation of physicians into large group practices, as well as some physicians choosing to become employees of hospitals or health systems. As providers move toward accountable care organizations, physician's offices will need improved operating efficiencies to make up for fee-for-service losses.

"It's very expensive to run a physician's office," he says. "At current payment levels-let alone potentially reduced reimbursement levels-it will be more difficult for individual physicians to meet the levels of technological and reporting sophistication that everyone is going to require."

These changes will lead to increased diversity in health plan offerings. The variations in payment between Medicare/Medicaid and commercial payers are going to shrink significantly, Hauser predicts.